Recently Manulife launch the industry's first investment linked annuity plan. I heard that one bank is selling this like hot cakes. But the poor consumer doesn't know one problem about this plan. There are three portfolio to choose namely SRP Aggressive Portfolio, SRP Growth Portfolio and SRP Balanced Portfolio. The "best" part of these funds is the ridiciulous expense ratio. The management fee of these funds are 1.95%pa, 1.65%pa and 1.55%pa respectively. On top of this is an account management fee of 1.70%pa (currently but can go up to 3%pa) regardless of the portfolio chosen. This means that the total expense ratio is 3.65%pa, 3.35%pa and 3.25%pa respectively! My goodness, this ILP is soooo expensive. Truely amazing how they can come up with such product! I pity these consumers, they don't know what they are buying.
BTW, I just checked the LIA/IMAS database. There are only 5 Unit trusts in Singapore that have expense ratio above 3.65%pa. There are no ILPs whose funds are above 3.65%pa in annual expense. Looks to me that Manulife just broke the record!
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