Yesterday, I was inundated with messages and and emails from clients of the MAPFRE MSV Life policies who feel they have been deceived. MAPFRE are acting simultaneously, as a financial advisor, fund manager and even fund/stock broker. Supposedly they provide insurance services, but their foray into financial services has left many Maltese clients broken and fuming.
There are cases of individuals who even invested hundreds of thousands of Maltese pounds in the 1990s for a forty year term, with the promise of cashing in up to 50% returns after 40 years, but are now being told they will be cashing in a total return of around 10- 15%. For those claiming that this is how pension funds work, by providing a stable return without volatility and risk, are wrong. Pension funds are supposed to give you a return on your investment, and a 10% – 15% return after 40 years is basically a loss on your investment considering inflation. Note, that MSV sold these kind of products when European government bonds could give you 10% annual and risk-free return and more.
It is also strange and probably deceiving that the fund would tell its clients that profits had not been made as predicted after 40 years with the consequence of issuing the minimum payout. The returns calculated after 4 decades should come with multiples and not double, let alone single-digit percentage returns.
MAPFRE has successfully sold its financial products to many people by duping them and by taking advantage from their lack of financial education. They have a long history of disappointing customers, promising them the possibility of returns that are often not materialised, and making them believe that their products are good and safe investments. They are not a unique case in Malta, but probably, the most disappointing financial services provider among the many other under-performing Maltese funds.
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