We Were ULIPized

Last summer, HSBC Premier were chosen as portfolio managers in our family. After the initial round of their analysis, they took control and started out on the investments. Initially, things went great. They invested in multiple funds (alebit, most of them from the HSBC fund house). Here’s what struck us later.

Summer last year, they got the less informed members of the family to sign up for an expensive ULIP. As far as the policy goes, there’s nothing special about it. The ULIP, ahem, was a startup by Canara and HSBC. Does that ring a bell? They needed people to invest in the startup. The least informed and most trusting members of my family were easy targets. With me not being around there, and the trust levels being at their peak – the HSBC premier guys did just that; breach it.

I was devastated when I learnt about the policy and details this year. More so, when I learnt that it had a 25% allocation value that has gone down the drains. I have always been against any kind of ULIPs. My advice flows out to anyone who start their tax investments on that note. It happened with me, in my own home and I couldn’t do anything. The folly was, we trusted HSBC premier and their agents too much. I’ll update this post if there’s anything that HSBC premier does to reverse this.

Blogger friends have posted my story here (Deepak) and here (Manish).

4 Replies to “We Were ULIPized”

  1. I can understand mate the helplessnes matter, but hope its a lesson learnt hard way. I have already tweeted the warning message. Wish if my better half could also understand the LIC endowment trap!

    Good luck.

  2. It is always blind trust or glamor quotient of the adviser
    dont u wish u were in the us ? u could have sued that firm
    Sadly both irda and courts are no recource … for their own reasons

  3. What is that everyone has against ULIP? I know their allocation charges are high since they insure you. If that insurance coverage value is inadequate (most of the cases this is true), you can purchase a term insurance with a coverage deducting the existing coverage of ULIPs.

    The biggest advantage of ULIP is the online switch option that they provide, which is free for first few switches. When you see that markets are going deep down, switch to debt and when you see its coming up switch back.( I am not telling to do this on a daily basis, but if you read newspaper everyday, anyone would know when to use this features.). Which mutual fund has this feature available?

  4. @Amr: I do not have anything against ULIPs. It’s just that I (and a lot of other people) are not the target audience for ULIPs. You hire fund managers so that they can take care of your investments – and you trust them to take the right decisions.

    Isn’t it a wrong decision on the part of a fund manager to buy a ULIP for you and moreover, never do any kind of fund updates and switching there? How is it not a co-incidence that a new ULIP was introduced and the fund manager blindly sold it to you since they had a target to achieve. That is the topic of this post – and most people are victims of blind faith than anything else. For once, I live in an extremely distasteful environment.

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