Inappropriate Advice (1)

I learnt 2 sales tips from experienced and so called "MDRT" advisers. I'm sorry to say that these are inappropriate advices. I hope consumers will wake up their ideas!!! I'm disappointed when I learnt that such advices were given out by them.

1st one from Prudential

Step 1:
Convince them how good our China-India Fund is. Average returns 20%. Its rising, don't miss the boat. China is booming with 1 billion people.
Step 2:
Invest $50k into the fund. Presuming average returns only 5% p.a, you will make $2,500/yr. If 10%, your returns will be $5,000/yr. If 20% repeats this year, it will be $10,000.
Step 3:
Your profit is more than enough to buy into our Regular Premium Prulink Assurance plan with premium of $2,500/yr with a high coverage. If your returns is $10,000, you would already pay off 4 yrs of your premium.
Step 4:
Convince your customer that they will have a free policy(Prulink) when they invest their lumpsum of money in our funds.

Why Inappropriate advice?
1) China-India fund, being emerging markets are highly volatile. It returns 20%, it can drop 20% also. Many advisers avoid telling about risk but focus on returns only.
2) We advice people to invest, not "Speculate" or "Gamble" all our money like this. We should diversify properly after understanding investors profile and rebalance regularly.
3) Yes. The profit can be withdrawn for personal use. But why go and sign up that Prulink assurance and give that adviser another policy to make big commission.
4) The high cover in the Prulink assurance comes with a cost, esp when they reach 50 yrs and above. It is not a 2-in-1 policy. Go and buy a term policy instead if you wants cover.

I'll write about the 2nd inappropriate advice few days later.