In 2015, there will be new laws governing the conduct of financial advisers in Singapore. Despite large number of laws governing the manner which financial advisers must act, majority of these laws could not be enforced. If you look at the enforcement notices posted on MAS’ websites HERE relating to financial advisory activities, almost none of the enforcement actions were related to actual … [Read more...]
Majority of Singaporeans unprepared for retirement, says DBS Bank
The DBS Bank survey of 1,000 Singaporeans and Permanent Residents showed that: 75% are not following any financial plan for retirement needs Many do not even know where or how to start planning 24% of the respondents felt that financial products are barriers to financial planning 23% felt they do not have enough funds to start investing People underestimate the funds they need for … [Read more...]
ST forum: Guarantee CPF Life solvency for peace of mind
The following letter was published in Straits Times Forum page on 13 August 2014 regarding CPF Life solvency: Guarantee CPF Life solvency for peace of mind THERE is merit in removing the Central Provident Fund Minimum Sum cap ("Call to remove cap on CPF Life top-ups"; last Wednesday). There are those who have met their Minimum Sum but wish the cap can be removed, so they can get bigger … [Read more...]
It’s too late to do retirement planning when old, says Citi-SMU
According to Citi-SMU (SingaporeManagement University) symposium on financial Literacy for young adults, it is important to start managing one's finances when young. This is because picking up financial literacy is more suited when one is young. When you are old, "you can't teach old dogs new tricks". Financial literacy means the ability to understand and process economic information. Thus, it … [Read more...]
Question on Investment Linked Policy charges (ILP charges)
Question: Wilfred, my financial adviser sold me a product called X and he told me that the insurance charges are constant throughout my entire life. My premium is $1,200 a year. However, I read in the forum that such ILPs’ insurance charges increase with age. I am confused, can you advise me how much will I be paying when I am say at 80 years old? I am a male and non-smoker. Answer: The … [Read more...]
Up to 70% of financial advisers’ recommendations were unsuitable, says MAS mystery shoppers survey
MAS commissioned an external consultant to conduct a mystery shopping exercise in 2012 to determine the quality of advice given out by financial advisers[1]. The MAS mystery shoppers' statistics were as follow: 28% of the recommendations were suitable; 40% of the recommendations may be suitable; 30% of the recommendations were not suitable. Because ‘may be suitable’ means potentially … [Read more...]
Dividend Yield Play turn out to be a disaster (as usual, nothing new under the sun)
Today’s Sunday Times talk about Business investment trust in which it was found to be attractive to investors looking for dividends. I am always very fascinated by the idea of high dividend yield play. I know of even financial advisers advising clients to do that without knowing what they are talking about. There was this person who was quoted as saying, “The yield was the main factor,” said … [Read more...]
Free advice is going to cost you your entire HDB flat!
Everybody I know is concerned about their salary because they want to save for retirement. Financial advisers are no different from the human being next door. They need to earn a living as well. Unfortunately, such clients are going to be sold expensive product. Why? It has to do with low levels of productivity. Productivity is the amount of output for each unit of input. For financial adviser, … [Read more...]
Why financial advisers must abandon their clients?
I often hear of complains from clients that their previous advisers stop contacting them after a few years. Clients often felt that their advisers were just out to make money but did not bother about after sales service. I would like to write about this from a new perspective. Let’s say the adviser need to earn $4000 per month in earnings. Assuming a banding rate of 70%, the gross revenue to … [Read more...]
Examples of mis-selling an insurance
In this short article, I will show how insurance products are mis-sold to unsuspecting customers. This article also serves as an education short write-up for existing financial advisers because they are often trained to mis-sell in these fashion: The unsuspecting public would often be approached by an insurance salesperson who will propose an insurance product as saving element. The customer … [Read more...]
