Hi Fellow Automated Millionaires,

Yesterday I was talking to a long lost friend Michael (meaning I haven't talked to him for some time) regarding about Investment stuffs. He mentioned to me that he was so shocked that his P Company Technology fund have lost quite a bit on its principal value and he immediately sold it off. He is particularly skeptical about Unit Trust after that. I guess thats quite natural after encountering such a fund.

Is my friend incident an one-off event? Actually, in the market, there are alot of clients like you and me are facing the same situation with our funds. My mom invested S$6K into a N Company Technology fund and when we did a check, the face value now is S$2K only! Well, if this can be protected by switching the fund from Technology fund to a low risk fund resulting the main bulk of the money will be spare from the drop.

So what is stopping their Advisors to switch the funds for them? In my humble opinion, there is 2 main reasons. 1st - there is no compensation to most Advisors whichever way the Investment goes. Well, one might argued that though there is no money but their reputation is at stake . True but wouldn't the Advisor be more aligned with the client IF there is compensation? :) 2nd - Most of the companies comes with just 1 FREE switch per year. In addition to that, Monetary Authority of Singapore (MAS) implies that any switches that incurred cost on clients is not preferred, as it might make the investment's return negative! Hence, even with that 1 FREE switch, when there is a need to switch back within the same year, it doesn't goes well with MAS as the client have to pay for it. And the returns will be minimize due to the charges incurred for the switch.

Of course, there is no perfect investment platform for clients. Every platform has their weakness but wouldn't it be nice if we have a platform that allow us as clients have unlimited free switches and access to more than 300 funds at one go? :) That is why I support iFAST platform :) Unlimited free switches and my Advisor have access to more than 300 funds to achieve my investment objectives. At the same time, there is a 1% Wrap fee per year given to my Advisor to align her actions with my investment objectives :)

Best Regards,
Max Tay - The Automated Millionaire