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Thread: Investment or fixed deposit?

  1. #1

    Default Investment or fixed deposit?

    Last Saturday, my parents went to a local bank to withdraw some money. Again they were pull aside and were almost coaxed into putting money into 'Fixed' deposit when it is actually an investment. Fortunately my father decided to give me a call and I told them to bring all the document back and not to sign any paper.

    Have they not learnt a lesson? Why are they still playing the old trick? Those bank customer relationship officers are only interested in getting the commission and they do not bother about the consequences.... can something be done?

  2. #2
    Member Papilio's Avatar
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    Default Re: Investment or fixed deposit?

    Yes, I got that same treatment too a couple of weeks back. When I filled out the Risk Profile form, I put myself on the "Very Low Risk" category.

    Then I asked the officer, given my profile and the investment package that she was recommending, does she reckon that I could get all my money back if her recommended investment package fails?


  3. #3

    Default Re: Investment or fixed deposit?

    Quote Originally Posted by Papilio View Post
    Yes, I got that same treatment too a couple of weeks back. When I filled out the Risk Profile form, I put myself on the "Very Low Risk" category.

    Then I asked the officer, given my profile and the investment package that she was recommending, does she reckon that I could get all my money back if her recommended investment package fails?

    Besides my parents, many of the uncles and aunties were also brough aside. Just go to the banks and they are still doing it. They do not tell the true. They do not know the different between investment and fixed deposit! They do not know their product!!!!!!

  4. #4
    Member Papilio's Avatar
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    Default Re: Investment or fixed deposit?

    Yup. Maybe no one told them to stop, so it's business as usual...

  5. #5

    Default Re: Investment or fixed deposit?

    Eh technically fixed deposit is a form of investment also. As long as you put your money some where and get some form of interest, it is a kind of investment. All that matters is the risk and reward factor.

    But if you are saying that the bank staff says that it is fixed deposit but when it is really other forms of financial instrument, then you have a case. The bank staff is misdirecting your parents because different instruments carry different risks.

  6. #6

    Default Re: Investment or fixed deposit?

    Quote Originally Posted by littlewild View Post
    Eh technically fixed deposit is a form of investment also. As long as you put your money some where and get some form of interest, it is a kind of investment. All that matters is the risk and reward factor.

    But if you are saying that the bank staff says that it is fixed deposit but when it is really other forms of financial instrument, then you have a case. The bank staff is misdirecting your parents because different instruments carry different risks.
    Thanks for the info. I learn something new today! i.e. Risk and reward factor! I think it is the way the bank presents the case.
    Public must be educated to ask more question. The risk and the return. But they always target the elderly!

  7. #7

    Default Re: Investment or fixed deposit?

    this sounds like a followup story for the straits times.

    Bank executives still involved in mis-selling acts.

  8. #8
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    Default Re: Investment or fixed deposit?

    Quote Originally Posted by Yappy View Post
    Last Saturday, my parents went to a local bank to withdraw some money. Again they were pull aside and were almost coaxed into putting money into 'Fixed' deposit when it is actually an investment. Fortunately my father decided to give me a call and I told them to bring all the document back and not to sign any paper.

    Have they not learnt a lesson? Why are they still playing the old trick? Those bank customer relationship officers are only interested in getting the commission and they do not bother about the consequences.... can something be done?
    they need ur money to cover someone's backside. that's how things works.

  9. #9

    Default Re: Investment or fixed deposit?

    Quote Originally Posted by photoscholar View Post
    this sounds like a followup story for the straits times.

    Bank executives still involved in mis-selling acts.
    Yes they need to earn a living but it must be done professionally. Layman suffers!

  10. #10
    Senior Member giantcanopy's Avatar
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    Default Re: Investment or fixed deposit?

    After so much blood spilled over the minibond not long back and they are gaming for a second round.

  11. #11

    Default Re: Investment or fixed deposit?

    Quote Originally Posted by giantcanopy View Post
    After so much blood spilled over the minibond not long back and they are gaming for a second round.
    They just don't learn the lesson.... somebody must do something.

  12. #12

    Default Re: Investment or fixed deposit?

    Put it this way... this financial planners still have to earn a living despite the uproar. Hence they still have to do what they have been doing. That is to sell. And Im sure the banks didn't tell their staff to stop selling but to be more careful when selling.

    Honestly no offence but I never trust this kind of low level financial planners. Many of them have no experience in finance but have degrees in other fields and take a short course by the bank and they are thrown out as "experts". To me it's no better than a friend or acquaintance who simply read more books about finance than you. The real financial planners are those servicing big mega accounts. To me financial planner are just salesmen and women. simple as that.

    Just to share.... when AIG was having the big hoo hah and people were running to swamp their offices in fear of the company collapsing. An AIA staff called me to offer me some new investment/insurance policy. I felt like asking her did u read the papers?

    The strange thing about this "policy" is it is always a Filipino lady that calls me. And she always tells me it is a special offer policy and cannot be handled through my agent..... I always laugh and tell them... why on earth would I agree to any policy over the phone and tell them to ask my agent to call me instead. In which she will say he cannot because this is a special offer etc etc.. so I will tell her bye bye then... and then a few months later she will call me again.....

    Sigh now I hand my phone up the moment I hear a Filipino voice or PRC voice.....

    Either con artists or sales women.....

  13. #13

    Default Re: Investment or fixed deposit?

    actually,

    fixed deposits also got risk what.

    I think the current mini bonds issue is really blown out of proportion. I mean if I put my money in DBS fixed deposit and DBS goes belly up like Lehman, can I demand all my money back???

    Lehman is a BIG bank in America and the risk of them collapsing is really low 2 years back.

  14. #14
    vince123123
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    Default Re: Investment or fixed deposit?

    Perhaps the issue isn't so much that the bank goes belly up, but whether the investors of that particular product know that they lose everything when the bank goes belly up.

    For a fixed deposit, everyone knows that when a bank goes belly up, your FD may be in trouble - clear and transparent. Some may or may not know that there is a 20,000 insurance guarantee (which is not fully guaranteed by the Govt).

    Quote Originally Posted by pisduck View Post
    actually,

    fixed deposits also got risk what.

    I think the current mini bonds issue is really blown out of proportion. I mean if I put my money in DBS fixed deposit and DBS goes belly up like Lehman, can I demand all my money back???

    Lehman is a BIG bank in America and the risk of them collapsing is really low 2 years back.

  15. #15
    Member Papilio's Avatar
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    Default Re: Investment or fixed deposit?

    Quote Originally Posted by vince123123 View Post
    For a fixed deposit, everyone knows that when a bank goes belly up, your FD may be in trouble - clear and transparent. Some may or may not know that there is a 20,000 insurance guarantee (which is not fully guaranteed by the Govt).
    I thought the recent announcements by MAS lifted that $20k cap (at least till end of 2010)?

    The government will "guarantee all Singapore dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the MAS," the Monetary Authority of Singapore (MAS) and the finance ministry said in a joint statement.

    AFP News on 17 Oct

  16. #16
    vince123123
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    Default Re: Investment or fixed deposit?

    Sorry, the word "not" in my earlier post is intended to have read "now".

  17. #17

    Default Re: Investment or fixed deposit?

    Quote Originally Posted by pisduck View Post
    actually,

    fixed deposits also got risk what.

    I think the current mini bonds issue is really blown out of proportion. I mean if I put my money in DBS fixed deposit and DBS goes belly up like Lehman, can I demand all my money back???

    Lehman is a BIG bank in America and the risk of them collapsing is really low 2 years back.
    The problem with the Lehman case is that many people assume that these investors are demanding money back now that they have made a bad choice.

    I think the issue is not so much about investing rather it is about misrepresentation.

    I have heard reliable stories of how young financial planners are earning bonuses of 20 to 40k per month and they are not the top earners. Banks that tell their planners to aggressively sell. To earn these bonuses, it is aggressive selling and targeting cash cows like retirees. Think they really want to "plan" your future and "walk" with you all the way? No it's just to get you to sign on the dotted line and they get their commission. It's purely business.

    Also how any big time transactions automatically gets you a visit from a planner at the bank who die die tries to get you to invest in some product. Citing how you are so stupid to not invest.

    For these retirees, they are seen as golden gooses, tons of money and no where to spend it and easy to persuade.

    I am sure there are ethical planners but there are also many unethical ones. Personally Im sure many people are already burned by these planners but just that their investments are still safe hence they are not affected. However for Lehman, no one expected it to collapse and Im sure no one realized how dangerous the terms and conditions were. Like 1 of the 8 banks in the list collapses, the fund turns belly up. Many were told..... there are 8 banks so why worry. One collapse still have 7 banks.... that is gross misrepresentation.

    The question is whether these retirees really knew where their money were going and did the planner really tell them the whole truth.
    Last edited by aeskywan; 29th October 2008 at 05:09 PM.

  18. #18

    Default Re: Investment or fixed deposit?

    I was very disappointed when I approach an officer from a local bank regarding a insurance that I had purcahased. She told me that they are only the agent and if I need to know anything, I had to call the insurance company.

    What the hell is going on. They took the commission and expected me to run my own show. I told them point blank, that they earned the commission and they cannot serve me. They ended up calling the company and me talking to the company.

    What type of service is this.

    This is DBS Bank.

  19. #19

    Default Re: Investment or fixed deposit?

    those bank ppl hv quotas to meet or their bank employers will show them the exit..so in order to protect their
    own jobs, u still think they give a damn on the consequences ?
    Last edited by Jo_L; 30th October 2008 at 02:23 PM.

  20. #20

    Default Re: Investment or fixed deposit?

    Quote Originally Posted by aeskywan View Post
    The problem with the Lehman case is that many people assume that these investors are demanding money back now that they have made a bad choice.

    I think the issue is not so much about investing rather it is about misrepresentation.

    I have heard reliable stories of how young financial planners are earning bonuses of 20 to 40k per month and they are not the top earners. Banks that tell their planners to aggressively sell. To earn these bonuses, it is aggressive selling and targeting cash cows like retirees. Think they really want to "plan" your future and "walk" with you all the way? No it's just to get you to sign on the dotted line and they get their commission. It's purely business.

    Also how any big time transactions automatically gets you a visit from a planner at the bank who die die tries to get you to invest in some product. Citing how you are so stupid to not invest.

    For these retirees, they are seen as golden gooses, tons of money and no where to spend it and easy to persuade.

    I am sure there are ethical planners but there are also many unethical ones. Personally Im sure many people are already burned by these planners but just that their investments are still safe hence they are not affected. However for Lehman, no one expected it to collapse and Im sure no one realized how dangerous the terms and conditions were. Like 1 of the 8 banks in the list collapses, the fund turns belly up. Many were told..... there are 8 banks so why worry. One collapse still have 7 banks.... that is gross misrepresentation.

    The question is whether these retirees really knew where their money were going and did the planner really tell them the whole truth.
    For those who have limited education or are risk adverse retirees, there are a higher chance of misrepresentation.

    For those who are educated and are profiled of a higher risk appetite, things become more murky. They may be informed about the risk underlying the assets they are purchasing and they go in with eyes opened. But at that point of time who would think that Lehman or any top 5 investment banks would go burst?

    Another problem may be the complexity of such structured products. Blame it on the financial engineers who designed them.

    Another problem is also the misalignment of incentive for the financial planners/relationship managers selling such products.

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