Investing using the untouchable CPF has always been a topic in our journey with money. Previously, we have spoken on how to maximize your CPF (read here for some background). From 5th March 2018, there are several highlights made in the way we can invest using our CPF.
The Committee of Supply has suggested and these will be the new enhancement for CPFIS members who have the knowledge and time to invest and are prepared to take investment risk.
Change Number 1: Self Awareness Questionnaire
From 1st October 2018, CPFIS members will have to go through the self awareness questionnaire to see if CPFIS is suitable for them. Members can participate in CPFIS regardless of result from the questionnaire.
Change Number 2: Removal of Sales Charges
Charges are something that people will like to reduce. Sales charges are fees paid up to financial distributors (financial advisers, etc). Sales Charges will be reduced progressively. The reduction can be seen in the table 1.
Change Number 3: Removal of Wrap Fees
Wrap fees are recurring fee paid.It is usually charged as a percentage of the market value of the assets under administration of the financial adviser.
These changes seem to encourage CPFIS members to be more aware of their investment and are rewarded with lower sales charges. With this removal of fees, CPFIS members have only themselves to depend on to make informed decision regarding their investment.
Bonus: How does CPF works in 3 minutes