Pulsar start up bonus 174%

[Shiny Things]

Hi RuiRui,

Oh boy. Look, you're a salesperson. You're paid to sell your product, and you get phat commissions for selling your product. But you're selling a bad product.

Look, let's go through your post and explain why your ILP is worse than just buying the unit trusts.

No doubt, l am an agent.But, l am also an investor, a client, a very ordinary person. Actually, l am just like anyone here. l hope there is no bias against me.

The reason for me to start this thread is not to advertise product, just to have a different view from insurer, agent, investor, public, etc.. have some discussion over here.

Don't be disingenous. Yes it is. It's all about advertising.

It mean one invest in $3000, one will get $5220 bonus which give a total capital $8220 to invest into fund. In order to get 174%, one need to invest over 30 years. However, we can not say it is lock in period as it provide liquidity. Erm...l don't want to emphasize in this part now.

Yes it is. "You have to invest for 30 years to get the 174% bonus" is exactly the definition of a lockup. That's a fairly large bonus, but you're basically betting that the client will break the policy before the 30-year mark. Isn't that a bit cynical?

So, in fact AXA pulsar is just like unit trust.

This is sort of true. AXA Pulsar is a wrapper around a portfolio of unit trusts. The catch is that AXA Pulsar charges horrendously high fees compared to FSM or Dollardex or whatever. Those fees are ridiculously high, and they don't make up for all of the differences. Let's do this.

1) Bonus
Pulsar have start up bonus whereas unit trust no. This can help in compounding effect.

Pulsar's startup bonus locks you in for ten years or twenty years or thirty years or whatever.

3) Sales charge
There is no sales charges for Pulsar
whereas unit trust charge up to 5%. However, do note that pulsar has other charges
a)4% for 18 month money invested

So that "first eighteen months" money will be pretty much entirely eaten up after thirty years. That makes up for the "174% bonus" right there.

b)1.5% of account value

WHOA THAT IS A LOT OF MONEY, DON'T JUST BURY THIS IN POINT B. 1.5% per annum is hedge-fund money. Over thirty years, that's the equivalent of giving away 37% of your final returns to AXA. Giving away 37% of your money is a bad idea, right?

(the 0.5% l did not include as it will be refunded in the end)

And you forgot about the management fees on the funds; those eat into your returns as well. Stack your AXA Pulsar up against some ETFs and it starts to look really terrible.

6) Liquidity
Both provide liquidity.
Pulsar can withdraw any amount after 18 months,

That's not "liquidity". An 18-month lockup is not liquid.

After all, when one wants buy into pulsar, unit trust, shares, future or forex, any investment tools, one may still need to do the homework.

This sort of false equivalence - saying "oh pulsar is just like any other investment, you have to do your homework" - really drives me up the wall, because it's trying to paint ILPs as being exactly the same as any other investment product. They're not: they're worse.

And comparing them to unit trusts is a bit of a dodge, because unit trusts are only slightly better than an ILP wrapping those unit trusts. Low-cost ETFs blow ILPs and unit trusts out of the water. Let's have a look.

Here's what happens when you buy an ILP:

* Your first 18 months of investment will all disappear in fees.
* You pay 1.5% a year in fees
* You pay $120 a year in fees on top of that
* You're limited to the universe of high-cost funds that Axa picks; you can't go to a lower-cost fund provider if, say, Vanguard opens up in Singapore.
* You're locked up tight for eighteen months, and then partially locked up for thirty years.

Or you can just open an account with Stanchart, buy some low-cost ETFs, and:
* You pay 0.2% in brokerage fees and that's it.
* You pay 0.2-ish% a year in management fees and that's it.
* You don't pay any fixed annual fees.
* If you want to switch to a new lower-cost fund, you can, and nobody will stop you.
* There's absolutely no lockup ever.

This is why I bang the drum for sensible low-cost investment. The fees on that ILP will take away nearly half of your final returns after thirty years, no matter what they say about "ooh look at this big upfront bonus".

There's no other way to put it: ETFs will make you richer. ILPs will make you poorer.

 

[Shiny Things]

If I am interested to invest in the S&P500 index, what is the most cost effective way of investing since the US imposes a 30% withholding taxes on dividends?

Yep, Perisher got it before I did - VUSD, listed on the LSE. It's the same as the US-listed S&P 500 ETFs, with the benefit of slightly better tax treatment.

 

[neolaw]

If I am interested to invest in the S&P500 index, what is the most cost effective way of investing since the US imposes a 30% withholding taxes on dividends?

What I understand is that withholding tax means giving you back the money if you aren't tax payer.

 

[limster]

What I understand is that withholding tax means giving you back the money if you aren't tax payer.

Instead of 'what I understand' why not google the meaning of withholding tax and post the explanation here and the link?

 

[FlameEvil]

I actually thought this is an old thread on this useless product. Surprised one salesman actually started it again. Well done. No amount of water can treat the burn done by Shiny Things

Sent from the power of my mind using GAGT

 

[joshua182]

cut loss, close thread and unregister your account la ts..

i know life is hard as insurance salesman.. but it's not easy for most and you have a choice just like everyone else.

 

[wahkao3]

dont worry, as a sales person, you need to represent the right products. Dont represent those lousy products. those products are for con man to sell, not sales man.

if u have low risk, high return products, I am all ears!! pls intro some low risk, high return products.

For example, a corporate bond at 8% backed by AAA credit rating agency
Yummy

 

[Shiny Things]

What I understand is that withholding tax means giving you back the money if you aren't tax payer.

Nope. Withholding tax is tax that's "withheld" from any payments made to you - dividends, interest payments, whatever. It's used as a way to tax payments that wouldn't otherwise be taxable; for example, dividends held by offshore investors.

 

[Starmaster]

For my own opinion, pulsar should compare with unit trust with similar charges.

Instead of comparing pulsar with STI ETF, l think is better to compare it with AXA Fortress Fund A, which is a single ILP. AXA Fortress Fund A invest in companies listed in main board of SGX. Its annual compounded return is 13.44% since launch.

thats like you telling me you dont wanna commit suicide , but I insist that you choose between various type of knives for you to kill yourself


why would people want to compare between various ILP when ILP as a whole cartegories are beaten hands down by passive ETF investing?

However the way you slice it and which year you choose from , ETF annual compounded return will always win any unit trust/ILP with similar components due to the existence of fees and commission

 

[xsilkx]

add in to the "dirty" tactics some agents use. for instance , they are supposed to tell us that we can always cancel the policy within 7 or 14 days (forgot which) and be able to get a 100% refund on the policy, but some of them skip that conveniently , or try to drag the time until 7-14 days is passed before following up with you (i.e passing u the policy booklet, etc)

Correction, free look ONLY starts when you receive the policy.
so when you haven receive it, the free look period has not officially start.

So dont assume. you can always call and ask and launch complains.

Typically most is 14 days free looks. there is some more than 14 days.

 

[xsilkx]

hmmm from my one and only bad exp with Prudential...low protection and high investment, i.e. 2 with single premium.

Held the policy for over 6 years and am still in a net loss of 1.4k excld. all 2pid yearly charges (it has been in the red ever since I signed on the dotted line). If you ask why was I so stupid to not cut loss earlier, i was young that time, no knowledge on investments and was "convinced" by agent that talked like a pro. Come to think of it, he knows NOTHING about investment. Yet he is the one selling to me and I paid a 5-star hotel fees for such level of service. Yucks

Thats what prompted me to learn about investments and I have never look back since.

The sad part is I lose 1.4k(which is to date my worst investment ever, had divested in 2012).

The positive take aways i learnt are..Insurance company should just remain at what it do best..Insurance and nothing else. The second take away is, I think I am more financial savvy compare to myself many years ago.

After learning about investing, I began to learn how insurance companies draft their policies to misled consumers with huge tag lines that target the greed of consumers while minimizing the cost that comes with it.

SCARY

Feel happy for you. At least is good you learnt. than many still don't wan to cut losses =.= even though they know is totally wrong. Or say is because my friends sold me this, so I believe what they said.

Actually, I think a lot of times those "advisers" also never explain properly & people who purchases also don't question properly

It has to work both ways.


So hope for people who is looking at this thread in future, please don't anyhow sign up the plan because of the 174% start up or you are in the hurry like they approach you during their road show.

For Pulsar the free-look is 7 days. but you will not be receiving 100% refund, it will be based on the selling price on the next following day after they submitted your refund request.

So think wisely.

 

[MaoZeDuo]

dont worry, as a sales person, you need to represent the right products. Dont represent those lousy products. those products are for con man to sell, not sales man.

if u have low risk, high return products, I am all ears!! pls intro some low risk, high return products.

For example, a corporate bond at 8% backed by AAA credit rating agency
Yummy

m waiting for the right product to cum

 

[faithl3ss]

5.5% annual fees (deducted monthly) <-- This one I got nothing to say
2% expense ratio of unit trust (Pictet Generics, 2.03% TER)
$120 annual fee <--- can buy term policy for this amount already.

Total charges, 7.5% and $120 a year.

So if stock market does well and grows 10%. My return is less than 2.5%.

If the stock market don't move. I lose 7.5%.

Finally, the start up bonus of 174% is actually a bonus of 5.80% a year and only if you take up a 30 year plan. So to be fair to you, this means that if I agree to give AXA my money for 30 years, they agree to only charge me 1.7% + $120 for the privilege of buying unit trust with expense ratio of 2%.

Let's use your as for an example.
Your calculation is wrong.
Put it very simple, let's use 10% per annual as a policy fees.
Do you know that you are actually only paying less than 5% in monthly(based on you mentioned deducted monthly?)

let us do some calculation here. on a ballpark figure.

10% per annual - policy fees
$12,000 - premium that you put in per year

how much do you pay for the policy fees per month?
$12,000 / 12 = $1000 (what you pay per month)
10% of $1000(per month) = $100
Calculate to % = (100*100)/12000=0.833% (this is what u paying every month for your policy fees.

if you want to reverse from month to year calculation. is another way of calculation.
for example:
$250/month - premium
10% policy fees

$250*10%=$2.50 (policy fees per month)
$250*12= $3000/year (premium per year)
$2.50*12 = $30/years (policy fees you put in per year)
(30*100)/3000 = 1% (what you paid per year)

at the end of the day. check with your adviser if the policy go by frontend load or backend load. and how is the calculation going to be calculated is depending on it.

PS: i am not a insurance agent.