Posted in my blog
MAS, please stop and disallow financial consultants, whoever or whatever title these salesmen use, from selling and pushing financial products. Mis-selling and misrepresentation and conflict of interest are inevitable in selling.
Please stop them before more people get hurt. Financial products range from insurance, to banking and investment products, except motorcars.
Thursday, October 2, 2008
Hong Kong helping distressed people
Hi Mr. Tan,
I just want to share my thoughts. All the best to you in fighting a good cause for us!!!
http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/379786/1/.html
It is good to see that Hong Kong's financial services chief is stepping out to help distressed people, but what about our own MAS?
If DBS can help people in Hong Kong to settle for reasonable compensation deals, what about helping their own fellow singaporeans?
Much has been said at many forums, I just hope that justice has eyes & also cause and effect happening to the 'masterminds' If their conscience is clear, then they won't have to be afraid.
I just want to share my thoughts. All the best to you in fighting a good cause for us!!!
http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/379786/1/.html
It is good to see that Hong Kong's financial services chief is stepping out to help distressed people, but what about our own MAS?
If DBS can help people in Hong Kong to settle for reasonable compensation deals, what about helping their own fellow singaporeans?
Much has been said at many forums, I just hope that justice has eyes & also cause and effect happening to the 'masterminds' If their conscience is clear, then they won't have to be afraid.
High commission and profits
View posted in my blog
To all the victims.
Have you ever wondered why the RMs or salesmen at the banks or the insurance agents are pushing hard on products?
At the banks product sale means high commission from the products as profit to the company and to pay the RMs' high salary.
What about fixed deposit?
The bank got to pay interest to the customers.
Why push products?
If need analysis is used they may not be able to sell anyhting because the products may not be suitable because of risk, the financial circumstances of the clients, their needs. Products pushing ignores all these perimeters.
At Insurance companies.
Pushing expensive and high commission products means high annual premium income(API) to the company. API is used as production figure for ranking and market share and good profit for the company.
Why insurance agents push products?
No need to look into the needs of the client.If they do they may NOT be able to sell a high commission product. They cannot justify.
Without the need analysis any product can do and normally the product is whole life with high commission.
What does it mean to the agents.
High earning and can qualify for mdrt. cot or tot.
What does it mean to the customers?
Wrong product, insufficient coverage ; allocate too much money in this area at the expense of other needs, ie other needs suffer.
What does it tell us?
Products pushing is bad and shortchanges the customers.
Mis-selling, misrepresentation and conflict of interest and other other unethical practices can arise.
Bad and rotten products need a lot of pushing, right? They need greedy and unscrupulous salespeople to use unethical means
to do for the company with promise of high rewards.
Do you hard push a good product?
The current debacle is due to this.
To MAS
Eradicate selling for financial products. Stop bad products to be sold in the market.
The Concerned Singaporean
To all the victims.
Have you ever wondered why the RMs or salesmen at the banks or the insurance agents are pushing hard on products?
At the banks product sale means high commission from the products as profit to the company and to pay the RMs' high salary.
What about fixed deposit?
The bank got to pay interest to the customers.
Why push products?
If need analysis is used they may not be able to sell anyhting because the products may not be suitable because of risk, the financial circumstances of the clients, their needs. Products pushing ignores all these perimeters.
At Insurance companies.
Pushing expensive and high commission products means high annual premium income(API) to the company. API is used as production figure for ranking and market share and good profit for the company.
Why insurance agents push products?
No need to look into the needs of the client.If they do they may NOT be able to sell a high commission product. They cannot justify.
Without the need analysis any product can do and normally the product is whole life with high commission.
What does it mean to the agents.
High earning and can qualify for mdrt. cot or tot.
What does it mean to the customers?
Wrong product, insufficient coverage ; allocate too much money in this area at the expense of other needs, ie other needs suffer.
What does it tell us?
Products pushing is bad and shortchanges the customers.
Mis-selling, misrepresentation and conflict of interest and other other unethical practices can arise.
Bad and rotten products need a lot of pushing, right? They need greedy and unscrupulous salespeople to use unethical means
to do for the company with promise of high rewards.
Do you hard push a good product?
The current debacle is due to this.
To MAS
Eradicate selling for financial products. Stop bad products to be sold in the market.
The Concerned Singaporean
High risk investments
Dear Mr. Tan,
We the investors can not thank you enough for investing your time and effort in helping us to organise ourselves as nobody else in Singapore would so far.
I am not optimistic that we will achieve anything as we are facing very large financial institutions that have a lot of fire power.
The key to me is in two areas that
1)The sales aid materials and the "misleading prospectus". These are the written evidence. Otherwise the selling process is all verbal between the bank employees and the investors and it is difficult to prove one way or the other.
2) The other is the nature of the products which are extremely high risk now that we are aware of. Even a straight forward product like a local company bond, the retail investor has no access as you need to have S$250,000 as a minimum to invest in. So all other structure products that are available to the retail investors should have a lower risk level that a straight company bond. The financial institutions should not have sold these structured products to the retail investors.
I have read the sales materials and the prospectus before investing and I thought I was investing in the bonds of the referenced entities and the bonds are safely kept by the trustee bank HSBC. Now I know better.
I was prepared to take some risk as I believed that since there are several referenced entities, one failure will only hit the investment proportionately. I never expected that Lehman who is an arranger can wipe off my investment!
REPLY
The financial institution that sold the structured product to you has the responsibility to know the nature of the risk and to advice you appropriately. If they fail in their duty, they should make suitable compensation.
We the investors can not thank you enough for investing your time and effort in helping us to organise ourselves as nobody else in Singapore would so far.
I am not optimistic that we will achieve anything as we are facing very large financial institutions that have a lot of fire power.
The key to me is in two areas that
1)The sales aid materials and the "misleading prospectus". These are the written evidence. Otherwise the selling process is all verbal between the bank employees and the investors and it is difficult to prove one way or the other.
2) The other is the nature of the products which are extremely high risk now that we are aware of. Even a straight forward product like a local company bond, the retail investor has no access as you need to have S$250,000 as a minimum to invest in. So all other structure products that are available to the retail investors should have a lower risk level that a straight company bond. The financial institutions should not have sold these structured products to the retail investors.
I have read the sales materials and the prospectus before investing and I thought I was investing in the bonds of the referenced entities and the bonds are safely kept by the trustee bank HSBC. Now I know better.
I was prepared to take some risk as I believed that since there are several referenced entities, one failure will only hit the investment proportionately. I never expected that Lehman who is an arranger can wipe off my investment!
REPLY
The financial institution that sold the structured product to you has the responsibility to know the nature of the risk and to advice you appropriately. If they fail in their duty, they should make suitable compensation.
Compensation to affected investors
Dear Mr. Tan,
According to the announcement, the MAS can only re-examine regulatory and supervisory roles and regulatory actions include "public reprimand" and "files".
Regulatory action could include fines and public reprimands but cannot include requiring FIs to pay compensation to affected investors.
This is too light a sentence for the FIs. Especially those who make the decisions to sell the products fraudulently and the lawyers who draft the prospectus into meaningless jargon!
Their FI will address their complaint quickly and fairly. Where a customer is still not satisfied, he can have the matter referred to FIDReC, which was specifically set up to handle such issues."
The FIDREC can only handle upto a claim of $50,000. So many of us put into far more than that! This "$50,000" limit must be removed! Also, we need the government to give us a fair legal judgement of this mis-selling saga!
Julie
REPLY
The Petition calls for MAS to make an investigation if there were any wrong doings done by the Financial Institution and to take appropriate action in Court on behalf of the investors. The Court can decide on how the investors are to be compensated.
In a similar case involving the "auction rate securities", the financial institutions decide to buy back the securities from the investors, rather than face the Court decision.
According to the announcement, the MAS can only re-examine regulatory and supervisory roles and regulatory actions include "public reprimand" and "files".
Regulatory action could include fines and public reprimands but cannot include requiring FIs to pay compensation to affected investors.
This is too light a sentence for the FIs. Especially those who make the decisions to sell the products fraudulently and the lawyers who draft the prospectus into meaningless jargon!
Their FI will address their complaint quickly and fairly. Where a customer is still not satisfied, he can have the matter referred to FIDReC, which was specifically set up to handle such issues."
The FIDREC can only handle upto a claim of $50,000. So many of us put into far more than that! This "$50,000" limit must be removed! Also, we need the government to give us a fair legal judgement of this mis-selling saga!
Julie
REPLY
The Petition calls for MAS to make an investigation if there were any wrong doings done by the Financial Institution and to take appropriate action in Court on behalf of the investors. The Court can decide on how the investors are to be compensated.
In a similar case involving the "auction rate securities", the financial institutions decide to buy back the securities from the investors, rather than face the Court decision.
MAS announcements
Hi Mr. Tan,
The MAS has posted two announcements about MAS today. Could you post it in your blog? Hope they are useful for your speech at HONG LIM.
http://www.mas.gov.sg/news_room/press_releases/2008/MAS_Approach_in_Dealing_with_Recent_Developments_Concerning_the_Sale_of_Structured_Products.html
http://www.mas.gov.sg/news_room/press_releases/2008/MAS_and_Financial_Institutions_to_Ensure_Investor_Complaints_are_Dealt_With_Quickly_and_Fairly.html
Regards
Julie
The MAS has posted two announcements about MAS today. Could you post it in your blog? Hope they are useful for your speech at HONG LIM.
http://www.mas.gov.sg/news_room/press_releases/2008/MAS_Approach_in_Dealing_with_Recent_Developments_Concerning_the_Sale_of_Structured_Products.html
http://www.mas.gov.sg/news_room/press_releases/2008/MAS_and_Financial_Institutions_to_Ensure_Investor_Complaints_are_Dealt_With_Quickly_and_Fairly.html
Regards
Julie
For defensive investors
Hi Mr. Tan,
I refer to the letter "High Notes 2 Not a Low-risk product" from Ms Janet Mohan, a V.P. of DBS. This letter was published today (2.10.08) on the forum page of the straits times.
In her letter, Ms Mohan stated that "DBS High Notes 2 (HN2) is a five-year, structured, credit -linked note designed for investor seeking enhanced yield by providing exposure to a basket of highly rated entities....."
She went on to state that "HN2 is not a low-risk product nor principal-protected".
However, according to the Pricing Statement (page 14), High Notes 2 is described as “…5-year structured first-to-default credit linked notes designed for defensive investors seeking enhanced yield by providing exposure to a basket of highly rated regional and international banks……”. The description implies that High Notes 2 is a safe investment for "defensive" investor. The word “defensive” was omitted in Ms Mohan’s letter, probably intentionally.
This shows how the bank is twisting its words to defend itself from alleged misrepresentation.
Kindly post this email in your blog as I wish to share my observation with others who could lose their money in HN2.
Thank you.
Wilson Tan .
I refer to the letter "High Notes 2 Not a Low-risk product" from Ms Janet Mohan, a V.P. of DBS. This letter was published today (2.10.08) on the forum page of the straits times.
In her letter, Ms Mohan stated that "DBS High Notes 2 (HN2) is a five-year, structured, credit -linked note designed for investor seeking enhanced yield by providing exposure to a basket of highly rated entities....."
She went on to state that "HN2 is not a low-risk product nor principal-protected".
However, according to the Pricing Statement (page 14), High Notes 2 is described as “…5-year structured first-to-default credit linked notes designed for defensive investors seeking enhanced yield by providing exposure to a basket of highly rated regional and international banks……”. The description implies that High Notes 2 is a safe investment for "defensive" investor. The word “defensive” was omitted in Ms Mohan’s letter, probably intentionally.
This shows how the bank is twisting its words to defend itself from alleged misrepresentation.
Kindly post this email in your blog as I wish to share my observation with others who could lose their money in HN2.
Thank you.
Wilson Tan .
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