Anonymous
Anyone else feeling scammed by AXA INSPIRE (OA)?
My mum put in a lump sum of $30,000 in 2002 and its value is now SGD 39,044. I did a quick calculation and derived that this is an annualized ROI of 1.56%. The reason behind this was that the initial agent left the company and his successor did not follow up / switch to a better-participating fund on our behalf. At this kind of ROI, wouldn't my mum be better off leaving the money in her CPF OA? There is a further 5% sales charge on the total account value during surrender too.
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Jonathan Chia Guangrong
07 Jun 2019
SOC at Local FI
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Firstly, an agent cannot switch funds on client's behalf without specific instructions to do so. Can recommend a new fund to switch into, but final instructions still need to come from client. The new assigned agent not following up with your mum is frankly nothing new. A lot of agents from what I see do not follow up with orphan clients until very much later.
Secondly, there are a lot of charges with regards to unit trusts. I'm of the strong personal opinion that CPF funds should not be used for unit trusts, mainly due to said charges. Not to mention that fees still need to be paid when the fund delivers a negative return (yes you pay for it and not the fund manager). For your mum's case, the fund still generated returns albeit at a lower rate as compared to OA account's guaranteed rates. This is the opportunity cost.
Personal opinon, your mum should leave the funds in her OA account unless she knows how to pick stocks / buy into reits on her own.