I was approached by my Financial Planner friend to buy AXA Pulsar (ILP). I’m a beginner to investing. Any advise on this if it’s a good investment option. Or will unit trust be a better alternative ?

Disclaimer: I’m not an agent/FA. Do be very careful on AXA Pulsar and make sure you read though and understand the Product Summary (over 20 pages) in detail. This applies to all ILP products. If unclear, DO NOT SIGN ON. (Note that the Product Summary doesn't even go into the process of how to pick a fund suitable for you, how to analyse its performance etc)

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For the first 18 months, AXA Pulsar’s charges are 5.5%pa which will be one of the highest/if not highest in the market. After 18 months, you will still need to continue to pay the 4% pa (on that 1 account that u contributed premiums into) and 1.5%pa for 30 years.

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There is a 168% bonus, which will compensate for the charges in the initial term but this is to “hook” you into the policy for 30 years. (Note you still need to pay the 4% and 1.5% for the rest of the 30 years).

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-Yes, the agent will present the projected performance of 4%pa, 8%pa or even 15%pa dividends by picking the funds that did well historically. Do note that future performance is never guaranteed.

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-Yes, the fund/unit trust switching is free. Note that if you keep on switching your unit trusts, it means the fund keeps under-performing every year. (If the fund is performing well, why switch).

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So whether it is worth-while to pay the agent for the "benefits" of helping you to invest in unit trusts, I am honestly not sure.

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By not going through an agent/FA, this approach will be cheaper and there's no commitment locked in so you can just test waters for a while to see if unit trust is suitable (there are many other products out there eg ETFs). But same thing applies, you will still hv to read up to see how to pick a fund suitable for you, how to analyse its performance etc.

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Honestly, I'm not sure if an agent can pick a better unit trust for you (just look at all the horror stories of ILPs underperforming). You might be better off investing in unit trusts directly and equipping yourself with the investing knowledge that can last a lifetime. And at least by investing directly, you aren't "locked" in for 30 years.

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So I feel whether you decide to invest through an ILP or invest directly into unit trusts, you will still need to have some basic 101 understanding of investing. At the end of the day, the agent /FA can only "recommend" certain investments, however, the agent does not bear any risk if the investments go sour. The agent /FA is also not incentivised to teach you the basics of investing despite sounding helpful (if not, why invest through them).

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So at least for myself, I feel it is better to learn at least the basics (eg what is an unit trust, why are they able to provide dividends, why do they not provide dividends, why unit trusts charge high fees etc, can google easily these days).

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The agent can "manage" your portfolio but at the end of the day, it was you who make the final decision to pick that investment, not the agent.

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My 2cts worth!

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Stay away!

I gotten the Pulsar plan months ago with AXA advisor, explained that 30-40% of my income should be set aside to invest, and propose that a 30yr term would be beneficial. However, it was after checking up online that I find out that she has misinterpreted the fees and charges to me after calling to check with AXA myself. I'm the lucky few who get to free look my plan while I can.

Dont get sweettalk into buying it. After meeting with this one, I'm skeptical how AXA manage their agent and if I'm getting anything from them again.

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Unethical agent should be barred.

Hi Sara,

There are alternatives such as Endowus, where you can invest passively in unit trusts, with no sales charges and 100% trailer fee rebates to help lower your overall costs.

You can even schedule a call with a financial advisor there:

https://endowus.com/insights/schedule-call-mas-...

What you can do is, look at the pros and cons between AXA Pulsar and Endowus's solutions, and decide for yourself if you wanna sign up either one or even both.

Disclaimer: PolicyWoke is a 2nd-hand endowment policies broker

Hi Sara as a Financial consultant/agent myself I hope I can provide some clarity for you. ILPs are good if you don't want to have any control over your investments and want a dedicated person to manage your investments for you. However as you know, this service requires high fees. As a beginner I believe there are better ways to go around investing, platforms such as stashaway may be a better option for you at this point in time, as management fees tend to be considerably lower and withdrawal is flexible.