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Where would CPF money go if it is nominated to a bankrupt? When Madam Lim Lye Kiang sought to claim the $102,000 from CPF which her late sister had left her, she would never have expected that the CPF Board transferred the money to the OA (Official Assignee) to...

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Why you should not buy IPOs As Sheng Siong is launching its IPO next month, I expected a few calls as whenever an IPO is launching. And if you are my client, you know my answer. I decide to write this article so everybody can benefit...

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Questions to ask your Financial Adviser Every Sunday morning when I flip open the newspapers, I always see articles or advertisements regarding "Financial Advisers". Nowadays, just like the once prestigious word "Banker", which is misused in...

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Revision to Nomination of Insurance Nominees Regulation With the onset of the Mental Capacity Act ("MCA") coming into effect on 1st March 2010, the Insurance (Nomination of Beneficiaries) Regulations 2009 ("the Regulations") will be amended to effect 2 changes: The...

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The ABCs of the Financial Advisers Act The title, Financial Adviser, is always mis-used in the industry and misunderstood by the consumers. On 10 October 2002, the Financial Advisers Act came into effect and all financial institutions are...

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Consolidate your CPF investment to save cost

Posted by Ivan Guan | Posted on 04-04-2010

Category : Investment Philosophy

Tags: ,

Many people have invested their CPF via CPF Investment Scheme. They have invested through insurance companies, banks, or online fund providers. However, few people realize that besides fund management fees, agent bank charges can rack up a significant amount and reduce your investment return substantially.

The reason is that each fund house whose funds you purchased will individually and separately request monies from your CPF agent bank.

Currently in Singapore, you can only open CPF investment account with three local banks, namely, DBS, UOB and OCBC. The banks will typically charge for the following transactions:

  • Per Buy Transaction – up to $25 per fund
  • Per Sell Transaction – up to $25 per fund
  • Per Fund Switch (This involves a sell transaction followed by a bank transaction – up to $25 per fund
  • Quarterly service charge – $2 per fund

While the individual charges appear small, the total charges can erode your returns significantly, and worse still, they will continue even if you are losing money.

The good news is, we are able to provide you with CPFIS Registered Investment Administrator (IA) Platform. There are only 3 IAs approved by CPF. They are:

  1. iFAST Financial Pte Ltd
  2. Navigator Investment Services Ltd
  3. Phillip Securities Pte Ltd

Take iFast for example, by using our platform, the bank charges are reduced to

  • Per Buy Transaction – $2.50 regardless of number of units and number of funds
  • Per Sell Transaction – $2.50 regardless of number of units and number of funds
  • Per Fund Switch  – No agent bank charges incurred
  • Quarterly service charge – $2 regardless of number of units
  • Furthermore, you enjoy consolidated statement and Faster completion time – CPF transactions are cut by 50%

Below is an example of the cost you can save, you can simply transfer your existing portfolio to us with no cost and enjoy the savings. Contact us if you would like to find out more

Raising the Threshold for CPF Investment Scheme-Special Account Investment

Posted by Ivan Guan | Posted on 19-03-2010

Category : CPF

Tags:

From 1 July 2010, the first $40,000 of members’ Special Account balances will no longer be allowed to be used for investments. Given the higher risk-free interest rate on the Special Account, it is better to be more conservative than to subject these savings to the uncertainty of CPFIS returns.

There is no change to the requirement for members to set aside $20,000 in the Ordinary Account before they can invest their Ordinary Account monies.

Source: CPF Website

Reminder to CPF Recurring Single Premium policy (RSP) customers

Posted by Ivan Guan | Posted on 16-06-2008

Category : CPF, Market Commentary

Tags: ,

CPF Board has advised all insurers to send a letter to all customers who has a Recurring Single Premium (RSP) policy purchased under the CPF Investment Scheme – Ordinary Account (CPFIS-OA), to remind them about the possibility of a penalty charge, should it fail the minimum investment amount criteria set by CPF Board. A sample content of the letter is as follows: (It is important to take note, especially the penalty. )

Dear Customer

You have a Recurring Single Premium policy (RSP) purchased under the CPF Investment Scheme – Ordinary Account (CPFIS-OA), whereby the monthly/quarterly/semi-annual/annual contribution to the RSP is $X (to be filled in by company).

CPF Board has announced that from 1 April 2008, you will not be able to invest the first $20,000 in your Ordinary Account (OA). To invest under CPFIS-OA, you will have to set aside $20,000 in your OA before the remaining savings in your OA can be used for investments. (This restriction is in place because of the extra 1% interest that you will earn on the first $60,000 of your combined CPF accounts from 1 January 2008.) However, this restriction does not apply to balances in your Investment Account (IA) with your agent bank.

Please check your OA and IA balance and consider whether you have sufficient funds for not only the next RSP deduction, but also for future RSP deductions. In particular, if your RSP  contribution exceeds your IA balance, and if your OA balance is below $20,000, the application for withdrawal of funds from your CPFIS agent bank will be rejected and your agent bank, at its discretion, will charge you $5.35.