Lesson learned - Just to share

[kyteo79]

I do weakly remember this product when they advertised it.

Sound good at that point of time.

I dun expect to be rich based on amount i put in but cannot even drink kopi

 

[Auspicium Melioris Aevi]

Just to share my experience.

My mom was enticed to buy a structure deposit from DBS Bank called Bonus Account.
It promised 20+% over 5 yrs, everything guaranteed. It was attractive in a low interest rate scenario.
The based product was the German stock market.
She bought in Jan and when the 1st quarter statement arrived, she couldnt fathom how come it lost 10% of its value.
I checked and found the DAX30 index had risen over 6% over that period and the EUR/SGD rate also appreciated 3% at the same time. That means the value of the SD should be technically have risen about 10% but instead, the value of the "investment" had fallen by the same magnitude.

I called up the bank for an explanation. Neither the sales gal nor the branch manager could explain. To cut a long story short, this matter went up all the way to the head of corporate sales, treasury & PR dept when I launched a complaint to ABS and cc to the MOF 9 mths later. No one in DBS could give an explanation why their SD was still in the negative while EUR & their stocks were burgeoning.

They returned my mum the money intact at the end. Wasted my time to deal with useless sales people & the lies they tell.

NB - My experience with ABS is sorely disappointing. They are not a fair mediator but rally in defence of DBS Bank. I should have expected that because ABS was funded primarily by the local banks which means the salaries of the ABS staff was paid in part by DBS. We got lucky because my complaint went up to MOF & I expect they are watching the outcome.

Warren Buffet said - Dont buy anything you do not understand.
(Actually - "Never invest in a business you cannot understand.”)
Dont trust the banks entirely.
Dont trust businesses that make similar wild promises too

 

[Asphodeli]

Just to share my experience.

My mom was enticed to buy a structure deposit from DBS Bank called Bonus Account.
It promised 20+% over 5 yrs, everything guaranteed. It was attractive in a low interest rate scenario.
The based product was the German stock market.
She bought in Jan and when the 1st quarter statement arrived, she couldnt fathom how come it lost 10% of its value.
I checked and found the DAX30 index had risen over 6% over that period and the EUR/SGD rate also appreciated 3% at the same time. That means the value of the SD should be technically have risen about 10% but instead, the value of the "investment" had fallen by the same magnitude.

I called up the bank for an explanation. Neither the sales gal nor the branch manager could explain. To cut a long story short, this matter went up all the way to the head of corporate sales, treasury & PR dept when I launched a complaint to ABS and cc to the MOF 9 mths later. No one in DBS could give an explanation why their SD was still in the negative while EUR & their stocks were burgeoning.

They returned my mum the money intact at the end. Wasted my time to deal with useless sales people & the lies they tell.

NB - My experience with ABS is sorely disappointing. They are not a fair mediator but rally in defence of DBS Bank. I should have expected that because ABS was funded primarily by the local banks which means the salaries of the ABS staff was paid in part by DBS. We got lucky because my complaint went up to MOF & I expect they are watching the outcome.

Warren Buffet said - Dont buy anything you do not understand.
(Actually - "Never invest in a business you cannot understand.”)
Dont trust the banks entirely.
Dont trust businesses that make similar wild promises too

Looks like it's an interest-rate linked structured deposit? Otherwise it could be a credit-linked one.

Yes, structured deposit is really shady; you can't even find basic information on it, such as underlying securities, terms and conditions, etc. Just avoid them totally and hit the stock exchange.

 

[focus1974]

Don't understand why so many people still believe in structured products when we have been telling everyone not to dabble in it.

 

[Shiny Things]

Just to share my experience.

My mom was enticed to buy a structure deposit from DBS Bank called Bonus Account.
It promised 20+% over 5 yrs, everything guaranteed. It was attractive in a low interest rate scenario.
The based product was the German stock market.
She bought in Jan and when the 1st quarter statement arrived, she couldnt fathom how come it lost 10% of its value.
I checked and found the DAX30 index had risen over 6% over that period and the EUR/SGD rate also appreciated 3% at the same time. That means the value of the SD should be technically have risen about 10% but instead, the value of the "investment" had fallen by the same magnitude.

Without the termsheet, there's only so much I can tell you, but there are three things to keep in mind:

1) The structure might not have been what you thought it was. I couldn't find any record of a DAX-linked "Bonus Account" structure from DBS, but I found a similar-looking one (the "Invest-4-Future Account", linked here) that's more like a "worst-of-four" structure, and only pays out if none out of four reference indices lose more than 5% from their starting price; one of those indices is the Eurostoxx. Is it possible that's what this was?

2) These structures don't have any exposure to currencies - you only have exposure to the actual level of the index. You're not buying a DAX ETF or anything like that, which would give you currency exposure - what you've got is a weird option that references the level of the DAX but is denominated in SGD.

3) They probably ripped a ton of money out of you in hidden fees. What typically happens with these structured notes is that the customer buys them at 100 cents on the dollar, but the product's only worth 95 or 96 cents after fees are accounted for. (Might not sound like much, but if you print $10mio notional of this thing that's $400,000 in profit to share around between The Nice Lady At The Bank, the structuring desk, and the equity exotics traders who will probably spend it all down on Club Street.)

Usually, banks will show these trades as being worth 100 on the first customer statement, and then they'll nudge it down over the next 6-12 months until the statement reflects the 95-96 price that these trades are actually worth. Probably someone at the bank decided to mark the trades down right away, rather than sneakily moving the price down over a year or so.

 

[shareholder]

Don't understand why so many people still believe in structured products when we have been telling everyone not to dabble in it.

It is in most Singaporeans to be trusting of authority. In sg the banks have the reputation of high integrity, in addition to ignorance and brainwashing of the media about inflation. That's why many lay people fall for these products. Even some rich people prefers to leave millions in saving account than invest in the bank's products, that says a lot.

 

[klarklar]

Your principal will still be protected if you wait till maturity. Not to worry. Still better than stock market last year.

5 years ago - open 2 structured deposits which is linked to Singapore top 5 performers. Yesterday got a mailer from OCBC which the average returns from these companies is -24.x% (yes minus / negative 24 percent) which back then was marketed as up to 4-7% possible bonus interest returns ?

so basically 5 years my money wasting their time there ...

I reckon will expect same from OUB this year dec 2016 (which is a 6 years structure deposit.

No buying of these stupid products in future for me. Lucky principal money not burnt but to me money can get better returns with other products...

Lesson learnt.


1 Guaranteed interest will be paid yearly for each year of the tenor, except for the last year, only if the structured deposit has not been withdrawn.
2 The bonus interest will depend on the performance of the underlying basket and the participation rate and could accordingly be zero.
3 The 100% principal guarantee is applicable only upon maturity of the structured deposit in its denominated currency. If the structured deposit is withdrawn before maturity date, the redemption amount may be less than the principal amount.

 

[focus1974]

Just to share my experience.

My mom was enticed to buy a structure deposit from DBS Bank called Bonus Account.
It promised 20+% over 5 yrs, everything guaranteed. It was attractive in a low interest rate scenario.
The based product was the German stock market.
She bought in Jan and when the 1st quarter statement arrived, she couldnt fathom how come it lost 10% of its value.
I checked and found the DAX30 index had risen over 6% over that period and the EUR/SGD rate also appreciated 3% at the same time. That means the value of the SD should be technically have risen about 10% but instead, the value of the "investment" had fallen by the same magnitude.

I called up the bank for an explanation. Neither the sales gal nor the branch manager could explain. To cut a long story short, this matter went up all the way to the head of corporate sales, treasury & PR dept when I launched a complaint to ABS and cc to the MOF 9 mths later. No one in DBS could give an explanation why their SD was still in the negative while EUR & their stocks were burgeoning.

They returned my mum the money intact at the end. Wasted my time to deal with useless sales people & the lies they tell.

NB - My experience with ABS is sorely disappointing. They are not a fair mediator but rally in defence of DBS Bank. I should have expected that because ABS was funded primarily by the local banks which means the salaries of the ABS staff was paid in part by DBS. We got lucky because my complaint went up to MOF & I expect they are watching the outcome.

Warren Buffet said - Dont buy anything you do not understand.
(Actually - "Never invest in a business you cannot understand.”)
Dont trust the banks entirely.
Dont trust businesses that make similar wild promises too

You want independent ...
you need to overhaul the existing government.
if not.. just do your own due diligence and dont wait for the govt/authorities to help you.

 

[eboy]

Structured deposit how it works is example

90% of your capital is invested in bonds
10% in equities or some other investments

The bonds + interest = your capital if you hold to maturity
Your returns over the period will be based on the remaining 10% invested in equities which is capped artificially by the bank and which they will take the first cut of any profits made

Actually any one can DIY an SD and enjoy the potentially unlimited gains of the remaining 10% investment. The banks are promoting this to unsavvy folks who want their capital guaranteed and yet chance to potentially enjoy investment returns

Correct me if I am wrong

 

[w1rbelw1nd]

So they are cheating ?

Thats why now insurance companies are suggest to prove guaranteed returns and not projected returns ?

Haha learn from PAP please, they got their hands burned "investing" in Structured Deposits of Lehman Minibonds, as discerning voters and learning retail investors we need to learn from the mistakes of our government

 

[kyteo79]

Just to share my experience.

My mom was enticed to buy a structure deposit from DBS Bank called Bonus Account.
It promised 20+% over 5 yrs, everything guaranteed. It was attractive in a low interest rate scenario.
The based product was the German stock market.
She bought in Jan and when the 1st quarter statement arrived, she couldnt fathom how come it lost 10% of its value.
I checked and found the DAX30 index had risen over 6% over that period and the EUR/SGD rate also appreciated 3% at the same time. That means the value of the SD should be technically have risen about 10% but instead, the value of the "investment" had fallen by the same magnitude.

I called up the bank for an explanation. Neither the sales gal nor the branch manager could explain. To cut a long story short, this matter went up all the way to the head of corporate sales, treasury & PR dept when I launched a complaint to ABS and cc to the MOF 9 mths later. No one in DBS could give an explanation why their SD was still in the negative while EUR & their stocks were burgeoning.

They returned my mum the money intact at the end. Wasted my time to deal with useless sales people & the lies they tell.

NB - My experience with ABS is sorely disappointing. They are not a fair mediator but rally in defence of DBS Bank. I should have expected that because ABS was funded primarily by the local banks which means the salaries of the ABS staff was paid in part by DBS. We got lucky because my complaint went up to MOF & I expect they are watching the outcome.

Warren Buffet said - Dont buy anything you do not understand.
(Actually - "Never invest in a business you cannot understand.”)
Dont trust the banks entirely.
Dont trust businesses that make similar wild promises too

U are a finance guy or knows numbers.

For me i an a noob and just wana get some bread money not asking for richness...

 

[kyteo79]

Don't understand why so many people still believe in structured products when we have been telling everyone not to dabble in it.

I just join this big family here so 5 years back i dunno even how to surf forum ..

pai seh pai seh ... give chance and tips leh ...

 

[kyteo79]

Your principal will still be protected if you wait till maturity. Not to worry. Still better than stock market last year.

I mean i could invest in my brother eatery business and get more in returns ...

Nevertheless it is just a KPKB for me ... lesson learn not to waste time on these in future.

 

[focus1974]

I just join this big family here so 5 years back i dunno even how to surf forum ..

pai seh pai seh ... give chance and tips leh ...

haha.. My fault for sounding mean..

 

[Laneige]

Err so let's say u invest 10,000 n now negative but 100% protected means protect 10,000? Or 10,000 - yearly management fund charges X number of yrs when matured?

 

[Shiny Things]

Err so let's say u invest 10,000 n now negative but 100% protected means protect 10,000? Or 10,000 - yearly management fund charges X number of yrs when matured?

Structured notes don't usually have fund management charges - they rip enough out of you going in that they don't need to.

Usually, if there's a principal protection clause in a structured note, it'll be like "100% principal protected", which means at maturity you're guaranteed to get at least 100% of your original investment back; or "98% principal protected" (ditto but you're guaranteed at least 98% of your original investment); or "102% principal protected" (ditto but you're guaranteed at least 102%, but don't get too excited, you might have to wait five years to get that 2%).

 

[kyteo79]

haha.. My fault for sounding mean..

No big deal boss ...

I dun take words too harsh online since there might be typos or something which you dun mean..

Pls guide more lobangs.. wahaha..

 

[kyteo79]

Structured notes don't usually have fund management charges - they rip enough out of you going in that they don't need to.

Usually, if there's a principal protection clause in a structured note, it'll be like "100% principal protected", which means at maturity you're guaranteed to get at least 100% of your original investment back; or "98% principal protected" (ditto but you're guaranteed at least 98% of your original investment); or "102% principal protected" (ditto but you're guaranteed at least 102%, but don't get too excited, you might have to wait five years to get that 2%).

101 per semi year for 1st 4 years except last year (5th) they give u zero .. yes a big egg ...

then throw it back into your saving deposit and laughs at you for queueing 1 hour to withdraw ...

++

let see how UOB will perform 2016 Nov/Dec but suspect say vampire tactics ..

money put pocket better ...

 

[Auspicium Melioris Aevi]

Don't understand why so many people still believe in structured products when we have been telling everyone not to dabble in it.

Same, we have been warning members here about Scammers and yet so many people get sucked dry by these vampires.

Few years ago there are v little info abt these scammers but more pple have come out to denounce these demons.

Like I always said -

.. just do your own due diligence and dont wait for the govt/authorities to help you.

 

[Auspicium Melioris Aevi]

You want independent ...
you need to overhaul the existing government.
if not.. just do your own due diligence and dont wait for the govt/authorities to help you.

Better do your Due diligence. Once yr money is out of your hands, it may very well be gone.
Even the Pritam Singh cannot do anything if you are scammed -
As it goes, it turned out to be so with Mr Pritam Singh informing me at his MPS that CAD had informed his office they will be closing this case with no further updates, accountability or transparency throughout the process.

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