Archive for May, 2010
Comparisons of ILP Insurance Charges
Thought of putting this comparison up on the website. This is still valid 1H2010. These tables show the insurance charges for Investment Linked Policies of different companies as they are printed with every benefit illustration. The insurance charges forms the major part of the cost to the policy holder, others includes administration fees, fund switching fees and so on.
There is really a difference in cost. It is not convenient to place it on the website. Contact me if you wish to know more.
Neglected Investment Accounts
I have been particularly interested in taking over neglected accounts. There are a few reasons for this. From the client’s perspective, it is quite difficult to get good advise and service. Additionally, taking over neglected accounts means additional value to the client at no cost to them.
Bank customers buy thousands of dollars of investment products from Personal Bankers (who may or may not be well-versed in investments. They are trained on a sales pitch and try too get the sale). Customers are charged 5% upfront fees. However, once fees are collected, expect no advise. It is not the bank’s nor the banker’s responsibility to monitor the investments or advise customers. There is no procedures set up for that and personal bankers’ job scope is getting new sales. Basically, customers will hear nothing except receiving a thick prospectus every year. They will however hear from the bankers again when they call to ask for more investments or to ‘advise’you to sell your current funds and buy into a new one, thereby incurring another 5% fees.
Customers of advisory/insurance firms pay annual advisory and service fee of between 0.8% to 1.25% of portfolio value. However, in many cases the clients do not get any advise or updates promised and still paying for. Some customers have not heard from the agent/adviser in years!
A Greece default?
You will have heard me mention the Greek sovereign debt problem before. In February, this issue has been weighing down the markets somewhat pending a response from European Central Bank. Last Thursday, a serious contagion forced ECB to response seriously with a huge EUR750 billion safety net to arrest the fiscal crisis and stop the turmoil from spreading to the other 15 nations that use the euro.
Bank of America – Europe Bailout
Markets have been really volatile last 2 weeks due to this issue, other issues like China’s property prices and inflation do not help in calming the market. Main story goes, after the drop last week, traders and investors gave positive response and the markets for fixed income, equity and Euro rebounded on Monday, a day after hard fought European lifeline.
Alternatives to a Savings Account
Recently, I arranged for a client to put his cash to an instrument that earns higher interest rate than the bank’s savings account. If there is a alternative that has the characteristics of to the savings account and earns more than the savings account, a lot of people will be interested if it fits their requirements. This is because the interest rates of saving accounts are very low!
The alternatives is the Cash Fund or a short-term SGD money market fund. You can get them from iFast platform through your Independent Financial Adviser. If you do not need any advise or further information, you can get it from www.fundsupermart.com.
