Recently I saw a presentation which showed that nearly 50% of the fund investments in Singapore is through Investment-Linked policies. Therefore, the ILPs market is very huge. We can say it is selling like hot cakes. But I say that people who buy these ILPs are holding a hot-potato.

As a fee-based financial planner, I have to do the asset allocation for my clients. Quite often, the amount of ILPs my clients hold represent nearly 99% of their liquid assets. Thus, I find it quite an irony that although I have never sold a single regular premium investment linked policies, I do find myself providing on-going advice for them on it. Typically the ILPs must be held for 25 years otherwise the surrender charges will be very high. It would not be ethical for me to tell them to terminate. Thus, I have to help them do the asset allocation. …