The Hong Kong Federation of Insurers (HKFI), the industry’s so-called self-regulatory body, launched a media campaign last year to misinform the public about ILAS. This was mentioned in HFKI’s latest annual report:
HKFI outrageously and falsely claimed that ILAS “is a simple and effective vehicle for regular saving”. The truth is that ILAS is one of the most complex and deceptive investment products ever invented. Most ILAS savings plans are scams, which defraud investors out of their first years of savings. The products are only “effective” as a means of destroying savings, not accumulating it.
HKFI also touted the “death benefit” as one of the attractive features of ILAS. This so-called death benefit is usually no more than an extra 1% of the account value, which is a mere fraction of the annual fees. (Fees can exceed 13% in a single year.) This meager death benefit is a complete ripoff for consumers seeking life protection.
HKFI also mentioned that ILAS offers “enhanced consumer protection”. This is certainly the worst of all the lies. Real consumer protection would mean outlawing these products, imprisoning the executives who are responsible for creating and distributing them, and then refunding all the victims who have been scammed.
Coverage in International Adviser
Last year, when HKFI’s propaganda campaign was launched, International Adviser (the industry’s mouthpiece) wrote a story entitled, “HKFI campaign counter attacks on ILAS“. It said:
The Hong Kong Federation of Insurers has launched a media campaign to counter recent “unbalanced and negative” attacks on Investment Linked Assurance Schemes by regulators and the media.
The article quoted Rosetta Fong, CEO of Convoy Financial Services, a large predatory advisory firm which earns 90% of its revenue from ripping off consumers (by flogging ILAS products for obscene commissions). Rosetta Fong is on the intermediary panel of International Adviser, which allows her to “provide guidance in the editorial direction of the magazine.” She said:
“The HKFI campaign is needed to educate the public about the whole picture of ILAS by including its benefits rather than just focusing on the negative or risk side of the product.
“In the first place, the nature of ILAS itself is actually neutral and it is only one of the investment tools that could be considered for managing one’s investment portfolio.”
Both of her sentences were false.
Most ILAS products are scams and therefore not “neutral”. They are criminal.
HKFI’s misinformation campaign was definitely not needed. Consumers are already bombarded with a never-ending stream of lies from the marketing departments of the evil companies that sell ILAS (e.g., Convoy). The regulators and media were doing the right thing by warning consumers about the overwhelming “negative or risk side of the product”, since the crooks who sell it definitely are not.