These case studies have been modified so as not to identify any actual cases at FIDReC. They are provided for purposes of learning and are not necessarily indicative of outcomes at FIDReC.


75-year-old Mrs Ang visited her local Bank alone intending to place a fixed deposit. Mrs Ang was illiterate but could speak mandarin. She received the equivalent of primary 3 education outside Singapore. Mr Tan, a banker, attended to her. Mrs Ang told Mr Tan that she wanted to open a fixed deposit account with $100,000. But Mr Tan persuaded her to take up a unit trust product. From what Mr Tan said, Mrs Ang thought that the unit trust product was like a fixed deposit. She thought her capital would be protected and she would earn regular interest. She then agreed to take up the unit trust product. As Mrs Ang was illiterate, Mr Tan filled up all the forms for her and she signed where he asked her to.

A year later, Mrs Ang’s daughter who lived overseas returned to Singapore to visit her. After showing her Bank statement to her daughter, Mrs Ang discovered that the unit trust product was in fact a form of investment. Mrs Ang then went to the Bank branch and found out that the value of the unit trust was less than $80,000. Shocked at the loss, she immediately instructed the Bank to liquidate the product and claimed compensation from the Bank. The Bank refused the claim. The Bank said that Mrs Ang had signed all the necessary forms and had also received a callback from the Bank after she purchased the product. Mrs Ang came to FIDReC for help.

Mediation was not successful and Mrs Ang chose to continue with adjudication.

During adjudication, the Adjudicator found that Mrs Ang would not have signed the documents if Mr Tan had indeed made known to her the features and nature of the product. Especially that capital was not guaranteed. The Adjudicator observed many errors in the financial needs analysis form. For example, the form stated that Mrs Ang had prior experience investing in unit trusts and life insurance policies when this was not true. The Adjudicator noted that it was impossible for Mrs Ang to review the correctness of the form because she was illiterate. The Adjudicator further reviewed the recording of the callback and noted that Mrs Ang was hesitant in her responses. The caller was also not able to provide the name of the product in Mandarin. Considering Mrs Ang’s risk tolerance and investment objectives, the Adjudicator found that the unit trust was not suitable for her. There was no evidence from Mr Tan to contradict Mrs Ang’s account as the Bank did not offer him as a witness.

The Adjudicator found that the Bank should pay Mrs Ang her claim amount after deducting the returns that Mrs Ang had received from the unit trust.


Key Learning Points

  • The Monetary Authority of Singapore (MAS) defines ‘selected client’ as someone who meets any two of the following criteria:
  • Is 62 years of age or older,
  • Is not proficient in spoken or written English, or
  • Has secondary education or below.
  • When dealing with selected clients, MAS requires financial institutions to have controls in place. They must check that their representatives have followed the required sales process before a transaction is submitted for processing. This generally includes a call-back.
  • Take all call-backs seriously.
  • If you are not able to read and understand the documents you have signed, do seek help from a trusted individual as soon as possible.
  • Unit trusts or funds are not capital guaranteed.
  • There is usually a 7-day free-look period for unit trust purchases where you can review and cancel the purchase. There will not be any administrative penalty, but you may suffer a loss if the unit trust has fallen in market value after you bought it.
  • MoneySense, Singapore’s national financial education programme, provides information about unit trusts and other investment products on their website. Find out more before purchasing.


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