Family with kids approached for unit trust investment.

As people are losing their jobs amid Covid-19 pandemic, many have sought for income alternatives by selling variety of items that they can make a living from. 

photo courtesy: Westfield Financial Planning

For time being, I am lucky to still have my job despite the industry is not really doing very well. With the Movement Control Order, which required almost everyone to stay home and commitment in terms of childcare fare, fuel and eating out expenses cut down, I really can afford to spend some money to support friends who need to make living out of selling homemade cooking and etc.

However, I am not so keen to be approached/forced to invest my money into unit trust via an agent/consultant. 

During the product introduction briefing, I was told that unit trust could earn a return of between 5-10 per cent. But, when I check on the previous reports, it may not seem to be true for all time. The units could drop to below 10 per cent, which means that unit trust holders would likely to lose money, which means there is no transparency during the briefing. 

Cost in investment is also crucial, every sen is counted. The charges fee for every transaction is between 3 and 4.5 per cent via cash/ through EPF system, it is between 1 and 1.5 per cent. Guess what, if one does the transaction via EPF's i-invest system, there is no cost AT ALL. 

Again, there is no transparency on the zero cost fee. 

Of course, those agents deserve some commission from assisting clients to invest their money. But, if one wants to earn the other person's money, they should be doing their work well, too. 

In my case, we were quite frustrated when the agent could not provide us the information of why we should invest our money via Public Mutual, when the government body EPF is also doing the same thing? 

EPF has recorded stable dividend returns between 4.5% and  6.9%  from 2008 until 2019. 

Another things that upset us was the agent was in rush getting us to invest our money without cooling off period. Can you imagine the moment the briefing finish, the agent asked us for our identity cards and other documents. What if it is being done to those without financial knowledge to sign up immediately, believing that their money will DEFINITELY bring in good returns? 

Every investment has its own risks. Using your retirement savings is already a risk. 

In case of the agent is a friend or relative, that might cause the relationship if something happened to the client's savings. 

I find that people with kids are often fall into prey thinking that they should invest in unit trust for their children's education. 

Do not get me wrong, some really can make money out of unit trusts with the investments being put in the right funds. I attached KC LAU further explanation link here for you to learn better. 

Solution? 

But I still have to be thankful for the 2-hour time spent with the agent as I do learn something from it.

Firstly, I realise that as a Bumiputera, I am entitled to a fixed rate Amanah Saham Bumiputera which promises a return of at least 4 per cent dividends. Before going into a risky investment, as a very conservative woman, I shall max out the 200,000 units for the ASB which I have yet to achieve. 

For the record, ASB used to hit 11.50 dividend, too. 

And there is another fund for me to max out which is the ASB2 and my daughter's ASB and ASB2. 

The focus should be maximing each account before taking other steps for other risky moves.