http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=2J6I999CTEE4&preview=magnifier&linkid=fc71a779-d21c-4026-b0c6-af6bdeceec43&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
Hong Kong banks yesterday rejected suggestions they were offering refunds to investors in minibonds backed by bankrupt US bank Lehman Brothers, after a report that one had agreed to pay back a customer.
Mevas Bank, a subsidiary of Dah Sing Bank, issued a firm denial that it had refunded a customer. Standard Chartered, Fubon Bank, DBS, Chong Hing Bank, Citibank, Wing Lung Bank, Bank of China (Hong Kong), Chiyu Banking Corporation, Nanyang Commercial Bank and Shanghai Commercial Bank all said they had not concluded any refund agreements with clients. Bank of East Asia and Citic Ka Wah Bank said only that they were handling complaints. Other banks did not respond.
Since Lehman Brothers, the fourth-largest US investment bank, filed for bankruptcy on September 15, hundreds of investors have been demanding refunds from the banks and brokerages that sold them the minibonds – high-risk credit-linked derivatives marketed as proxy investments in well-known companies – and similar complex derivatives.
Hong Kong investors have bought HK$15.6 billion in minibonds and similar derivatives backed by Lehman Brothers. They stand to lose most, if not all, their money. A Chinese-language newspaper this week reported that Mevas Bank had agreed to a refund for a minibond investor. It quoted Democratic Party legislator-elect Kam Nai-wai, who is helping a group of the investors, as saying that the investor had asked that their name be withdrawn from a list of those seeking help. Mr Kam would neither confirm nor deny the report.
In response to Mevas Bank’s denial, he said: “It’s no surprise … They don’t want the other investors to know.” The Mevas investor declined comment. No other investors have withdrawn their requests to the Democratic Party for help. Some investors drew hope from the rumours. “
There’s justice in this world,” said Grace Lau Ngar-pui, organiser of a group of investors who bought Lehmanbacked investment products from ABN Amro, She also believes Mevas’ denial is a tactic to ward off other investors who want a refund.
Yesterday, for the first time, Secretary for Financial Services and the Treasury Chan Ka-keung discussed the complaints with representatives of the banks, brokerages, trustees, the Monetary Authority and the Securities and Futures Commission. The two watchdogs are, respectively, investigating the banks and brokerages which sold the investments. “I specifically urged the banks to seriously and quickly handle the complaints about the methods used for selling the minibonds,” he said.
The Hong Kong Association of Banks has decided to form a taskforce to deal with the minibonds issue. The authority has received 3,555 complaints about minibonds.
Thursday, October 2, 2008
Question for Member of Parliament
One question investors may want to ask MPs is What is the point of a regulatory system that does not lead to investor compensation?"
MAS has said "However, investors should understand that while regulatory actions are important to deter breaches and uphold the integrity of the system, they do not lead to compensation for investors"
MAS has said "However, investors should understand that while regulatory actions are important to deter breaches and uphold the integrity of the system, they do not lead to compensation for investors"
Immense pressure to sell the structured products
Dear Mr Tan KL,
In today's TodayOnline a certain L H Tang, who is a personal financial consultant gave a first person perspective, of his job in the forum letter. Below is an excerpt:
"......Consumers should understand that consultants are under immense pressure to think of ways such products can be“beneficial” to them."
http://www.todayonline.com/articles/279135.asp
The content is quite similar to that posted in the Straits Time Online Forum on 01/10/08 by Ms Geraldine Teng. If we are able to gather more of such statements from Relationship Managers /
Financial Consultants it would be evidentially beneficial in proving that these RM / FC were under immense pressure to push or hard sell such high risk products as 'low risk' products backed by the reputable banks.
Your kind assistance in this matter is highly commendable.
TKH
REPLY
Financial advisers or relationship managers who face similar pressure to achieve sales results can send an e-mail to me at kinlian@gmail.com
In today's TodayOnline a certain L H Tang, who is a personal financial consultant gave a first person perspective, of his job in the forum letter. Below is an excerpt:
"......Consumers should understand that consultants are under immense pressure to think of ways such products can be“beneficial” to them."
http://www.todayonline.com/articles/279135.asp
The content is quite similar to that posted in the Straits Time Online Forum on 01/10/08 by Ms Geraldine Teng. If we are able to gather more of such statements from Relationship Managers /
Financial Consultants it would be evidentially beneficial in proving that these RM / FC were under immense pressure to push or hard sell such high risk products as 'low risk' products backed by the reputable banks.
Your kind assistance in this matter is highly commendable.
TKH
REPLY
Financial advisers or relationship managers who face similar pressure to achieve sales results can send an e-mail to me at kinlian@gmail.com
Meet your Members of Parliament
I am compiling a list of investors (who signed the Petition) according to their residential postal code. This allows them to contact other investors in the same constituency and meet the members of Parliament.
Call for volunteers: If you are willing to call other investors to meet the MP, please send an email to me at kinlian@gmail.com giving your name, mobile phone, and postal code now.
It is better for the investors to meet the MP during the weekly "Meet the People" session and tell your MP how you were misled into investing in the high risk structured products.
If the MP meets several of the investors personally, they will better appreciate the problem. They may ask MAS to be pro-active in helping the investors to deal with the financial institution that sold the structured products.
You can find out your Member of Parliament and the venue, day and time of the "Meet the People" session from this website:
http://www.parliament.gov.sg/cgi-bin/new-mpsearch.pl
Call for volunteers: If you are willing to call other investors to meet the MP, please send an email to me at kinlian@gmail.com giving your name, mobile phone, and postal code now.
It is better for the investors to meet the MP during the weekly "Meet the People" session and tell your MP how you were misled into investing in the high risk structured products.
If the MP meets several of the investors personally, they will better appreciate the problem. They may ask MAS to be pro-active in helping the investors to deal with the financial institution that sold the structured products.
You can find out your Member of Parliament and the venue, day and time of the "Meet the People" session from this website:
http://www.parliament.gov.sg/cgi-bin/new-mpsearch.pl
Send feedback to NTUC Income
Dear Mr Tan,
Do you have the NTUC Income CEO's email address for me to file a complaint to? Their call centre and email service are useless and they do nothing to help me.
My wife's total hospitalisation bill is $9k. She has an operation on (date). Till now, the claims department only paid out $250 Medishield claims. My wife has a Income Shield Insurance Preferred Plan with Rider Plan and they only paid out $250 in claims so far. I have called the claim department and they keep saying they will get back to us as they are processing it or wait for their letters. I have already paid $3k in cash upfront before her operation. Now the hospital has deducted $3k from my wife's medisave and now the hospital is demanding us to pay the remaining 3K. What is happening to NTUC now?
The irony is right now they have just sent me a letter to ask me to renew my incomeshield policy stating the benefits and advantages of signing up with them.
EL
REPLY
I suggest that you send a registered letter addressed to the CEO of NTUC Income:
Bras Basah Branch
75 Bras Basah Road,
NTUC Income Centre
Singapore 189557
Or you can send a fax to 67883777
If there is delay in settling your claim, you can file a complaint to FiDREC, www.fidrec.com.sg
Do you have the NTUC Income CEO's email address for me to file a complaint to? Their call centre and email service are useless and they do nothing to help me.
My wife's total hospitalisation bill is $9k. She has an operation on (date). Till now, the claims department only paid out $250 Medishield claims. My wife has a Income Shield Insurance Preferred Plan with Rider Plan and they only paid out $250 in claims so far. I have called the claim department and they keep saying they will get back to us as they are processing it or wait for their letters. I have already paid $3k in cash upfront before her operation. Now the hospital has deducted $3k from my wife's medisave and now the hospital is demanding us to pay the remaining 3K. What is happening to NTUC now?
The irony is right now they have just sent me a letter to ask me to renew my incomeshield policy stating the benefits and advantages of signing up with them.
EL
REPLY
I suggest that you send a registered letter addressed to the CEO of NTUC Income:
Bras Basah Branch
75 Bras Basah Road,
NTUC Income Centre
Singapore 189557
Or you can send a fax to 67883777
If there is delay in settling your claim, you can file a complaint to FiDREC, www.fidrec.com.sg
Proposed Commission on Life Insurance Products
Dear Mr. Tan,
I have a proposal. In future the products will have a low cost(commission and expenses) and reasonable profit margin for the company.
Commission will range between 5-10%
1. whole life and endowment products will pay 10% for 1st year and 5% next 2 years.
2.Term products will pay 5% for 2 years.
3.Other products 5% for 1 year.
The commissions above are to be paid to agents who sell and push products and do nothing but soliciting and form filling.
Those who are qualified and competent and who can prove professional competence in specific area to provide financial planning advice can charge a NEGOTIABLE FEE (hourly or piece rate)with customers.
This will keep the cost low for the consumers and the company. The products can charge low premium for larger coverage and higher return of about 4% after 10 years.
This model will attract those advisers who are serious about helping people to upgrade themselves and to be paid according to service and work done for the customers.
For agents who sell only, they get the commission as in the products.
This will be akin to other professions where fee commensurate with professional advice and work and not for form filling, legwork or solicitation and some other non financial services.
This is the most equitable and agents who think of 'get rich quick' are nor suitable for this trade.This will stop mis-selling and misrepresentation, unethical selling , conflict of interest and malpractices.
This will weed out agents who are in the business just for the money and who not interested in helping the customers. This will elevate the profession .
Fair Dealing
REPLY
Under the current market price, the commission paid to agents is 5 to 10 times of the above proposed rates. I agree that the current commission rates are too high and unfair to consumers. I advice consumers to look at the commission rates stated in the Benefit Illustration and avoid life insurance products that pay comissions of $1,000 or more to the insurance agent.
I have a proposal. In future the products will have a low cost(commission and expenses) and reasonable profit margin for the company.
Commission will range between 5-10%
1. whole life and endowment products will pay 10% for 1st year and 5% next 2 years.
2.Term products will pay 5% for 2 years.
3.Other products 5% for 1 year.
The commissions above are to be paid to agents who sell and push products and do nothing but soliciting and form filling.
Those who are qualified and competent and who can prove professional competence in specific area to provide financial planning advice can charge a NEGOTIABLE FEE (hourly or piece rate)with customers.
This will keep the cost low for the consumers and the company. The products can charge low premium for larger coverage and higher return of about 4% after 10 years.
This model will attract those advisers who are serious about helping people to upgrade themselves and to be paid according to service and work done for the customers.
For agents who sell only, they get the commission as in the products.
This will be akin to other professions where fee commensurate with professional advice and work and not for form filling, legwork or solicitation and some other non financial services.
This is the most equitable and agents who think of 'get rich quick' are nor suitable for this trade.This will stop mis-selling and misrepresentation, unethical selling , conflict of interest and malpractices.
This will weed out agents who are in the business just for the money and who not interested in helping the customers. This will elevate the profession .
Fair Dealing
REPLY
Under the current market price, the commission paid to agents is 5 to 10 times of the above proposed rates. I agree that the current commission rates are too high and unfair to consumers. I advice consumers to look at the commission rates stated in the Benefit Illustration and avoid life insurance products that pay comissions of $1,000 or more to the insurance agent.
Posting comments in my blog
I like to ask readers who post comments in my blog to observe the following:
1. Write your full name at the bottom of your comment
2. Avoid defamatory statements against any person
3. Avoid political statements
I will disallow any comment that fail to observe the above requests.
1. Write your full name at the bottom of your comment
2. Avoid defamatory statements against any person
3. Avoid political statements
I will disallow any comment that fail to observe the above requests.
Failure to observe the risk assessment
Dear Mr. Tan,
Under the Financial Adviser Act, financial advisers are required to collect information about a client's financial objective, risk tolerance, employment status and financial situation, among othe things, before they can make a recommendation on an investment product.
In my case, I bought the Minibond product in Feb 07. My intention was to open a fixed deposit account. After recommendation and confirmation to buy the product, the relationship manager then collected the infomations as stated in the Act.
Please let the others victims who also bought from the financial institution, especially aunties and uncles, know whether they were in the same scenerio as me.
Under the Financial Adviser Act, financial advisers are required to collect information about a client's financial objective, risk tolerance, employment status and financial situation, among othe things, before they can make a recommendation on an investment product.
In my case, I bought the Minibond product in Feb 07. My intention was to open a fixed deposit account. After recommendation and confirmation to buy the product, the relationship manager then collected the infomations as stated in the Act.
Please let the others victims who also bought from the financial institution, especially aunties and uncles, know whether they were in the same scenerio as me.
Ask your Member of Parliament
Questions that burnt investors of structured products can put to their Member of Parliament:
http://thinkhappiness.blogspot.com/2008/10/test-your-mp.html
http://thinkhappiness.blogspot.com/2008/10/test-your-mp.html
Avoid going to court
http://www.thestandard.com.hk/news_detail.asp?pp_cat=11&art_id=72415&sid=20823932&con_type=1&d_str=20081002
Three banks are secretly negotiating with angry investors to prevent being taken to court over the distribution of Lehman Brothers minibonds, according to sources. They are among 21 banks and financial institutions with exposure to Lehman Brothers investment products but which are said to have only a few investors and prefer a settlement rather than a court case. According to the source, the banks involved are Dah Sing Bank, DBS Bank (Hong Kong) and Mevas Bank, which is part of the Dah Sing Banking Group
Three banks are secretly negotiating with angry investors to prevent being taken to court over the distribution of Lehman Brothers minibonds, according to sources. They are among 21 banks and financial institutions with exposure to Lehman Brothers investment products but which are said to have only a few investors and prefer a settlement rather than a court case. According to the source, the banks involved are Dah Sing Bank, DBS Bank (Hong Kong) and Mevas Bank, which is part of the Dah Sing Banking Group
Merill Lynch Jubilee 3
Dear Mr Tan,
Below is the official notice from Merrill Lynch on the Jubilee 3. It's devastating to for those who have invested in this instrument.
I have read your blogs and the various reasons for people to seek better yielding products because of the extremely low savings and fixed deposit rates.
People who sought after fixed income products are normally adverse to high risk. It's not because of greed. Any sane person would want their savings to have higher returns to hedge against the mounting inflation. Products like Mini Bonds, Jubilee 3,
High Notes 2/5 & Pinaccle notes all come under the fixed income instruments. If there were to be other fixed income products which are straight forward to understand, I believe these risk adverse investors would rather park their money there, including myself. Government bonds are beyond reach of the ordinary because of the high minimum amount required.
Sophisticated structured products inevitably filled the vacuum. Keeping our money under the pillow or savings banks will be foolish if we were to take a leaf from the
famous Rich-Dad-Poor-Dad's aurhor, Robert K. What alternatives do we have when these glossy products roll out of the creative mills of banks?
Not surprisingly, many of us will take the bite.
Please help publish the ML Jubilee 3 in your blog for comments. It seems that there is no recourse at all based on the way it's worded.
Thank You Very Much!
Best Regards
SHNeo
Dear All
Please see the latest official word from Merrill with regards to Jubilee 3.
Q1. What is the status of the Notes?
Lehman Brothers Holdings Inc., (“Lehman”) being one of the Reference Entities, filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code on 15 September 2008. This filing constitutes a Credit Event under the terms and conditions of the Notes. The Swap Counterparty has submitted a Credit Event Notice to the Issuer on or about 23 September 2008.
Q2. What happens next to the Notes?
The Issuer will redeem the Notes early on the Credit Event Redemption Date which shall occur no later than the 30th London, Singapore and New York Business Day after the date on which the Credit Event Notice was delivered by the Swap Counterparty to the Issuer. In addition, the Notes will cease to bear interest with effect from the 23 June 2008, being the Interest Payment Date immediately preceding the date of delivery of the Credit Event Notice
Q3. How will the Credit Event Redemption Amount be calculated?
The Credit Event Redemption Amount to be determined by the Calculation Agent for and on behalf of the Issuer will be an amount equal to the sum of:
a) the amount which would be realised on the sale of certain debt obligations of Lehman selected by the Calculation Agent in a nominal amount equal to the then outstanding principal amount of the Notes, less costs and expenses associated with the said sale;
b) the Liquidation Proceeds of the Securities minus the then outstanding principal amount of the Notes which shall be
(i) expressed as a positive amount if the Liquidation Proceeds of the Securities are greater than the then outstanding principal amount of the Notes,
(ii) expressed as a negative amount if the Liquidation Proceeds of the Securities are less than the then outstanding principal amount of the Notes and (iii) zero if the Liquidation Proceeds of the Securities are equal to the then outstanding principal amount of the Notes; and
c) the amount of any early termination amount or close out payment receivable (expressed as a positive amount) or payable (expressed as a negative amount) by the Issuer under the Swap Agreement to the Swap Counterparty.
Q4. What is the likely Credit Event Redemption Amount?
The Credit Event Redemption Amount will be determined by the Calculation Agent in accordance with the procedures described in the Pricing Statement. Based on current market conditions, the Credit Event Redemption Amount is likely to be zero or an amount close to zero. It is likely that Noteholders will lose all or substantially all of their principal invested in the Notes. The Calculation Agent will notify you of the Credit Event Redemption Amount as soon as reasonably practicable after its determination.
Q5. What actions do Noteholders need to take and who should they contact if they have questions?
Noteholders who have any questions on this Notice or are unsure as to the action they should take should contact the Distributor through whom they have subscribed for the Notes.
Q6. How will I be notified of the status of the Notes?
Investors should receive notices in one of two ways:
(i) either through one of the distributors or
(ii) directly from the Issuer (Jubilee).
The Issuer has prepared a “Notice to Noteholders” stating that a Credit Event has occurred in respect of Lehman. This Notice was delivered by the Issuer to the various distributors on or about September 25, 2008. The Issuer is preparing to directly mail notices to investors once it receives relevant mailing information from CDP. The Issuer also expects to prepare and distribute a valuation notice informing the Noteholders of the Credit Event Redemption Amount once such amount is determined.
Q7. Can you provide more information on how the Credit Event Redemption Amount is calculated?
The Credit Event Redemption Amount is calculated in accordance with the formula described in the Pricing Statement. See also Q3 above. The Credit Event Redemption Amount is based (among other things) on the amount realized on the sale of certain debt obligations of Lehman. Because Lehman has filed for bankruptcy, these Lehman obligations are trading significantly below their face value. Generally speaking,
these Lehman obligations are currently valued below 20% of their face value. This amount will be further adjusted by
(i) any loss in the liquidation of the Securities (see also Q8 below), and
(ii) any termination amounts due or payable under the swap, to arrive at the Credit Event Redemption Amount. Based on current market conditions we expect the Credit Event Redemption Amount to be zero.
Q8. Can you explain what the Securities represent and whether there is a loss in value in respect of the Securities?
The Securities are notes whose performance is credit-linked to a pool of 120 Underlying Reference Entities.
The current U.S. financial crisis has led to unfavorable market conditions in the broad credit markets which has led to a significant decline in the value of the Securities. The liquidation proceeds of the Securities will likely be significantly less than the face value of the Securities.
AIS is in constant communication with Merrill to bring you the latest updates.
Below is the official notice from Merrill Lynch on the Jubilee 3. It's devastating to for those who have invested in this instrument.
I have read your blogs and the various reasons for people to seek better yielding products because of the extremely low savings and fixed deposit rates.
People who sought after fixed income products are normally adverse to high risk. It's not because of greed. Any sane person would want their savings to have higher returns to hedge against the mounting inflation. Products like Mini Bonds, Jubilee 3,
High Notes 2/5 & Pinaccle notes all come under the fixed income instruments. If there were to be other fixed income products which are straight forward to understand, I believe these risk adverse investors would rather park their money there, including myself. Government bonds are beyond reach of the ordinary because of the high minimum amount required.
Sophisticated structured products inevitably filled the vacuum. Keeping our money under the pillow or savings banks will be foolish if we were to take a leaf from the
famous Rich-Dad-Poor-Dad's aurhor, Robert K. What alternatives do we have when these glossy products roll out of the creative mills of banks?
Not surprisingly, many of us will take the bite.
Please help publish the ML Jubilee 3 in your blog for comments. It seems that there is no recourse at all based on the way it's worded.
Thank You Very Much!
Best Regards
SHNeo
Dear All
Please see the latest official word from Merrill with regards to Jubilee 3.
Q1. What is the status of the Notes?
Lehman Brothers Holdings Inc., (“Lehman”) being one of the Reference Entities, filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code on 15 September 2008. This filing constitutes a Credit Event under the terms and conditions of the Notes. The Swap Counterparty has submitted a Credit Event Notice to the Issuer on or about 23 September 2008.
Q2. What happens next to the Notes?
The Issuer will redeem the Notes early on the Credit Event Redemption Date which shall occur no later than the 30th London, Singapore and New York Business Day after the date on which the Credit Event Notice was delivered by the Swap Counterparty to the Issuer. In addition, the Notes will cease to bear interest with effect from the 23 June 2008, being the Interest Payment Date immediately preceding the date of delivery of the Credit Event Notice
Q3. How will the Credit Event Redemption Amount be calculated?
The Credit Event Redemption Amount to be determined by the Calculation Agent for and on behalf of the Issuer will be an amount equal to the sum of:
a) the amount which would be realised on the sale of certain debt obligations of Lehman selected by the Calculation Agent in a nominal amount equal to the then outstanding principal amount of the Notes, less costs and expenses associated with the said sale;
b) the Liquidation Proceeds of the Securities minus the then outstanding principal amount of the Notes which shall be
(i) expressed as a positive amount if the Liquidation Proceeds of the Securities are greater than the then outstanding principal amount of the Notes,
(ii) expressed as a negative amount if the Liquidation Proceeds of the Securities are less than the then outstanding principal amount of the Notes and (iii) zero if the Liquidation Proceeds of the Securities are equal to the then outstanding principal amount of the Notes; and
c) the amount of any early termination amount or close out payment receivable (expressed as a positive amount) or payable (expressed as a negative amount) by the Issuer under the Swap Agreement to the Swap Counterparty.
Q4. What is the likely Credit Event Redemption Amount?
The Credit Event Redemption Amount will be determined by the Calculation Agent in accordance with the procedures described in the Pricing Statement. Based on current market conditions, the Credit Event Redemption Amount is likely to be zero or an amount close to zero. It is likely that Noteholders will lose all or substantially all of their principal invested in the Notes. The Calculation Agent will notify you of the Credit Event Redemption Amount as soon as reasonably practicable after its determination.
Q5. What actions do Noteholders need to take and who should they contact if they have questions?
Noteholders who have any questions on this Notice or are unsure as to the action they should take should contact the Distributor through whom they have subscribed for the Notes.
Q6. How will I be notified of the status of the Notes?
Investors should receive notices in one of two ways:
(i) either through one of the distributors or
(ii) directly from the Issuer (Jubilee).
The Issuer has prepared a “Notice to Noteholders” stating that a Credit Event has occurred in respect of Lehman. This Notice was delivered by the Issuer to the various distributors on or about September 25, 2008. The Issuer is preparing to directly mail notices to investors once it receives relevant mailing information from CDP. The Issuer also expects to prepare and distribute a valuation notice informing the Noteholders of the Credit Event Redemption Amount once such amount is determined.
Q7. Can you provide more information on how the Credit Event Redemption Amount is calculated?
The Credit Event Redemption Amount is calculated in accordance with the formula described in the Pricing Statement. See also Q3 above. The Credit Event Redemption Amount is based (among other things) on the amount realized on the sale of certain debt obligations of Lehman. Because Lehman has filed for bankruptcy, these Lehman obligations are trading significantly below their face value. Generally speaking,
these Lehman obligations are currently valued below 20% of their face value. This amount will be further adjusted by
(i) any loss in the liquidation of the Securities (see also Q8 below), and
(ii) any termination amounts due or payable under the swap, to arrive at the Credit Event Redemption Amount. Based on current market conditions we expect the Credit Event Redemption Amount to be zero.
Q8. Can you explain what the Securities represent and whether there is a loss in value in respect of the Securities?
The Securities are notes whose performance is credit-linked to a pool of 120 Underlying Reference Entities.
The current U.S. financial crisis has led to unfavorable market conditions in the broad credit markets which has led to a significant decline in the value of the Securities. The liquidation proceeds of the Securities will likely be significantly less than the face value of the Securities.
AIS is in constant communication with Merrill to bring you the latest updates.
People to be blamed
Comment posted in my blog
Blame MAS for not enforcing the rules it set stringently like section 27 of the FAA governing the behaviour and the way advisers should approach the needs of their clients.
Blame MAS for not vetting stringently the products before allowing for release into the market.
Blame the company for being greedy and overly profit oriented and overlooked the need of the consumers.
Blame the company for being lax in the compliance by their salespeople, the RMs and agents.
Blame the salespeople or RMs or agents for being greedy and NEGLECTING and ignoring WILLFULLY the needs of the consumers.
Blame the RMs and the agents for being unqualified and incompetent to dispense this advice.
The banks must bear the full responsibility for their errors and their salespeople's incompetence and mis-selling. The aggrieved investors must be compensated minimally the return of their capital.
Blame MAS for not enforcing the rules it set stringently like section 27 of the FAA governing the behaviour and the way advisers should approach the needs of their clients.
Blame MAS for not vetting stringently the products before allowing for release into the market.
Blame the company for being greedy and overly profit oriented and overlooked the need of the consumers.
Blame the company for being lax in the compliance by their salespeople, the RMs and agents.
Blame the salespeople or RMs or agents for being greedy and NEGLECTING and ignoring WILLFULLY the needs of the consumers.
Blame the RMs and the agents for being unqualified and incompetent to dispense this advice.
The banks must bear the full responsibility for their errors and their salespeople's incompetence and mis-selling. The aggrieved investors must be compensated minimally the return of their capital.
Loss of life savings
Dear Mr. Tan
My mother in law is 70 years old also a victim of the recent Lehman Brothers collapse. She worked hard as a cleaner and now still working at school canteen to maintain her income. She has been working almost her entire life and children gave her to save $100,000 put in hong leong mini bond series 9 on Aug (interest 4.3% not much difference from 3% insurance saving). She just invested 1 mth ago and did not even has a chance to receive 1st interest and whole saving collapsed.
I really felt sorry for her that she walked into wrong place at wrong time. The money was in FD with HLF till FM introduced mini bond to her and her daughter. FM told both of them that it based on only 6 entities which are fundamental well established (all singapore companies). She(FM) told them if any of the companies collapsed they will pay based percentage paid out.
How is Lehman brothers involved in this mini bond series 9they still unknown? because they do not understand overseas investment status at all. My mother in law only knew HLF, she always trust HLF because HLF always helping senior citizen folks to get better and high interest than other banks. My mother in law always praised HLF boss is a good boss. Till today her daughter did not tell her mother the true. She praying and hoping for good news to come. She hope MAS will help to get back the money. She not hoping for full pay out but at least 80% will be fine. The rest she will top up for her and let the whole issue rest.
MN
REPLY
You should help your mother in lodge to lodge a complaint with the financial institution that sold the product to her.
My mother in law is 70 years old also a victim of the recent Lehman Brothers collapse. She worked hard as a cleaner and now still working at school canteen to maintain her income. She has been working almost her entire life and children gave her to save $100,000 put in hong leong mini bond series 9 on Aug (interest 4.3% not much difference from 3% insurance saving). She just invested 1 mth ago and did not even has a chance to receive 1st interest and whole saving collapsed.
I really felt sorry for her that she walked into wrong place at wrong time. The money was in FD with HLF till FM introduced mini bond to her and her daughter. FM told both of them that it based on only 6 entities which are fundamental well established (all singapore companies). She(FM) told them if any of the companies collapsed they will pay based percentage paid out.
How is Lehman brothers involved in this mini bond series 9they still unknown? because they do not understand overseas investment status at all. My mother in law only knew HLF, she always trust HLF because HLF always helping senior citizen folks to get better and high interest than other banks. My mother in law always praised HLF boss is a good boss. Till today her daughter did not tell her mother the true. She praying and hoping for good news to come. She hope MAS will help to get back the money. She not hoping for full pay out but at least 80% will be fine. The rest she will top up for her and let the whole issue rest.
MN
REPLY
You should help your mother in lodge to lodge a complaint with the financial institution that sold the product to her.
Stop pushing financial products
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.
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.
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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