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feedbacks about HSBC "growth manager" product

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feedbacks about HSBC "growth manager" product

Postby geebers1301 » Fri, 31 Jul 2015 2:41 pm

Hi,

I am quite new in this forum eventhough I have been living in Singapore for more than 3 years now as an expat.

In particular, I wanted to have some feedbacks regarding a particular product that I subscribed to through HSBC which is called HSBC growth manager (If any person in this forum subscribed to the same product) and which is, I am sure offered (or has been offered) in the past to the singaporean expat people

Actually, the product is far from delivering a correct return because of the bid/offer charges embedded in the product (currently 5%) on top of the normal fees disclosed in the product . Which means that for every regular premium paid 5% is taken out when buying unit of the funds.

Of course this is not something that the bank emphasized on one we first subscribe to the product and it turns out to drive the return negatively (even when the market is doing well like in 2014).

I would like to see if anybody came accross the same conclusions and whether I can do something about it (cancel the policy).

I feel that there is a lack of explanation to the customer about this very important aspect of the product and obviously would make our decision different on whether to subscribe to it or not if we were better informed

Thanks in advance for any advice or experience shared

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Re: feedbacks about HSBC "growth manager" product

Postby JR8 » Fri, 31 Jul 2015 3:26 pm

geebers1301 wrote:...Of course this is not something that the bank emphasized on one we first subscribe to the product and it turns out to drive the return negatively (even when the market is doing well like in 2014).

I would like to see if anybody came accross the same conclusions and whether I can do something about it (cancel the policy).

I feel that there is a lack of explanation to the customer about this very important aspect of the product and obviously would make our decision different on whether to subscribe to it or not if we were better informed


Hi geebers, and welcome to the forum.

This is not so easy to give an opinion on, since I don't imagine any of us have the precise product description and small-print in front of us.

Typically, of course, a bank will provide you full disclosure of a products terms and conditions prior to you buying it. In fact in this day and age they require you to sign-off to confirm that you have read all of these disclosures. You need to consider whether that took place. One of the few avenues open to you is that you bought a product you didn't understand and/or that was woefully inappropriate for you. But the days of buying products that came with suggestions of riches, and then the customer crying foul when the riches didn't arrive as promised, and then getting compensation were probably a thing that finally died out 10-20 years ago.

Any case you might have would seem to hinge on lack of product disclosure. Proving that in this day and age - esp vs a reputable bank like HSBC - is going to be an uphill struggle IMO.
'Do it or do not do it: You will regret both' - Kierkegaard

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Re: feedbacks about HSBC "growth manager" product

Postby geebers1301 » Fri, 31 Jul 2015 4:38 pm

Hi JR8,

Thanks for your quick feedbacks.
I think that mistakes in terms of investment can happen. I just feel like in this product the returns needed to offset the fees is way to high and the bank which provides this product should disclose all the fees which Has not been the case because some of the fees are in the product features and other in the fund prospectus.
The bid offer is the biggest fee and this is not mentioned and voluntary omitted
(All the fees are not mentioned at the same level which make it difficult to have a precise view on what you will pay in the end.)
Is 5% of bid offer something usual in Singapore ?

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Re: feedbacks about HSBC "growth manager" product

Postby JR8 » Fri, 31 Jul 2015 5:05 pm

Can you provide a link to the prospectus for the product?

Without an understanding of what the product is, it's hard to know what is being discussed.
'Do it or do not do it: You will regret both' - Kierkegaard

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Re: feedbacks about HSBC "growth manager" product

Postby geebers1301 » Fri, 31 Jul 2015 5:14 pm

I looked at the firstcompare website to download the prospectus but it seems that the product The product has been removed :-)
Few weeks ago it was it was still there.
I probably can find it and post it later
How about my question on the bid offer ? Any information ? Is it a usual fees in the insurance investmentmlinked products ?

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Re: feedbacks about HSBC "growth manager" product

Postby JR8 » Fri, 31 Jul 2015 5:38 pm

I could suggest several things but it's likely of little relevance to the product being discussed, since the latter remains unclear.

For example: Is the product exchange-traded as an 'investment trust' would be in the UK? It sounds unlike it from what you've said; it sounds more like a UK 'unit trust', which you typically buy and sell versus the fund manager (and not over the open market/exchange).

If it's like a unit trust then you can only buy and sell versus the issuer, and they set the price and the buy-sell spread. This is disclosed in the prospectus. And I expect that it's also disclosed that this buy/sell spread can vary.

If you buy managed products (and I think yours comes under this heading) you have to read the full details, purchase costs + any ongoing annual fees + plus exit fees. Issuers are pretty good at tucking away fees in the small-print in jurisdictions where they can still get away with it. Unless you can prove that there was no disclosure of the possible exit spreads, what's your case?

But again, the product details are needed, as this is all still hypothetical...

p.s. You hold a product with which you have concerns; but don't have a copy of the prospectus? To establish if your grievance has any legitimacy at all, you know what task #1 is eh? ...
'Do it or do not do it: You will regret both' - Kierkegaard

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Re: feedbacks about HSBC "growth manager" product

Postby Strong Eagle » Fri, 31 Jul 2015 10:44 pm

Which bank was it that got taken to court over selling CDS'es without fully disclosing they were about to tank?

Looks like HSBC has changed programs. https://www.hsbc.com.sg/1/PA_ES_Content ... anager.pdf

Maybe you can get them to switch you. http://www.hsbc.com.sg/1/2/personal/ins ... th-manager

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Re: feedbacks about HSBC "growth manager" product

Postby JR8 » Fri, 31 Jul 2015 11:08 pm

How would anyone 'know' what the market is going to do tomorrow?

[Ok, ok, so where's the Dow going to close tonight? ;;]
'Do it or do not do it: You will regret both' - Kierkegaard

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Re: feedbacks about HSBC "growth manager" product

Postby geebers1301 » Fri, 31 Jul 2015 11:56 pm

It is just surprising how they market the new product :

"Simple and transparent solution to increase your returns
No more multiple charges like policy fees, supplementary charges, bid-offer spread, cost of insurance, etc.
"

Sounds like they are learning from their mistakes :-)

@JR8 : still chasing my relationship manager to get the product prospectus in pdf and will post it as soon as I have it.
Regarding the bid offer what shocks me is the magnitude of it not the principles.

Have a good we !

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Re: feedbacks about HSBC "growth manager" product

Postby JR8 » Sat, 01 Aug 2015 12:08 am

What would you consider a 'reasonable' spread, given only the issuer makes a market in it?

-- Why not come to the light side, forget managed products, and buy bare stocks. Or is that too scary? ; [I haven't bought a managed product in c20 years... your experience and grievance is in part why. That said, back then I accepted every shekel of what I was getting into.... and hence, lesson well learned.]
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Re: feedbacks about HSBC "growth manager" product

Postby Strong Eagle » Sat, 01 Aug 2015 12:54 am

Or, if not bare stocks, then ETF's tracking a variety of indexes.

I, too, learned the hard way about managed products. In my case it was getting into structured notes that tracked the S&P 500, via an annuity. The theory was that in exchange for an upside cap my downside risk would be limited. But, the risk elimination was simply too costly in terms of loss of potential gain, and I realized that if I could hold onto investments through the down periods, I'd be OK anyway.

The other thing I tried and discarded was to get into alternative investments in a diversified way... metals, arbitrage, private placements, etc. A good idea except that the fees on fees just killed performance. If I could find an ETF like alternate investment I'd put some dough into it.

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Re: feedbacks about HSBC "growth manager" product

Postby geebers1301 » Wed, 19 Aug 2015 9:24 pm

Coming back to this topic I just noticed that the same fund is offered in the old and new products of hsbc.
In the old product the bid offer of the fund is 5%
In the new product 0%
If the purpose of the bid offer is to cover some transaction within the fund, I don't understand why the charging is different between the 2 products ???

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Re: feedbacks about HSBC "growth manager" product

Postby ginger_bread » Wed, 19 Aug 2015 10:41 pm

I don't know anything about this particular product, but normally the subscription fees (or initial sales charge) for unit trusts are listed as 5% maximum, though normally banks or third-parties charge much less to attract customers. I normally paid 1% or less. These types of unit trusts do not have a bid-offer spread. You buy and sell at the NAV (net asset value).

HSBC-managed unit trusts do not charge subscription fees, but instead they quote a bid-offer spread which is exactly 5%. In a way this replaces the subscription fees. I was told by HSBC staff that you could negotiate the bank offer price so that the spread would be, say, 1% or whatever you could get. The bid price is non-negotiable.

Seems like this product you mentioned is just like a regular savings product whereby the savings are used to buy unit trusts, and they always charge you 5% subscription fees (or for HSBC-managed products the full bid-offer spread). They allow you to switch in and out of different unit trusts without further charging you, right? If you buy a specific unit trust (not the product you mentioned) from HSBC, they will charge you the subscription fees again if you do a switch. They sell this free switching as an advantage, but I use other players in the market that do not charge for switching.

Why don't you read the documents you have signed, and see if you can stop paying in? You can keep whatever you have bought with them, and find another place to invest your future savings. Also read the documents to see if you can transfer the unit trusts to another bank/agent and what the charges are. For simple unit trust subscription I know you can transfer out with a small fee.

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Re: feedbacks about HSBC "growth manager" product

Postby geebers1301 » Thu, 20 Aug 2015 10:43 am

The surrender penalty is too high (during the frst 7 years of the products a big part of the capital can be lost) and it is not possible to stop paying the regular premiums (Only premium holidays which can be seen as a pause in the payment but it doesn t mean that you can exit the product).

There is a policy fees charged for each regular premium

My understanding of the bid offer was that it was meant to be used for the management of the fund but not for sales purpose. Are you saying that the bid offer is used as a commission for the sales.

I read the product brochure and the wording of the of the bid offer it is not mentionned that it is used for sales purpose ...

Anyway, HSBC insurance staff is very incompetent on al these issues and I feel that they don t even know there products (that is why I am posting here to have a better understanding )

Thanks in advance

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Re: feedbacks about HSBC "growth manager" product

Postby Strong Eagle » Thu, 20 Aug 2015 11:55 am

^^^^^^
I think you got screwed... if it were I, I'd be looking into legal options to dissolve this onerous contract.


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