feedbacks about HSBC "growth manager" product

[geebers1301]

Hi Strong eagle

I think too. I am learning the hard way. To nbe fair the surrender penalty is something clearly mentionned, the bid offer are clearly not
Looking at all the fees since inception, they represent 70% of the total fees
I agree i should look at legal option

[ginger_bread]

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

So you bought an investment-linked insurance product. I suppose the insurance component does not come for free, and somehow the bank needs to charge you an insurance premium. Maybe that's where most of the 5% bid/offer spread goes (a small part of it may be admin charges for managing the product). If you are lucky and have chosen the right unit trusts, in good years you could still make a positive return, but I suppose to always earn a 5%+ return is not easy.

I suppose the insurance features are complicated and it is not possible for us to figure out if 5% fees are too much or not.

[geebers1301]

Yes it is an investment linked product but the insurance fees are outside the fund (1.5 % annually)
The same fund for the next generation of product doesn t have any b/o
My guess is that the b/o is actually used to pay sales commission

[JR8]

The B/O spread is to scalp people who have bought a term product, and later decide they want to bail out of it early. similar to many fees imposed for breaking a contract early. HSBC might be the only operation that have a market in (to buy-in) this product, so they can set the Px/spread where ever they like.

The salesman is being paid from your contributions. His fees are 'loaded' on the front-end years. So if you wish to cash in your plan after 1-2-3 years you will find you're going to get less back than you expect.

But I expect you read the smallprint of the product offering, and so already knew all of this...

[geebers1301]

RDR reform in the UK and change in regulations in Hong kong have been implemented exactly to avoid this
I am wondering whether such regulation on the disclosure of the commissions exist in singapore ?
If you go see your RM he will tell you the fund is underperforming ...

[JR8]

I used to sell shovels for a living. Now I go and buy my own modest little stakes in the mines directly.

[i.e. I don't buy funds or any other managed products. Most promises that come with products are worth toot. Whether it's managed investments or off-plan apartments under the London Heathrow flight path. But your difficulty is that the issuer is going to have the T&Cs listed out over and over, and you will certainly have signed a disclaimer, or even several, that you have read them and fully understand them. And yet you are still asking for help to understand what you have bought - as if we random people know better than you. So you can't touch them, as the disconnect appears to be that you were unaware of the T&C.

Unless of course you have been outright defrauded. But that's not the case is it?

[geebers1301]

Yes and that is why i share my experience for other not to do the same mistake

[Strong Eagle]

Yes and that is why i share my experience for other not to do the same mistake

There are a lot of slick talking buggers out there. To be more charitable, the people that sell and recommend these types of investments believe them to be good things. It's partly because their income depends upon it. It's partly because that is what they have been taught. And it's partly because they don't have sufficient knowledge to separate the wheat from the chaff.

Find the best way out to minimize losses and do it. Although you've not published the details of this investment, I cannot see it being much of a money maker... upfront loads seriously kill returns.

Good luck.

[BBCWatcher]

For future reference, it's best not to try to combine life insurance with investment/savings. It's quite difficult to understand the hybrid that you're buying, and that's really why the financial company likes the idea. Another problem is that your disability, life insurance, and savings/investing needs are likely to vary separately over time. As a simple example, if you get a divorce, do you still need to protect your ex-spouse's financial well being when you die? (Maybe not.) As another example, if you have a child, might you want to adjust your life insurance and disability coverages, and might you want to have somewhat different saving objectives (for education, in particular)?

So, if you can at least halt further damage, that'd be great. Then take a look at simple term life insurance, straightforward disability insurance, and low cost index-based investments, separately. (Note that you only need life insurance if you are trying to protect the lifestyle(s) of your survivor(s), and if they would need the financial help.) In the last category, there are a couple SGX-traded index funds like symbols I17 and ES3 that are, by Singapore standards anyway, low cost -- much, much lower than 5%, including trading fees. "Shop around."