The Hidden Value of Investment Linked Plans

In an old post, I shared about how ILPs are the seemingly hated product due to its high fees and a perception that agents push this product merely for the commissions.

But the truth – in the hands of experienced agents who are well-versed in investments – ILPs actually provide a ability to access funds that are not available to the average investor.

Below is an existing ILP screenshot for one of my clients:

For this particular ILP, the client allocated 30% of her funds into Pictet – Security (USD). Over the past 2 years, the investment has grown from an initial investment of $36,000 to over $82,000.

What is interesting about Pictet – Security (USD) – it is only available to accredited and institutional investors.

This means to invest in such funds – you will need to be an accredited investor. The Monetary Authority of Singapore (MAS) defines an accredited investor as a person who has net personal assets in excess of S$2 million (not including his or her home).

Otherwise, a person can also be defined as an accredited investor if his or her income was in excess of $30oK in the last 12 months.

Accredited Investor Status

The reason for the accredited investor income requirements is because of the potentially risky products an accredited investor is usually exposed to.

However, this is where due diligence and research is necessary before any decision is made to invest.

For myself, I personally monitor the markets regularly with Bloomberg as my go-to resource.

For Pictet-Security, the returns has been 29.4% for the past 1 year – a pretty decent return.

As a rule of thumb, I will only assist clients to get on investment platforms that I will personally buy.

This includes the funds I chosen. I will disclose to my clients the exact funds I bought and explain my reasons as well as the potential risks to them.

They can decide to either follow me by buying the same funds or choose other funds that they might be more comfortable with.

Here I would like to make a disclaimer: As a financial planner with a licence granted by MAS, I am not allowed to make recommendations or advise clients on what funds to buy.

However, I can assist you to be able to get into such platforms – this includes ILPs – that gives you access to funds that are otherwise not available to the general public.

Conclusion

My goal here is to merely remind readers that ILPs are not always the toxic products that it has been painted to be.

For those with the knowledge, it can potentially provide an access to mutual funds that is reserved only for the wealthy.

If you are interested to know more about how ILPs can be an investment vehicle for you  – please feel free to contact me to arrange an appointment.

Disclaimer:

Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable, but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way warrant or guarantee the success of any action you take in reliance on our statements or recommendations.

Past performance is not necessarily indicative of future results. All investments carry risk and all investment decisions of an individual remain the responsibility of that individual. There is no guarantee that systems, indicators, or signals will result in profits or that they will not result in losses. All investors are advised to fully understand all risks associated with any kind of investing they choose to do.

Be updated when a new post is published

Subscribe to our mailing list and get a promo code for $30 off on your financial checkup.

Thank you for subscribing.

Something went wrong.

Leave a Reply