Invest in a unit trust or investment fund?

I was asked, "Is it better to invest regular savings in a unit trust (which does not have an upfront sales charge) compared to an investment-linked plan (where up to 18 months of premium are deducted to pay commission to the agent?"

Here is my reply: "The upfront charge from NTUC Income is about 6 months. This is less than half of the sales charge from similar plans provided by other insurance companies."

The unit trusts have higher annual fee. The fee, including trailer fee to the adviser, can take away between 2% to 3% from your investment yield in each year. This additional charge can be quite costly to you. If you are investing for 10 years or longer, it is better to buy a ILP plan from NTUC Income.