15 key questions to ask the adviser before you say ‘yes’ to buying a product
November 27th, 2008 by ALVIN SOONG
Here are the 15 questions:
1 Why do you say this product is suitable for me?
2 What type of product is this? For example, is it a life insurance policy, unit trust or structured deposit? Is it primarily for savings, investment or insurance protection?
3 What benefits does it offer? Which ones are guaranteed and which are not?
4 What instruments does the product invest in?
How risky are these underlying instruments?
5 Is this product suitable for individuals with low, medium or high risk tolerance levels?
6 What is my risk profile? Even if it fits my profile, can I afford to take the risk and do I need to?
7 How much do I need to commit to this product? Do I make a one-time payment or regular payments? What happens if I subsequently find that I am unable to make the payment?
8 How long must I stay invested? What are the penalties, restrictions and procedures if I liquidate some or all of my investments earlier?
9 What are the various fees and charges? Does the product provider have the discretion to change the fees and charges at any time or is there a cap?
10 If the adviser recommends investing with Central Provident Fund (CPF) money, ask him how the returns offered by the product compare with interest rates earned by money in the different CPF accounts.
11 What alternative products offer similar benefits? How does the recommended product compare with alternative products?
12 If I were to buy the recommended product, how can I monitor the performance of my investment? What reports and updates will I get? And what is the frequency of these reports?
13 What if I find, after my purchase, that the investment product is unsuitable? Can I return the product and get my money back?
If so, how soon must I inform the adviser of my decision to return the product? Are there any fees and charges?
14 Do you offer products from one or several companies? (This can be an indication that the adviser’s product range might be limited. Also, you can suss out if he is subjective in his product recommendation.)
15 Is the financial firm that you represent and is the product provider for the recommended product regulated by the MAS? What are the names, business addresses and permitted activities of the firm and the product provider?
Source: MoneySENSE, a financial education programme run by the MAS
