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Friends Provident Global Wealth Advance - case 2
05 Apr 2017 (67 views)

Dear Mr. Tan 
I have a similar pIan (to the Friend Provident Global Advance plan) and a similar experience. I have since cancelled the plan, incurring a tremendous loss of 5 figures. I told myself it was better to bite the bullet and invest elsewhere.

I do believe I was mis-led into this plan when I didn't know any better, by my ex-financial advisor from an independent firm. I believe this was because of the massive commission structure up front. Easily 60% of my first year premiums.

He has eroded my hard earned money as a financial advisor, and I have terminated him as my advsior. I know my signature is on the plan, which makes it hard to seek justice, but I wish to see what avenue I can pursue to seek justice.

I hope you can continue to gather momentum on this, banding people who have been exposed to a similar plan like this, and seek a solution to us. Such financial advisers blinded by greed are not who we need in the industry.


HI Mr. Tan,

From my point of view, this is essentially unit trusts with lock in and high charges.

I attach my BI here. I can't recall how you calculate the effect of deduction (the exact specification), but can you tell me the figures for my plan?

My concern is not the effect of deductions. My concern is the fact that the agent did not sell the plan in accordance with my needs, and that this is a plan that essential does not benefit the client.

As a client, I would be concerned with being able to grow my money, but the agent fees should be reasonable and acceptable. This plan doesn't achieve either. If my agent can grow my money, he deserves a cut. But in this plan, the commission is upfront.

As a matter of fact, I very clearly recall telling him I would like something where I could put a capital amount and it would give a monthly payout. There are many unit trusts like that, or even stocks that pay dividends.
He said it was better to grow my capital and change it over to dividend based stocks/UT later when I had a larger capital.

I agree with that statement of course. But not the plan he proposed.

If you look at the surrender value at the 4% column, there is essentially no return. I'd be better off rolling FDs at 1%. Let's not even look at the 8% column. 8% returns for 25 years on a UT is not very likely in this new economy.

Furthermore, the charges are ridiculously high, and smartly phrased. 1.5% on initial units per quarter. That's 6% fees a year! And there are other fees as well.

Sir, with all due respect, I think there are many other people out there with such a plan. I'm sure you agree that investments should be kept separate from insurance. But this plan is a very clever masquerade and there are people out there who are suffering.

Hope to hear from you soon.

REVIEW BY TAN KIN LIAN
Unlike the earlier BI (benefit illustration) from the earlier case, the BI for this case is horrible. 

The Effect of Deduction at the end of 25 years is 40% ($151,327 / $382.884) of the accumulated premium at the 4% projection and 44% (%304,282 / $686,130) at the 8% projection. 

The policyholder could have invested in unit trust or the STI ETF and suffer a deduction of less than 10% of the accumulated premium and keep a larger sum for himself.

I do not understand why two BI for a similar product from the same company could show vastly different EODs. I also do not understand why the EOD should be so high.

The policyholder has the option to sue the financial adviser for breach of duty under section 7.2 and 7.3 of the Financial Adviser Act. Clearly the financial adviser had failed to carry out his duty under the act to take into account "alternative investment option" and to "explain clearly the basis of his recommendation.

Read here for the relevant points of the Act

If there are other policyholders who have bought this plan, send an email to kinlian@gmail.com. I will get the policyholders together to take collective action.


 


Friends Provident Global Wealth Advance - case 2
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Dear Mr. Tan 
I have a similar pIan (to the Friend Provident Global Advance plan) and a similar experience. I have since cancelled the plan, incurring a tremendous loss of 5 figures. I told myself it was better to bite the bullet and invest elsewhere.

I do believe I was mis-led into this plan when I didn't know any better, by my ex-financial advisor from an independent firm. I believe this was because of the massive commission structure up front. Easily 60% of my first year premiums.

He has eroded my hard earned money as a financial advisor, and I have terminated him as my advsior. I know my signature is on the plan, which makes it hard to seek justice, but I wish to see what avenue I can pursue to seek justice.

I hope you can continue to gather momentum on this, banding people who have been exposed to a similar plan like this, and seek a solution to us. Such financial advisers blinded by greed are not who we need in the industry.


HI Mr. Tan,

From my point of view, this is essentially unit trusts with lock in and high charges.

I attach my BI here. I can't recall how you calculate the effect of deduction (the exact specification), but can you tell me the figures for my plan?

My concern is not the effect of deductions. My concern is the fact that the agent did not sell the plan in accordance with my needs, and that this is a plan that essential does not benefit the client.

As a client, I would be concerned with being able to grow my money, but the agent fees should be reasonable and acceptable. This plan doesn't achieve either. If my agent can grow my money, he deserves a cut. But in this plan, the commission is upfront.

As a matter of fact, I very clearly recall telling him I would like something where I could put a capital amount and it would give a monthly payout. There are many unit trusts like that, or even stocks that pay dividends.
He said it was better to grow my capital and change it over to dividend based stocks/UT later when I had a larger capital.

I agree with that statement of course. But not the plan he proposed.

If you look at the surrender value at the 4% column, there is essentially no return. I'd be better off rolling FDs at 1%. Let's not even look at the 8% column. 8% returns for 25 years on a UT is not very likely in this new economy.

Furthermore, the charges are ridiculously high, and smartly phrased. 1.5% on initial units per quarter. That's 6% fees a year! And there are other fees as well.

Sir, with all due respect, I think there are many other people out there with such a plan. I'm sure you agree that investments should be kept separate from insurance. But this plan is a very clever masquerade and there are people out there who are suffering.

Hope to hear from you soon.

REVIEW BY TAN KIN LIAN
Unlike the earlier BI (benefit illustration) from the earlier case, the BI for this case is horrible. 

The Effect of Deduction at the end of 25 years is 40% ($151,327 / $382.884) of the accumulated premium at the 4% projection and 44% (%304,282 / $686,130) at the 8% projection. 

The policyholder could have invested in unit trust or the STI ETF and suffer a deduction of less than 10% of the accumulated premium and keep a larger sum for himself.

I do not understand why two BI for a similar product from the same company could show vastly different EODs. I also do not understand why the EOD should be so high.

The policyholder has the option to sue the financial adviser for breach of duty under section 7.2 and 7.3 of the Financial Adviser Act. Clearly the financial adviser had failed to carry out his duty under the act to take into account "alternative investment option" and to "explain clearly the basis of his recommendation.

Read here for the relevant points of the Act

If there are other policyholders who have bought this plan, send an email to kinlian@gmail.com. I will get the policyholders together to take collective action.