By: Adrian Khiat I encountered a cases of an agent and a case of a bank Relationship Managers who had planned for 2 old folks this week. I really don't know if they are cases of misunderstandings or being misled. 1st Case - 5% guaranteed Returns??? One of my client called me last Friday and asked if I am able to offer a plan that gives over 5% guaranteed returns. I told her that only her CPF minimum sum is able to give such guaranteed returns. She insisted that her sister had purchased a plan that gives 5% guaranteed returns and claims that her sister is very investment savvy and won't be wrong about it. I told her to call back and asked her sister on the inital outlay and the returns shown in the benefit illustration. She called back and told me $50,000 and around $75,300 after 10 years. Her sister still insisted that this returns is guaranteed. My client told me that if I don't offer it, she will buy from that agent. I didn't argue much and I used a very soft and firm voice to answer her, " Madam XXX, Trust me, check it out first. Give me a chance to go through that plan with you if you really want to get it from that agent" +++++++++++++ So whats wrong with this figure? * The agent had used simple interest to calculate this yield. 5% surely sounds more attractive. * Secondly she did not highlight to the old lady about the non-guaranteed portion of the plan. The actual returns is 4.18%. * There is actually nothing wrong with this plan but I really have no idea how the old lady can get misled. Does the problem lies with the lady or the agent? Your guess... 2nd Case - Deposit money become buying an Endowment Plan Read more...

My comments: Adrian's article brought a lot of comments, some of whom have pretty harsh words and has to be moderated. To me there's no right or wrong. As long as the RM/agent does his job in explaining the pros and cons, it's up to the client to make the call.