hi help needed

[Mecisteus]

5% pa is for the fund managers to achieve. But you are getting a meagre $894 profit.

An annual payment of $1,200 for 10 years and $12,894 on maturity means YOU only made 1.3% pa.

 

[hygge island]

Can complain and start a case with FIDREC?
Anyone has experience with FIDREC? are they any good?

 

[lzydata]

5% pa is for the fund managers to achieve. But you are getting a meagre $894 profit.

An annual payment of $1,200 for 10 years and $12,894 on maturity means YOU only made 1.3% pa.

Actual return was $254.47 not even $894

 

[bibu00]

Can complain and start a case with FIDREC?
Anyone has experience with FIDREC? are they any good?

What's there to complain about. They stated black and white the deductions and they are quite accurate with the illustrations.
The illustration is accurate already considered very good. They are not obliged to return you what is illustrated. Even if your funds perform 2% and you make a loss after deduction you cannot blame the insurer.

 

[dork32]

the problem with this sort of plan is that the first two installments are used fund the company and agent. you will lose 100% of it.

then you hope that the remaining 8 years, your funds can earn enough to cover the losses. at 5% gain, you dont know have to wait how long before you can cover 100% loss.

 

[akwl88]

Lol i know what this plan is for. Lining the agent's pocket with your mum's hard earned cash.

Call the agent/banker and settle ba.

 

[durianseeds]

http://finance.yahoo.com/q/pm?s=F0HKG070IQ.SI+Performance
100% of the invested money was into a bond fund, I hope you were not you expecting stellar returns from it?

Perhaps if your mom had someone actively managing her portfolio, things would have been different. Then again, I'm not sure if the staff who sold that policy would do that. To save both of you future heart pain, when it comes to Investments, best is to educate yourselves so you know how to manage expectations. Then find a trusted (or credible) manager if you can't invest on your own.

Things could certainly have been better, but it could have been worse too. At least she has a small pot of money now which she could have otherwise spent.

And no, it is unlikely you will be able to pursue an effective recourse.

some background info ,My mum recently received the premium for "money smart(rp)-ladies". and she is not very financial literate. It is the kind of plan (according to her) , pay 100$ every month for 10years (which is now) , which means she gave 12000$.
now upon maturing, what she earned was just $254.47?
any advises on where to raise the issue with or there is no hope. i would provide any information that may help to clear the pic, just tell me what to show LOL

 

[akwl88]

Put into fd better rates?

 

[R2R_AIA]

You will not have much case for this.. Its all written black and white. Investment returns are not guaranteed also.

At the end.. If the actual investment really did generate a 5% return.. You will not get back 5% because there is going to be other deductions by the insurer.

I guess since it has matured, lesson learnt. Be more aware from now on and since you said she is not financial savvy, probably take this as really a force saving.

My parents bought quite a few saving plans as such and its only when i came into the picture that i discovered. Too late though.

 

[hogrider88]

looking it at another perspective, another group of non-financial literate wld hv punt their savings into penny stock, and the $12000 may become $3-4k instead. like other bros here said, quite lucky to get back the 12k liao. it is only opportunity cost (for higher returns) she kenna.

and speaking of higher returns, how many % of the ppl u know around u knw hw to ownself invest for returns?

 

[oceanicmanta]

how the illustration was presented is not totally correct (even if it is just an illustration) & wonder if Bank explained it clearly ... how can 1.2k a year for 10 years @ 5% projection get only 12,894 ? It's wrong to not explain that 5% projection of $12.9k is after deducting $3k fees & to show it that way.

agree, little room for recourse but still a worthy real life example that can be shared to raise awareness
not many are comfortable sharing losses publicly

thanks for sharing

 

[bibu00]

Isn't the cost and deduction already stated there big big for you to see?

 

[dork32]

Isn't the cost and deduction already stated there big big for you to see?

you are right that it is stated but it is not big big. But there are so many numbers stated as well. it is lost in the midst of so many other rubbish. so which are the important numbers to look for? for a layman like me, i will be very confused.

 

[Darkzi0n]

you are right that it is stated but it is not big big. But there are so many numbers stated as well. it is lost in the midst of so many other rubbish. so which are the important numbers to look for? for a layman like me, i will be very confused.

U sldnt be looking at most of the numbers from the illustration to begin with. Those numbers are for ppl who have little or no education to get a sense of how returns work. They are not indicative or even a proxy of the actual return. Insurer don't even set it based on historical performance.the illustrated returns are set by MAS if I'm not wrong.

In fact the cost of deduction is probably the only useful info there.

 

[IronMac]

My wife is curious as to whether or not some sort of insurance was also given for the TS' mother? Because this is from Aviva which is an insurance company and I have found online a brochure which says that this plan covers the insured for death, terminal illness and disability.

 

[xdemolicx]

What is the cost of deduction? The insurance charges?? Actually i dont really understand how that deduction part can be used

Isn't the cost and deduction already stated there big big for you to see?

 

[Mecisteus]

Actual return was $254.47 not even $894

yeah so actual return is way lesser than 1.3% pa.

 

[R2R_AIA]

Using TS example.

An actual 5% return for the policy can be calculated by adding the effect of deduction value to the 5% surrender value. So in total $16410.

The fund manager will strive to get the fund to perform. However, whatever end value it is, you will need to take into consideration the effect of deduction and subtract accordingly. In this case, $12894 is only effectively giving you a 1.3% return instead of 5%

Well for the matter, the higher interest from the various banks is only introduced recent years, so 10 years ago, the agent is probably right in a way that its better than putting it inside the bank. It served its purpose of force saving for TS mum though since she is not financial savvy, and in addition, death benefit during the earlier years (premium $1200 covered for $6000), but i will leave it at this.

 

[henrylbh]

some background info ,My mum recently received the premium for "money smart(rp)-ladies". and she is not very financial literate. It is the kind of plan (according to her) , pay 100$ every month for 10years (which is now) , which means she gave 12000$.
now upon maturing, what she earned was just $254.47?
any advises on where to raise the issue with or there is no hope. i would provide any information that may help to clear the pic, just tell me what to show LOL

If she truly got back only $12,254.47 at the end of 10 years, then must be truly disappointed with the insurer or the agent selling it. Never trust benefit illustration. I have yet to come across one that at least meet min stated in the illustration.

 

[Mecisteus]

Using TS example.

An actual 5% return for the policy can be calculated by adding the effect of deduction value to the 5% surrender value. So in total $16410.

The fund manager will strive to get the fund to perform. However, whatever end value it is, you will need to take into consideration the effect of deduction and subtract accordingly. In this case, $12894 is only effectively giving you a 1.3% return instead of 5%

Well for the matter, the higher interest from the various banks is only introduced recent years, so 10 years ago, the agent is probably right in a way that its better than putting it inside the bank. It served its purpose of force saving for TS mum though since she is not financial savvy, and in addition, death benefit during the earlier years (premium $1200 covered for $6000), but i will leave it at this.

moral of the story is you don't save or invest with insurance companies. you are better off keeping the money in banks. guaranteed lower interest rates and you have the flexibility to utilise the cash anytime.