Advisers at devere Kuala Lumpur offices are actively bullied in to giving their clients disastrous advice with the only view being optimizing commissions. Country manager Terry Howes and Tariq Mizra do not recommend any clients nor colleague advisers to place single premium lump-sum investments in to viable portfolio bonds. Instead the clients are fooled in to splitting the lump-sum single premium in to high monthly regular savings premiums with maximum length maturity periods (25years). As is the case in over 95% of these plans, the client circumstances change and either stop contributing or substantially lower the monthly contributions.
“Positive” Scenario: Client is advised to split a £400,000 lump-sum investment in to £15,000 monthly contributions over 25 years with Generali and told that the monthly contributions can be lowered after the 25.6 month initial period due to fictitious bonuses. The initial period determines the total cost of the plan ie total client cost is £384,000. After the client lowers the monthly contributions after 25.6months to £4,000 and continues paying until the 25 year maturity total contributions equal £1,481,600. The total cost of plan for client is 26% and the “adviser” received £86,400 in commission. [300mnths (25y X12mnths) X £15,000 = £4,500,000 X 1.92%]
Negative Scenario 1: Client stops contributing before 25.6months and receives £0.
Negative Scenario 2: Client contributes £15,000 for 25.6months and then stops contributing. The total cost = contributions are £384,000. Over 25 years this means an annual 4.9% deduction of capital growth ie the growth has to be minimum 4.9%pa to receive any return. When adding a 3% annual inflation over 25 years it most probable that the client receives £0.