A financial adviser told me that he sells regular premium unit trust with a front end load of 3%. There is no no additional charge that takes away 6 to 18 months of the savings (unlike a regular premuim investment-linked plan from a life insurance company).
If the monthly saving is $100, the charge is only $3. The adviser earns a commission of only $3.
Due to the low commission, he is not able to spend time to visit the client. He speaks to them over the telephone and sends the form by mail. He receives the completed form by mail.
He advises his client to invest their Central Provident Fund savings, from the ordinary and special account, into unit trust.
It is advisable to invest in a unit trust, if the annual expense ratio is less than 1.5%. It is better, if the fund has an expense ratio of 1% or less.
Dr Money has some low cost funds listed in his href="http://www.askdrmoney.com/Unit_Trusts_and_Funds.htm">website. I shall ask him to cover some of the low cost unit trust.
When you buy a ILP, ask about the additional charge. Alternatively, you can ask if 100% of the regular premium is "allocated" for investment. If the allocation is less than 100%, the difference is the additional charge (which may be deducted over many years).
Subscribe to:
Post Comments (Atom)
:.
0 comments:
Post a Comment