3 basic must-ask questions to a Unit Trust Consultant

What are the questions to ask when investing in unit trust?

Or more importantly, the questions to ask BEFORE investing?

As an independent financial adviser (check out my client’s testimonials HERE and how I construct an investment portfolio for clients), I propose the no-hold barred investment questions to ask , below:
1. How much could I possibly lose?
2. What are the upfront and hidden costs?
3. How long can I double my money compared to FD rate?


1. Test your agent’s honesty. If he/she guarantees you not to lose money, you can ask him/her if he/she is going to compensate you with his/her own money when you DO lose money. The point is, I expect the agent to give me honest info on the performance of the fund, especially in 2008, without sugar-coating or with manipulated marketing material. As an investor, I know I got to be realistic; for instance, no equity fund will make money during recession. But if you are an agent with integrity, I might end up buying the same fund from you than someone who’s misleading me or giving me empty promises.
2. Be aware that your upfront sales charge and the yearly management fees of the fund will erode your profits. If your agent is not able to show you the figure, then you are a smarter investor than him, who is nothing but a mere salesman. Do you want to hand over your money to such agent?

3. Expect him to answer this in….no longer than 10 seconds. It’s based on the simple Rule of 72. If FD rate is 3%, you will double your money in (72/3) = 24 years. If your projected annual return is 6%, it will take (72/6) = 12 years to double your money. Your agent should be knowledgeable enough, else, he is just incompetent.

If you are a UTC, equip yourself with these, among others. Simple yes? But I am surprised at how many agents who don’t know the basics; instead being solely the sales person who has mastered the art looking as if they care about your money.

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