Switching into the Wealth Accumulator plan

Dear Mr. Tan,
I am interested in your Wealth Accumulator plan, which is to be introduced later this year. I am now invested in the Combined Fund of NTUC. Should I switch to this new plan?

REPLY
The expense ratio of the low cost funds that can be purchased under the Wealth Accumulator plan is likely to be 0.3% lower than the Combined Fund. There is a small advantage in making this switch, but it is a recurring annual saving.

For new investments, the Wealth Accumulator plan has no front end charge (except for a small transaction fee). New investments into the Combined Fund attract a front end charge of 3% (invested through Flexi-Link) or 18.5% for the first three years and 3.5% for subsequent years (invested through the Ideal plan).

It is better to switch to the Wealth Accumulator plan, if you expect to make new investments. There is no penalty on withdrawal from the Combined Fund.

A similar advantage applies to switching form the ILP funds of other insurance companies.

Note: The Wealth Accumulator plan is not available at this time. Please wait for it to be available and details to be confirmed, before you make your decision.