Fundsupermart sells insurance with 50% commission rebate

[Sinkie]

STI also has a return of less than 5% over the past 20 years and a negative return for the past 6 years so using 8% return is really stretching. We are no longer in the 1990s where every year our GDP is growing double digits.

And no investment cost? And we all know investment has its up and down. First year going up by 5-10% and first year down by 5-10% has a significant different in future value.

Aya, using sti is always a benchmark lah

You see last few days, everyday sti closes green, and just move higher, but broad market has been dying at low volume. This market has been brought up by either the 3 jardines, or the banks nia or else the telco/defensive stocks but not necessary a true reflection of stock investment.

The furthest you can make use of sti is as an benchmark only and assuming that investment in stocks is restricted to investing in the index etf only.

If I am to invest in an etf? I might as well buy ILP or WL? But when I am or anyone is referring to stock investment, we refer to buying stocks like olam, tee, yoma or even digiland lah

 

[hwmook]

STI also has a return of less than 5% over the past 20 years and a negative return for the past 6 years so using 8% return is really stretching. We are no longer in the 1990s where every year our GDP is growing double digits.

And no investment cost? And we all know investment has its up and down. First year going up by 5-10% and first year down by 5-10% has a significant different in future value.

Obviously you don't know the stock market well enough. STI ETF is 13.62% annualized returns over last 10 years, 4.39% annualized over 5 years. you don't pick a specific time frame to make your point when you buy insurance its not over 6 years but over decades like 20-30 years.

SSgA: SPDR Straits Times Index ETF

BTW, STI is a relative high dividend paying index thus you need to factor in dividend also. STI after adjusting for dividend already broke 2007 highs so to say returns from STI is negative for past 6 years is far from the truth. Moreover insurance premiums are paid annually so its like dollar averaging strategy thus you should have bought in at the market lows also and make over 100% profit on some parts of the money. I dare to say 4% yield is easily achieved by investing in STI. In a normal economy, 7-8% yield PA should be normal.

Pick up a economy textbook and read, seriously.

 

[Majestic12]

I'm amused no one has factored in the worldwide devaluation of currencies into their fantasy stock returns.

 

[hwmook]

I'm amused no one has factored in the worldwide devaluation of currencies into their fantasy stock returns.

I am amused that STI is priced in foreign currency nowadays and not SGD. Or we should probably be amused that we are paying foreign currency for insurance in singapore nowadays? Compare apple to apple and not orange, dude.

 

[Majestic12]

I am amused that STI is priced in foreign currency nowadays and not SGD. Or we should probably be amused that we are paying foreign currency for insurance in singapore nowadays? Compare apple to apple and not orange, dude.

It's not about valid comparisons. Look beyond mere returns and examine how they relate to the big picture.

As a starter, for value investing these days, investors are not being adequately compensated for the risk they take and everything is mispriced.

 

[Sinkie]

It's not about valid comparisons. Look beyond mere returns and examine how they relate to the big picture.

You mean the recent market return due to QE right? QE plays a part in recent index etf performance too

 

[bleeze]

It's not about valid comparisons. Look beyond mere returns and examine how they relate to the big picture.

As a starter, for value investing these days, investors are not being adequately compensated for the risk they take and everything is mispriced.

Whatever affects stock returns affects insurance cash payouts too. If the big picture relation is not within the scope of this discussion, that deserves a separate thread topic altogether.

 

[derazor]

click on FSM link seems it's 404 already

 

[laalaaland]

click on FSM link seems it's 404 already

Bro, FSM pull the plug on this liao... due to "people complain". In today's ST...

 

[Asure7]

Just a quick thought:

With all the qualifications and the resources they possess, if most fund managers underperform the benchmark (ignoring fees), what makes many individuals think they can consistently beat the benchmark?

 

[Mecisteus]

Just a quick thought:

With all the qualifications and the resources they possess, if most fund managers underperform the benchmark (ignoring fees), what makes many individuals think they can consistently beat the benchmark?

if you cannot beat them, then you join them. buy index funds.

i bet many fund managers of life funds have significant exposure to index funds under their equity allocation to stay on the safe side.

 

[Asure7]

if you cannot beat them, then you join them. buy index funds.

i bet many fund managers of life funds have significant exposure to index funds under their equity allocation to stay on the safe side.

That's the point I was trying to make.
Many seem to be claiming the benchmark performance is pathetic, and how "easy" it is to achieve 10% or more by themselves through stock-picking.
Well, easy when the market is good. But the risk is also significantly higher. When market bad......

 

[derazor]

Bro, FSM pull the plug on this liao... due to "people complain". In today's ST...

Complain about what? Lol

 

[Saj.Mahal]

hmm.... I created a table that factored in time value, with 5.25%, 6% and 8%. 8% still sounds reasonable because equity suits an investment of 40 years, and STI has a total return of 12.7% for the past 10 years.

I like what you're doing here. Would you be willing to perhaps come out with 3 columns that show a Average / Best / Worst case investment scenario? That may give us a better comparison as we're bound to see some negative years.

Leave it to you to determine how such scenarios should be calculated of course. STI ETF annual returns instead of averaged out cumulative returns?

Bonus if you can take different starting points in the STI ETF. If not enough data points, just recycle from start point or play some creative number games haha.

 

[SpinFire]

There's an article on this issue in today's ST forum page. Lets see what's the response to it.

 

[Mecisteus]

I like what you're doing here. Would you be willing to perhaps come out with 3 columns that show a Average / Best / Worst case investment scenario? That may give us a better comparison as we're bound to see some negative years.

why isnt there projected returns for a worse case scenario under the BI of all insurance/investment policies? isnt it possible for policyholders to receive less than the projected benefits?

those projected returns are not simply plucked from the sky. they are statistics taken from long term studies and past performances. so 5 to 7% pa returns from equities are not unrealistic assuming they are implemented correctly.

 

[iAdvisor]

Well, you mentioned you received a pm and in your opinion it seems legit and attractive but it's too good to be true that you are seeking a second opinion

Not sure which part of my post makes you have that perception. Sorry about it. I did no say it seems legit or even attractive.

Anyway, thanks for highlighting this. In case others thought so as well. So NO, Imo, i do not think its a good deal. Thats why I mentioned, I'm been challenged to take it up.

 

[iAdvisor]

why isnt there projected returns for a worse case scenario under the BI of all insurance/investment policies? isnt it possible for policyholders to receive less than the projected benefits?

those projected returns are not simply plucked from the sky. they are statistics taken from long term studies and past performances. so 5 to 7% pa returns from equities are not unrealistic assuming they are implemented correctly.

Yes indeed, I agree with you on the 1st paragraph.

Firstly, those projection are not plucked from sky, but from MAS, LIA, etc. it used to be 3.75, 5.25%, and soon, all will be revise lower. These are controlled not what insurer like to put out. I've seen some old AIA endowment projection at 6+%. That's ridiculous.

But I agree with you that they should have a column that is low enough like 1% (0 is abit erm.., really not possible for long term products. Insurer can't be cutting bonus every year...). So that agent can't FOCUS on the MAX projection, and ignore the fact that the guaranteed return is freaking low. Most endowment products out there in the market now, has very low guaranteed value, only a handful of them have higher than premium paid guaranteed value.

 

[iAdvisor]

I think the threads are moving into other topic.

Somehow, investors and agents/FAs/IFAs here start to make many comparison. If I'm the starter, truely apologize. My first comparison table, is only to prove that WL isn't as bad as it is even comparing it with a term plan.

But really, no one (i hope) is stating that buying insurance (specifically WL) is better than investing. On the other-hand, what agents/FAs/IFAs are defending is investing is not necessary much better than buying insurance.

Like I always said, its the purpose. I advise client who looks at returns on WL, not to buy WL. The returns sucks. Its non-guaranteed and lock up for long term. Since non-guaranteed, might as well buy UT, ETF, or else even Endowment products, these are relatively low risk tools.

Buying insurance is for the coverage, that protects from death/TPD or CI. Its the consideration of length of coverage, determine if you should get a term or WL product.

And back to the topic, someone mentioned that Aviva and NTUC are allowing to buy directly from the insurer. These is only restricted to the group insurance cat. Aviva - SAF plan. NTUC - LUV plan. both are term plans. Both are increasing premium term, and coverage till age 70 max (for Aviva)

Firstly, just for inform others, Group insurance is different from what FSM is offering.

And since FSM is taking out this service for now, nothing much can be done. I also do not suppose something similar will surface again publicly.

 

[cybercom8]

so was FSM banned from selling these products since they undercut the market prices (presumably after other sellers complained?)? if yes, is this allowed under singapore's competition law for such "price fixing"?