The yellow section of the chart shows that insurers reported over half a trillion HK dollars in office premiums since 1997. Data isn’t available yet for 2013 and 2014, but it would probably push the figure near $600 billion.
The amount of fees insurers have collected is definitely in the tens and maybe in the hundreds of billions.
The #1 bestselling ILAS product is 25-year savings scams. When insurers sell these, they typically steal the first two years of savings, and then they collect at least 1.5% annually on the rest (in addition to the fund managers’ fees).
In the book, “The Great Expat Financial Planning Ripoff“, savings plans were called a “multi-million dollar worldwide scam”. Maybe this statistic was correct at the time the book was written, but now, the industry has seemingly grown into a multi-billion dollar scam (even if calculated in USD).
The above chart shows that nearly 1.7 million ILAS policies were still in-force as of two months ago. This is truly horrifying, given that 99% of people in Hong Kong should not own an ILAS policy.
Clearly, the quality of investment advice in Hong Kong is abysmal. Regulators need to wake up and address the root of the problem: the commission-based advisory model. The UK has banned this corrupt system, and Hong Kong should do likewise.