One would think that after the Lehman Brothers Mini-bonds incident, things would have changed on the banking floors here. However, if my sister's experience yesterday at a reputable local bank was anything to go by, not much has changed on the ground.
I see dark clouds again. |
She went to the bank to deposit my niece's savings in a fixed deposit but was approached by a male banker who tried to convince her to put the money in a "bond" which would supposedly give her a 5% return instead.
He told her that there was no lock in period and that the 5% return was better than the 1% which the one year fixed deposit would pay in interest...
Waiting for more information? You would be disappointed. Now, how many aunties and uncles would have taken up the offer right there and then?
Well, my sister asked questions! Good on her!
Bonds? Who am I lending money to?
Answer: XXX (name of the bank she was at) lah.
Is this some kind of unit trust?
Answer: No, no. You are lending money to XXX.
What is the catch?
Answer: The catch is you get 5% per annum lor.
There are no fees?
Answer: You can sell anytime. There are no fees when you sell.
What about fees when I buy?
Answer: There is a 3% fee.
So, before I make any money, I would have lost 3%?
Answer: But you will get 5% per annum.
XXXX offered me a product too. Capital is guaranteed. What about this?
Answer: This won't lose money one. See? I show you the chart. The value keeps going up.
So, nothing is guaranteed?
Answer: The projected returns is very good. See the chart?
HOCUS POCUS! POOF!
If I had been there, the "banker" would have been blasted by me big time! I would have asked to see his branch manager. I would have suggested that this person be sent for corrective training. Indeed, how are these "bankers" trained?
Misrepresentations aplenty!
I get very agitated when I hear of such incidents. Why do people resort to such trickery to close deals? Why can't they be honest?
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2. Inflation adjusted retirement income plan.