Independent body needed to provide guidance to investors for complex products

UNTIL recently, there was no independent avenue for ordinary investors to seek help or guidance on fully understanding investment-linked insurance policies (ILPs) that their insurance agents might recommend.

Typically, many end up consulting their friends or family who may or may not be financially trained. This leads to them signing up for ILPs without knowing the true nature of what they are buying (it’s essentially a product that bundles investment funds with a life insurance component) and the associated risks.

Fortunately, now there is an initiative called Redflags, which is a Web-based digital tool launched a few months ago by six enterprising individuals to help simplify jargon in financial product documents, such as ILP factsheets.