Dear Mr Tan,
Thank you for your effort in seeking justifications for innocent investors.
While investigations do help, much could have been done to prevent this crisis from happening which started in the United States last year. At the onset, many financial institutions had been trying to cover up their losses for their exposure in the sub-prime credits and loans. The Japanese used to cover up their losses by sweeping them under the carpet. However, the Westerners cover up (or pass on) their losses (and risks) by "auditing" their books, and/or repackaged their risks and exposures into "High Yield Notes" or "Funds" to be sold to retail investors globally via local financial institutions.
Incidentally, the very people who packaged such products, so-called "investment bankers" or "funds managers" knew the risks of such products are extremely high, and also that defaults in payment by those very Sub-Prime borrowers were also high, are the same group of people who are not only "highly" educated - academically, but also people who think they are smarter than the man-in-the-street.
Long before this financial crisis erupted, as a financial trader, I had been advising people from taking risks which they are unfamiliar with. Relationship managers in banks - just how much do they know about those financial products which they had been selling to their customers? Even portfolio managers and fund managers do not know precisely how such funds are packaged! While insurance may be quite an outright product, investment-linked products and other financial investment products can never be thoroughly understood by the average fund manager or relationship manager, let alone the average investor. Such products are normally sold by relationship managers basing on their on quota(s) (not forgetting their monetary rewards) and fine tuned (in sales presentation) to suit the need of their customers.
Hence, I feel that MAS should also be fully responsible for its failure to ensure that these investment products were thoroughly "safe" enough to be marketed by financial institutions here, let alone sold by inexperience relationship managers. In addition, bankers should also be held accountable.
This is not going to be an easy crisis, but it will be one that is going to force all central bankers to clear up the whole financial system, globally. And it is going to take at least the next 5 to 10 years for it to be over. Lowering interest rates is not going to help at all since most of the financial institutions had been trying to cover up their exposures since the eruption of the Sub-Prime Crisis last August.
MT
Thursday, October 9, 2008
Get information from my blog
Dear Mr Tan
I have bought ML Jubilee Series 8 Note on Jun 2008. I heard that Jubilee Series 3 Note is almost dropped to zero value. Is it true? Could you please give me an advice how to handle Jubilee Series 8 Note.
REPLY
I suggest that you ask the trustee or the distributor bank about the value of your investment.
If you feel that you have been misled into investing in this structured product, you should lodge a complaint with the CEO of the distributor that sold the product to you. If this is not resolved, you have to lodge a complaint with FiDREC.
Please follow the guidelines in my blog. I am not able to handle individual request, as it will take a lot of my time, and I cannot afford to spend this time.
I have bought ML Jubilee Series 8 Note on Jun 2008. I heard that Jubilee Series 3 Note is almost dropped to zero value. Is it true? Could you please give me an advice how to handle Jubilee Series 8 Note.
REPLY
I suggest that you ask the trustee or the distributor bank about the value of your investment.
If you feel that you have been misled into investing in this structured product, you should lodge a complaint with the CEO of the distributor that sold the product to you. If this is not resolved, you have to lodge a complaint with FiDREC.
Please follow the guidelines in my blog. I am not able to handle individual request, as it will take a lot of my time, and I cannot afford to spend this time.
Book on financial planning
I hope to be able to find the time to start on my book, after the financial crisis is over:
http://tankinlian.blogspot.com/2008/09/book-on-financial-planning.html
http://tankinlian.blogspot.com/2008/09/book-on-financial-planning.html
Unhappy with bank's complaint handling process (2)
Dear Mr Tan,
I also attended a fact-finding session at the bank, and there were 2 bank officers present.
I was quite surprised by the way it was conducted. It felt as if the same questions were repeated over again but in different words, many times.
And each time I raised a query, the officer reacted by pointing to my signature on the back of the form, in support of the bank's position and the RM.
I also asked for a copy of the thick risk profile form with my signature on it but they refused to give me a copy for me to take home and run through. It looked totally unfamiliar to me and I wanted to see what the RM could have written about me then as I was with the RM for less than 30mins one year ago.
All the forms they had in their file were filled in by the RM, comments, ticks...etc (not my hand writing) On the main application form, there was however a slight difference on their copy compared to the one I had.
I understand from the bank officers that the independent person appointed by MAS to oversee the investigation has the authority to select case files to take a look but it does not mean that all cases will be looked into by this independent person.
MAS should assign independent assistants (not employed by the bank) to help review all cases to ensure each case is given due attention and justice, afterall our Government should try its best to help us citizens as much as possible.
REPLY
You have the right to ask for a copy of the document that you were supposed to have signed. You can challenge statements that are written by the representative, if they do not reflect the true situation, e.g. the representative write on your behalf without checking with you. Or if the representative ask you to sign first, and fill in the details later.
I also attended a fact-finding session at the bank, and there were 2 bank officers present.
I was quite surprised by the way it was conducted. It felt as if the same questions were repeated over again but in different words, many times.
And each time I raised a query, the officer reacted by pointing to my signature on the back of the form, in support of the bank's position and the RM.
I also asked for a copy of the thick risk profile form with my signature on it but they refused to give me a copy for me to take home and run through. It looked totally unfamiliar to me and I wanted to see what the RM could have written about me then as I was with the RM for less than 30mins one year ago.
All the forms they had in their file were filled in by the RM, comments, ticks...etc (not my hand writing) On the main application form, there was however a slight difference on their copy compared to the one I had.
I understand from the bank officers that the independent person appointed by MAS to oversee the investigation has the authority to select case files to take a look but it does not mean that all cases will be looked into by this independent person.
MAS should assign independent assistants (not employed by the bank) to help review all cases to ensure each case is given due attention and justice, afterall our Government should try its best to help us citizens as much as possible.
REPLY
You have the right to ask for a copy of the document that you were supposed to have signed. You can challenge statements that are written by the representative, if they do not reflect the true situation, e.g. the representative write on your behalf without checking with you. Or if the representative ask you to sign first, and fill in the details later.
Bank agree to buy back risky investments
Mr. Tan,
I came across this article and I think it will be helpful. I hope that this will convince MAS to do something to help the affected retail investor.
http://biz.yahoo.com/ap/081008/bank_of_america_settlement.html?.v=11
Bank of America Corp. has agreed to buy back up to $4.7 billion in auction-rate securities to settle charges it misled thousands of customers about the risky investments, federal and state regulators said Wednesday.
I came across this article and I think it will be helpful. I hope that this will convince MAS to do something to help the affected retail investor.
http://biz.yahoo.com/ap/081008/bank_of_america_settlement.html?.v=11
Bank of America Corp. has agreed to buy back up to $4.7 billion in auction-rate securities to settle charges it misled thousands of customers about the risky investments, federal and state regulators said Wednesday.
Wednesday, October 8, 2008
No personal investment in credit linked securities
I do not have any personal investments in the credit linked securities, such as the mini-bonds, high notes, pinnacle notes and jubilee notes.
I have warned investors for the past year that these products have risks that are not easily measurable, and that the higher yield does not justify the uncertain risk.
My wife was sold the pinnacle notes. Like many other investors, she was told that it offer a higher interest rate and the risk was small. I told her to go back to the finance company and get her money back. She was able to get the full refund.
Previously, my wife and daughter invested in capital guaranteed or capital protected products. They waited patiently for the product to mature after 5 years and received a miserable total return of only 2%. These products were structured to make profit for the financial institutions and were unfair to retail investors.
I am very sad that the financial institutions were allowed to offer these "unfair" structured products to retail investors during the past ten years. They make big profits for the financial institutions but leave the retail investors with a miserable return, or as in the current case, with the loss of most of their hard earned savings.
Nobody looked after the interest of the retail investors - not the regulator nor the consumer association.
I have warned investors for the past year that these products have risks that are not easily measurable, and that the higher yield does not justify the uncertain risk.
My wife was sold the pinnacle notes. Like many other investors, she was told that it offer a higher interest rate and the risk was small. I told her to go back to the finance company and get her money back. She was able to get the full refund.
Previously, my wife and daughter invested in capital guaranteed or capital protected products. They waited patiently for the product to mature after 5 years and received a miserable total return of only 2%. These products were structured to make profit for the financial institutions and were unfair to retail investors.
I am very sad that the financial institutions were allowed to offer these "unfair" structured products to retail investors during the past ten years. They make big profits for the financial institutions but leave the retail investors with a miserable return, or as in the current case, with the loss of most of their hard earned savings.
Nobody looked after the interest of the retail investors - not the regulator nor the consumer association.
Media interviews on Petition
The following media interviewed me regarding the Petition that was handled to MAS:
> Channel News Asia (Channel 8)
> Mediacorp Radio
> The Online Citizen (www.theonlinecitizen.com)
I have been quite frank in replying to the detailed questions from the media. Please watch TV and listen to the radio about the inteviews.
> Channel News Asia (Channel 8)
> Mediacorp Radio
> The Online Citizen (www.theonlinecitizen.com)
I have been quite frank in replying to the detailed questions from the media. Please watch TV and listen to the radio about the inteviews.
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