UK Traded Endowment

[danielcheng]

Maybe James is not angry, maybe he is seeking clarification and advice.

Anyways, James, can you recall why did you invest into UK TEP back then? Is 90% downside protection your main objective? If not, it must be the shorter investment timeframe, higher interest return and chance of currency exchange gain, emotional belief? BUT, for any investment with higher perceived returns, there will be higher associated risk.

Imagine, if you opened a 3-5yr fixed deposit acct with one of the local banks, you should have 100% capital protection, no exchange risk, free signup gifts like abalone or watches, gauranteed interest tho' quite miserable. the only thing we are quite sure is that inflation should be higher than the interest earned in this case. Will you feel any difference now if you had opened the FD earlier? Can you call the bank to show your unhappiness, a bit tough too.

So, just remember, as plain as it sounds, all these are just but a business transaction to the business,
every products has it's pros & cons, shoul you decide to put more weightage to the selling point? it is up to the Individual's evaluation and final decision.

[jamestai]

Hi Daniel,

I am not angry with Dennis or TEP PTD at all. I am not sure why Dennis feel or see that way, I guess maybe is the way I write that make him interpret that I am angry.

You are right I am just a customer who is seeking Clarification and advise from Dennis on the concern and worry about my TEP product that I buy through his company, TEP Ptd. I buy TEP because I remember in Dennis seminar, he mention that TEP can give an average of 4 - 6% return with a guarantee 90% cash value protection by the UK government should the Insurance company go bankrupt. For my TEP product the projected return of investment is 5.45%. And My policy mature date is 1 Nov 2015.

Putting aside the exchange risk and Prudential UK go bankrupt, just base purely on the Sterlin Pound (GBP) amount that I invested into the policy, this is the breakdown.

1) My invested amount is GBP 9281.50
2) Surrender cash value as on 1 Apr 2012 is GBP 8157.10
3) Projected Full Maturity Value of my policy is GBP 12288.00
4) The only Interest bonus statement I have from Prudential UK is in 2009 which I get only GBP 126.58.

Therefore I am not sure from now to 2015, can Prudential UK really give me the Projected Full Maturity Value with 4 yrs ? There is a gap of GBP 4130.90 (12288 - 8157.10).
Base on the data I have so far I might be only getting my invested amount of GBP 9281.50 upon maturity. Which is just break even or even less. Therefore I would like to find out what really is my Terminal Bonus that Prudential UK can really give to me when my policy mature. And how do they come out with a projected investment of 5.45% return for my policy upon maturity ?

Since Dennis say that TEP Ptd limited is only an Agent selling TEP product to us and they have no information on the Terminal Bonus and how the insurance company calculate the projected return for my policy, that is why I am asking Dennis or his staff whether they can help me to find out the info since they are the only company in Singapore to Sell TEP product. If not just like what Dennis advise me that I will need to contact Prudential UK myself by sending an oversea letter to them to ask them for the information.

James Tai

Maybe James is not angry, maybe he is seeking clarification and advice.

Anyways, James, can you recall why did you invest into UK TEP back then? Is 90% downside protection your main objective? If not, it must be the shorter investment timeframe, higher interest return and chance of currency exchange gain, emotional belief? BUT, for any investment with higher perceived returns, there will be higher associated risk.

Imagine, if you opened a 3-5yr fixed deposit acct with one of the local banks, you should have 100% capital protection, no exchange risk, free signup gifts like abalone or watches, gauranteed interest tho' quite miserable. the only thing we are quite sure is that inflation should be higher than the interest earned in this case. Will you feel any difference now if you had opened the FD earlier? Can you call the bank to show your unhappiness, a bit tough too.

So, just remember, as plain as it sounds, all these are just but a business transaction to the business,
every products has it's pros & cons, shoul you decide to put more weightage to the selling point? it is up to the Individual's evaluation and final decision.

[danielcheng]

Hi James,

Good to hear that. I can emphatise with you. 1st the red wine, now this concern. Fortunately, you are quite good with stocks. Overall, hope you've made some money in this 2-3 years of your investment journey.

On the bright side, the experience you've gained and friends you've made cannot be taken away from you. I believe you are a keen learner & avid investor. So the concerns on hand will be resolved ultimately.

Learn to let go, learn to give and take & you will be the final winner in whatever you do. That's why its is call "Give & Take", not "Take & Give".

Cheers!
Daniel

[Dennis Ng]

Hi Daniel,


Since Dennis say that TEP Ptd limited is only an Agent selling TEP product to us and they have no information on the Terminal Bonus and how the insurance company calculate the projected return for my policy, that is why I am asking Dennis or his staff whether they can help me to find out the info since they are the only company in Singapore to Sell TEP product. If not just like what Dennis advise me that I will need to contact Prudential UK myself by sending an oversea letter to them to ask them for the information.

James Tai

Hi james,

I have twice mentioned that if you want, we can help you ask Prudential on whatever questions you have.

[jamestai]

Hi Dennis,

Noted, thanks. I have send the following email to your staff, Joan.

On Sun, May 13, 2012 at 11:58 PM, James Tai <jamestai777@gmail.com> wrote:

Hi Joan,

Dennis has mention in the forum that you can help me to get the info from Prudential UK. I appreciate that you can do that for me as soon as possible.

I need the following info:

1) Annual Bonus statement for year 2010 and 2011.
2) What is the terminal bonus that the company is giving out this year ?
3) How did company project that they able to give me a projected return of 5.45% return on my policy ?

Regards,

James Tai

Hi james,

I have twice mentioned that if you want, we can help you ask Prudential on whatever questions you have.

[Dennis Ng]

Hi Jamestai,

sure. We will help write in to Prudential and once Prudential reply, we would forward the reply to you.

It's NOT projected returns, it is Known as Formula Maturity Value, as mentioned, the calculation is done by estimating Maturity Value of policies based on the maturity value of policies matured in the year of purchase of the UK Traded Endowment policies.

Actual Maturity Value can be lower, same or higher than Formula Maturity Value.

Cheers!

Dennis Ng

Hi Dennis,

Noted, thanks. I have send the following email to your staff, Joan.

On Sun, May 13, 2012 at 11:58 PM, James Tai <jamestai777@gmail.com> wrote:

Hi Joan,

Dennis has mention in the forum that you can help me to get the info from Prudential UK. I appreciate that you can do that for me as soon as possible.

I need the following info:

1) Annual Bonus statement for year 2010 and 2011.
2) What is the terminal bonus that the company is giving out this year ?
3) How did company project that they able to give me a projected return of 5.45% return on my policy ?

Regards,

James Tai

Hi james,

I have twice mentioned that if you want, we can help you ask Prudential on whatever questions you have.

[Dennis Ng]

Last week, there has been a shift of money from Risk Assets (Stocks, Commodities, Oil) all fell, and shift to Safe Haven, such as US$ government bonds, Germand bonds and also UK Bonds...as the yields of theirs bonds went down (means bond price went up).

Latest news also reported there is a shift of money from other European countries (banks) into UK Banking sector as well.

Another sign is Euro went down against S$ but Sterling pounds actually strengthened over the last week.

Cheers!

Dennis Ng

More than 120 billion euros was taken from two banks in Belgium alone, including an exodus of customer deposits from Dexia (DEXI.BR) which had to be bailed out and restructured. KBC (KBC.BR) also saw a big outflow.

Some 90 billion euros was taken from France's banks, including around 30 billion each from Credit Agricole (CAGR.PA) and BNP Paribas (BNPP.PA). French banks were hit last year by their heavy exposure to Greece and concerns about their liquidity that forced them to accelerate plans to shrink.

Worries the euro zone crisis would spread also saw about 30 billion euros in deposits leave Italian banks, although inflows to BBVA (BBVA.MC) helped limit the net outflow from Spain.

Cash flooded into Britain; more than 140 billion euros was deposited in four big banks alone. The UK benefits from its position outside the euro zone and its Asia-focused banks HSBC (HSBA.L) and Standard Chartered (STAN.L) are seen as particular safe-havens.

[jamestai]

Hi Dennis,

I just receive another letter from Prudential UK which I believe your staff has request them to send to me. This is the main content:

Sum assured as at 21 March 2011 to which bonuses are added GBP 5850.00
Plus Previous bonuses GBP 2344.85
Plus your 2010 bonuese GBP 128.83
Sum Assured and guaranteed bonus so far GBP 8382.68
The amount that we will pay, including any final bonus, on death before 1 April 2012 GBP 10429.68
However this policy gurantees that the amount we will pay on death before the policy matures will be at least GBP 13000
Date Endowment plan matures 01/11/2015
The FINAL BONUS is not guaranteed and the sum shown maybe more or less than in other years.

The question here is I still don't see how they going to give me the Formula Maturity Value Return of 5.45% ? Is not even close. And how did they come out with that kind of return ?

I am sure you and your staff should know more about how all this work and in your seminar you keep telling us that TEP can generally give us 4 - 8% return. How did you derive that ?

James Tai

Hi Jamestai,

sure. We will help write in to Prudential and once Prudential reply, we would forward the reply to you.

It's NOT projected returns, it is Known as Formula Maturity Value, as mentioned, the calculation is done by estimating Maturity Value of policies based on the maturity value of policies matured in the year of purchase of the UK Traded Endowment policies.

Actual Maturity Value can be lower, same or higher than Formula Maturity Value.

Cheers!

Dennis Ng

Hi Dennis,

Noted, thanks. I have send the following email to your staff, Joan.

On Sun, May 13, 2012 at 11:58 PM, James Tai <jamestai777@gmail.com> wrote:

Hi Joan,

Dennis has mention in the forum that you can help me to get the info from Prudential UK. I appreciate that you can do that for me as soon as possible.

I need the following info:

1) Annual Bonus statement for year 2010 and 2011.
2) What is the terminal bonus that the company is giving out this year ?
3) How did company project that they able to give me a projected return of 5.45% return on my policy ?

Regards,

James Tai

Hi james,

I have twice mentioned that if you want, we can help you ask Prudential on whatever questions you have.

[Dennis Ng]

Hi Jamestai,

I have explained to you several times before this and I will explain again, we are NOT Prudential and TEP Pte Ltd is in no position to answer any questions you have where only Prudential has the answers.

If you have further questions and queries, if you want, we can help you send letter to Prudential to ask again.

The right avenue to ask personal questions on your personal investments is email to info@tradedendowment.com or call us at 6883 2235., and i think this is also not the first time I shared with you this. This discussion forum is not the right avenue. We have over 3,000 Housing Loan clients and this forum will be cluttered with customers' enquiries if they all choose to ask us questions on their personal Housing Loans here. We have nothing to hide though.

Returns of 4% to 8% is based on the what UK Insurers have been delivering on their maturity values in the last few years. This information is obtained by us (but not we generate the numbers) and can be easily verified by anyone. Of course, past performance does NOT guarantee future returns. And we have explained very clearly in all our communications with clients and even in seminars that the only Guaranteed Value is the Cash Value of the policy, the maturity value is not guaranteed.

No one can know for certain what the future may entail or look like. For instance, who would have imagine that SWAP rate in Singapore can be zero last year and Germany 2 year government bond can be Zero Interest (just happened yesterday)?

Please take note that up till now Prudential has also NOT stated in any way that they are NOT in a position to deliver the maturity value, but if you want them to guarantee the numbers, they will not and cannot do so as explained why already.

I always teach and remind many times that Real Investors are always prepared for the possibility of losing money and in fact if they apply the rule of only investing when upside is at least double downside, they can lose money on 6 out of 10 investments and still get Richer. Guess despite you being an Investing Mentor, you are still not familiar with this concept I share. This may actually mean I'm not suitable to teach since it seems like I cannot get my students to grasp what I teach after 3 years of teaching. If this is really the case I think I should consider to stop teaching and let others who are better at teaching teach instead of wasting the time of my students.

Cheers!

Dennis Ng

Hi Dennis,

I just receive another letter from Prudential UK which I believe your staff has request them to send to me. This is the main content:

Sum assured as at 21 March 2011 to which bonuses are added GBP 5850.00
Plus Previous bonuses GBP 2344.85
Plus your 2010 bonuese GBP 128.83
Sum Assured and guaranteed bonus so far GBP 8382.68
The amount that we will pay, including any final bonus, on death before 1 April 2012 GBP 10429.68
However this policy gurantees that the amount we will pay on death before the policy matures will be at least GBP 13000
Date Endowment plan matures 01/11/2015
The FINAL BONUS is not guaranteed and the sum shown maybe more or less than in other years.

The question here is I still don't see how they going to give me the Formula Maturity Value Return of 5.45% ? Is not even close. And how did they come out with that kind of return ?

I am sure you and your staff should know more about how all this work and in your seminar you keep telling us that TEP can generally give us 4 - 8% return. How did you derive that ?

James Tai

[ngtfook]

Hi Ms Tan,

Appreciate if you could share with us how do you derive "upsides 7X more than downsides"
Thanks.

by Ms Tan » Mon Nov 28, 2011 8:10 pm

Thank you Dennis for introducing UK Traded Endowment Policy. This has given us an opportunity to invest in Pounds with good ROI and 90% capital guarrantee.

I have decided to go for 2 TEPs with Upsides 7x more than downsides. However, I couldn't decide on the payment for the rest of the annual premiums to maturity for 8+ years term policies.

Is it better to pay the solicitor upfront for total 8 years annual premium to administer the yearly premium to the life company (without 3% discount and forgo opportunity cost on this lump sum) OR do my own remittance every year and subject to currency fluctuation?

Any prompt advice or sharing of your experience is much appreciated.

Best Regards,
Eileen

[Ms Tan]

Hi Ray,

Wow, you are asking me something happened half a year ago ... Let me try to recall, i think I estimated the downside based on 90% capital protection and upsides based on return projection when 2 of my policies are matured. My return projection% are quite high with longer investment period.

You can call TEP for details, they will propose list of "balance" policies for you to consider, based on your investment budget and requirement and what are available in the current market.

Hi Ms Tan,

Appreciate if you could share with us how do you derive "upsides 7X more than downsides"
Thanks.

by Ms Tan » Mon Nov 28, 2011 8:10 pm

Thank you Dennis for introducing UK Traded Endowment Policy. This has given us an opportunity to invest in Pounds with good ROI and 90% capital guarrantee.

I have decided to go for 2 TEPs with Upsides 7x more than downsides. However, I couldn't decide on the payment for the rest of the annual premiums to maturity for 8+ years term policies.

Is it better to pay the solicitor upfront for total 8 years annual premium to administer the yearly premium to the life company (without 3% discount and forgo opportunity cost on this lump sum) OR do my own remittance every year and subject to currency fluctuation?

Any prompt advice or sharing of your experience is much appreciated.

Best Regards,
Eileen

[Ms Tan]

Just for sharing purpose ... my forecasted ROI (based on current bonus rates declared by the insurance company) is 74% or 9% annual rate of return over average term of 8.23 years.

We are aware that actual maturity value may not be the same as the forecast is based on current bonus rate declared by the insurance company. However, with upsides more than double of downside, and we want to have investment diversification, we are comfortable to put less than 3% of our investment fund for longer term policies.

Do note that different timing, different requirement will have different policy proposals as these are buying over policies from the secondary market when their UK properties were sold. I'm just sharing what I have invested, for more details, pls contact TEP. Thank you.

Hi Ray,

Wow, you are asking me something happened half a year ago ... Let me try to recall, i think I estimated the downside based on 90% capital protection and upsides based on return projection when 2 of my policies are matured. My return projection% are quite high with longer investment period.

You can call TEP for details, they will propose list of "balance" policies for you to consider, based on your investment budget and requirement and what are available in the current market.

Hi Ms Tan,

Appreciate if you could share with us how do you derive "upsides 7X more than downsides"
Thanks.

by Ms Tan » Mon Nov 28, 2011 8:10 pm

Thank you Dennis for introducing UK Traded Endowment Policy. This has given us an opportunity to invest in Pounds with good ROI and 90% capital guarrantee.

I have decided to go for 2 TEPs with Upsides 7x more than downsides. However, I couldn't decide on the payment for the rest of the annual premiums to maturity for 8+ years term policies.

Is it better to pay the solicitor upfront for total 8 years annual premium to administer the yearly premium to the life company (without 3% discount and forgo opportunity cost on this lump sum) OR do my own remittance every year and subject to currency fluctuation?

Any prompt advice or sharing of your experience is much appreciated.

Best Regards,
Eileen

[jamestai]

Hi Ms Tan,
Thank you for sharing you view. Still there are so many unanswer questions and grey area on this TEP product which we should seriously ask and find out.

1) How can we be so sure that TEP upside is more than the downside ? When neither the Insurance company and TEP Pte Ltd cannot even tell us how the Formula Maturity Value is being calculated ?

2) Did we personally know anybody that really show you their true return on TEP ? Did any of the insurance company we know publish the record of what the true return they give back to their customer when the TEP policy mature ?

This is what I know about TEP so far.

1) Average 4-8% annual return of TEP that we keep hearing, may not be true. The only thing that is certain so far is 90% of your Gurantee mature value is protected by the UK government if the UK insurer go bankrupt.

2) There is risk in TEP as any other investment options, one could make a loss. You have no control how the UK insurer invest your money and they don't guarantee you anything.

3) TEP Pte Ltd is only an agent for UK insurers who is the TEP providers. TEP Pte Ltd only provide the information that the UK insurers provided. Therefore, TEP Pte Ltd will not be responsible for any information that is not true.

4) Before you decide to buy TEP, you should ask for their past Annual bonus that the UK insurer has been given out. Then do some homework to see if they really can give you the ROI they show you.

I Agree with Dennis that investment comes with risk, 6/10 can be wrong, and that's is more why we should know about the risks involved in TEP to avoid making wrong investment decision. TEP can be used as diversification of portfolio, but remember the return are not guarantee so don't blindly trust the ROI they tell you on the policy when anybody try to sell to you. The information of the TEP I invested which I share here with all of you are true. And I already accepted the fact there is high chances I will lose money on this product. My intentions to share all this with all of you here are, I hope to find the answer of the questions I have on TEP and I wanted anybody who consider to invest in TEP don't make the same mistake I have make. I think you guys are much wiser than me when come to investing your money .

James Tai

[Dennis Ng]

Hi Ms Tan,
Thank you for sharing you view. Still there are so many unanswer questions and grey area on this TEP product which we should seriously ask and find out.

1) How can we be so sure that TEP upside is more than the downside ? When neither the Insurance company and TEP Pte Ltd cannot even tell us how the Formula Maturity Value is being calculated ?

James Tai

Hi James,
so far, I think all questions raised by you I have answered them.

Guess you do NOT even bother to read my reply to your earlier questions. Here I copy and paste for your easy reference:

Hi James,


2. it's called Formula Maturity Value (FMV) which is based on the latest bonus rates declared by UK insurer in the year the Traded Endowment policy was purchased. The actual maturity value may be higher or lower than this FMV, actual Maturity Value depends on future performance and declaration of bonus by the UK Insurer (which can be min 5 years to maturity, or ahead into the future).

The above is clearly explained by our staff and also investors sign off acknowledging they have been informed about this in an Investor Declaration Form. The value is provided by UK Brokers based on the formula as stated (therefore it's called Formula Maturity Value). TEP Pte Ltd does NOT in anyway involve in calculating the FMV, we merely pass on the information.

The Cash Value of a policy is guaranteed Minimum Maturity Value (ie. maturity value can only be same or higher than Cash Value of a policy, which is adjusted upwards when additional bonus are declared). Cash value is guaranteed. In event of collapse of UK Insurer, 90% of the Cash Value is guaranteed by UK Financial Services Compensation Scheme, which was initiated by the UK government and authorities. Maturity Value of endowment policies are NOT guaranteed, not in UK, neither is it guaranteed in Singapore. (a widely known fact).

TEP Pte Ltd is like a property agent in the resale Property market. When you invest into a Traded Endowment Policy, it's similar to you buying a property from resale market instead of direct from the developer (UK Insurer). Your counter party is the UK insurer, we just help to facilitate in your purchase of the property (Traded Endowment Policy).

Your investment is NOT with TEP Pte Ltd, but invest through TEP Pte Ltd, your counter party is the UK Insurer, ie. you invested with the UK Insurer.

Only the developer (UK Insurer) determines the final product (Actual Maturity Value).

UK Traded Endowment is a highly regulated product in UK with close to 40 years history and as mentioned the 90% of the Cash Value of an endowment policy is even guaranteed by the UK Financial Services Compensation Scheme.

3. Each insurer determines terminal bonus rates themselves, there is NO fix rule, similar to in Singapore, depending on the insurer's performance, economic conditions etc, etc.

4. There are clients that get back maturity value even higher than FMV, some get lower.

I hope the above clarifies. If you have any specific questions on your investments, you can call TEP Pte Ltd at 6883 2235 or email us at info@tradedendowment.com providing your name and mobile number so that I can get one of my staff to assist.

[Dennis Ng]

Hi Ms Tan,

2) Did we personally know anybody that really show you their true return on TEP ? Did any of the insurance company we know publish the record of what the true return they give back to their customer when the TEP policy mature ?

This is what I know about TEP so far.

1) Average 4-8% annual return of TEP that we keep hearing, may not be true.

James Tai

Hi James,
the returns of a TEP is very much similar to the returns of a Endowment policy that matures.

Average Maturity Value of Endowment policies and average returns of 4% to 8% are what the UK Insurers have been delivering in the last few years on policies matured.

As I said, this information can be found on UK Insurers' websites and can be verified by anyone. These numbers are NOT generated by TEP Pte Ltd (looks like I'm forced to repeat this again as it is obvious that you don't really bother to read my replies to you, NOT sure why though?).

As I said, if you have further questions/queries on your Endowment Policy with Prudential, we (TEP Pte Ltd) can (as a customer service not a contractual obligation) help you to check with Prudential. We have been assisting you all this while and I've been patiently repeating certain information to you again and again, in your postings in this forum, on information that were already provided or make known to ALL investors before they invest into UK Traded Endowment.

What can I do to make you happy? I really don't know.