I AM intrigued to know how Steve Cumming in his letter (Sunday Money , July 2) can make the statement: 'I agree the majority of financial advisers in Hong Kong are misleading investors about insurance policies.' Mr Cumming also states that he 'takes issue that insurance-based investment plans can be good investments if sold correctly'.
This is complete nonsense. My company, authorised in Hong Kong, writes an enormous amount of traditional with-profit endowment policies that combine insurance and investment and are written by advisers in conjunction with clients' needs.
We have declared bonuses every year since inception in 1824. When you compare this with the average unit trust returns for 1994, I would say a with-profit endowment is quite a viable alternative.
The term argument is also a non-starter. A term policy with manageable premiums provides discipline and commitment, which are vital for retirement and school fees planning and mortgage repayment.
Unit trust savings plans allow investors to dip in, and stop and start, at the merest whim, and many investors want a long-term commitment to avoid this, so are well aware of the charge involved.
I take exception to the comment that investors will incur the penalties if they cease contributions or draw down premiums. This is misleading.
