Investing in mutual funds / unit fund / ETF with an insurance agent

Hi anon,

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I'm a FA, and based on your statement either 1) You're about to do a 101 ILP or 2) You're about to start a WRAP based type of account.

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I don't agree with 1). Such 101 ILPs will have some form of lock ins, etc, and surrender penalties are huge. There will be carrots in the form of 'start up bonuses' but that's not the reason why you should invest, that'll be putting the cart before the horse. You probably have to commit for a period of time, and it might get sticky if you lose your job or take a pay cut.

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The policy level fees on such ILPs are also quite high (they used to be worse, trust me) and I just can't justify it for most people. Acccess to institutional funds is not a reason to go with such ILPs too; sometimes, funds are institutional for a reason, as only the most seasoned or deep pocketed investors are suited to certain investing styles.

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2), on the other hard, represents a portfolio that would be set up for you by an advisor, who will craft the portfolio based on a discussion to understand your needs and goals. The cost of ongoing advice as well as the platform provided to you is charged through a WRAP fee, and this may be a better way to invest, provided that you are not keen to manage and monitor on your own. (If you are keen or savvy, no need to engage an advisor, but your decisions will be yours and yours alone). WRAP fees are probably on the order of 1%-1.5%, certain more passive portfolios may have a WRAP fee of 0.5%. 2% is rather high.

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While I won't outright provide any advice on what you should or should not do here, I personally wouldn't do 1). Just saying.

No. Why would you let a salesman handle your hard earn $$$.

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I rather you use robo-advisor or choosing a broad based ETF.