Wednesday 8th Feb 2012 03:13 PM
What do you think of MAS new ban on firms in using terms like 'capital protected', 'principal protected' ?
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Fri, 09/11/2009 - 15:37
Cast Your Vote:
Capital protection is one of the most common terms you hear when people talk about investment products. What are the implications of MAS banning these terms? Why did MAS do it in the first place? Share your views here!
Elly
1) It would be good if the bank can first grade their new products according to ratings, e.g. AAA, AA, A, BBB, BB, B, CCC, CC, C, etc. before putting it up to consumers.
2) High risk command high commission, so naturally they would push these products first.
3) Banks should know better whether their product belong to high or low risks.
4) It's not fair to just anyhow 'grab' a bank customer who has no financial knowledge, to buy their products with just a brief introduction.
5) I was almost a victim of the mini-bond series but never was because I felt uneasy about the word 'mini'. I have bought SGS bonds before. The word 'bond' sounded familiar. Well, I have heard of mini tarts, but what on earth is this 'mini bonds' all about.
6) I could never understand why bank tellers are allowed to sell their products this way.
7) Anyway, MAS acted too late.
It will not be in the interest of the bank to tell you how risky the product is. What upsets customers more is that the potential benefit of 5-9% is not worth the risk of losing half or all of your money.
To be fair, no one could have pre-empted everything. MAS couldn't fortune tell either. But banks that can afford to play fairer to consumers, should do so and not hold on to their cards.
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Hindsight is always 20/20 - Dilbert