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Should I forfeit $5,000?

Friday, March 27, 2015

Read this and see if you get upset like I did:

I have recently become interested in growing my wealth and financial planning because I have seen how my own parents failed. However, I am only just starting, plus I am terrible with numbers. I am probably only good at capturing the theory, but terrible at application, and may have made some mistakes, which I now need help with. I have no one else to turn to except insurance agents, who I am sure you know are mostly biased towards their own products.


One major mistake I made recently was buying from an XXX agent a pure investment product called PPPPPP. I have put 5k into it. I am not sure if the agent mentioned at the time that this product is a premium payment product, because I was shocked to learn only after everything was done that this is something I have to pay for monthly or yearly. She had put me down for 30yrs, I believe that is because she knows I am looking at long term investment. I was also informed by a third party that unless the funds make more than 6% returns, I would not be able to offset the charges and fees of the product. 

All in all, the impression I got from the agent who sold me the product was that this is similar to something I would get from the stock market, a one time payment, wait for gains, sell if you need to, otherwise hold and allow the gains to roll. I knew there would be fees and charges because this product is from an insurance company, but I did not know I would be unable to surrender any time before 30yrs is up.

My question is whether I ought to give up this product. I talked to the customer service at their headquarters, he told me if I surrendered the product I would simply be forfeiting the 5k, that even though the agent havent given me the policy document, I was past the 14days free look policy. The alternative would be to hold on because the funds are good. 

I had initially agreed to the product because i recognised a lot of the funds eg Blackrock, Schroder, Legg Mason, Pictet. Plus, I thought this product would be a safety net for me, just in case I screwed up my own private investments, because I had believed in the ability of these funds to do better than I could.

I am unable to decide now if surrendering the product would be a rash decision. However, if you are able to tell that this is a bad decision and surrendering the product now will cut future loss, please let me know. I promise I will not sue or come back to you for revenge because the funds turned out to be profitable. I have no one else around me with appropriate financial knowledge who is unbiased towards any companies, and as I think you can tell, I am a green horn greener than grass. 

Any advice or feedback will be greatly appreciated.


Misunderstood? Misrepresented? Negligence?

I have passed this case to a friend who is a professional to follow up. However, feel free to share your opinions in the comments section. I am sure the victim reader will take all the comments (if any) into consideration in deciding what to do next.

Related posts:
1. Know what is good for us.
2. Will I retire happy?
3. "A safety net in case we screw up our investments?"
(It is the CPF.)

The name is Bond, Singapore Savings Bond.

Thursday, March 26, 2015

A new product is going to be available soon for people who are risk averse but are looking for better returns. Enter the Singapore Savings Bond!

Singapore Savings Bonds will offer the higher returns of a long-term bond and give what investors call a term premium, while retaining the flexibility of a shorter-term deposit, and the safety of an instrument guaranteed by the Government. (Senior Minister of State for Finance, Josephine Teo)

Source: CNA

In summary:

1. Interest rates linked to long term Singapore Government Securities.

2. Ability to get back our money at any time without penalty.

3. A "step-up" feature will pay long term savers more interest with each passing year.

4. Guaranteed by the Singapore government.

This could spell trouble for banks here as I foresee savers moving their money from fixed deposits to these Singapore Savings Bonds.

Well, I know I am really looking forward to this. Aren't you?

Related posts: 

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