Hi, you mentioned a 12% return to beat the market — are you sure this is guaranteed and not just a non-guaranteed illustration? Typically, projections are based on 4% to 8%, and for a financial advisor to quote 12% seems rather questionable. Most fund managers struggle to consistently outperform the market.

If there truly is a product that guarantees a 12% return, please share the details. I’d be happy to recommend it to the CPF Board or GIC, as such a product could greatly benefit Singaporean citizens.

Hi anon,

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Sigh. I'm quite certain its an ILP.

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Assuming you're talking about the returns that you were told about and not the 12% start up bonus (which requires $42K/yr of premiums), then here's my take:

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12% is only a projected return. What probably happened is that they used the historical performance of a fund to show you that 12% is possible and then the conversation continues from there.

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You have to ask a few questions amongst which

1. Can the fund sustain 12% moving forward? (Hint: while not impossible, probably not)
2. Are you prepared for the lock in and fees that come with an ILP, that will definitely erode your returns, plus basically 'claw' back the startup bonus and then some?
3. Even if you did not want to manage your own investments, and do not wish to learn how to do it, are there alternatives for you?

On investment based ILPs, I share my thoughts here and they have not changed all these years.

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Lastly, just to state things for the record: in my years as an advisor, I have not once recommended an ILP as viable for my client's situation. I suppose that should be something worth pondering about....

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Good luck!

Hmm I did a quick google and can only find HSBC Life Wealth Abundance that offers up to 12% start up bonus, which isn't really 12% per annum in case you meant that.

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In any case, ILPs like such are never worth your money due to their fees - don't be conned by those seemingly high/excessive returns!

Unlikely