There is a current court case in which two sisters are fighting over their inheritance. This was reported by Straits Times "CJ: Be diligent when making wills for elderly" dated 11 August 2010 in which Ms Caroline Chee, 48, and her elder sister Muriel, 54, had each produced a will by their late mother, Madam Goh Hun Keong, who died in 2004 at the age of 83. The lower court and the Court of Appeal … [Read more...]
You are viewing articles categorised under Unethical sales process
The financial advisory industry in Singapore is notorious for mis-selling. I hope to highlight this issue through this blog
LIA’s robust sales figure in life insurance unrelated to insurance
89% of the money the insurers paid were UNRELATED to insurance. According to the newly release statistics from Life Insurance Association HERE, the life insurance industry experienced a 28% increased in sales for the first half of 2010 as compared to the same period in 2009. However, in terms of claim payout only $210 million out of $1.85 billion were related to death, disability and critical … [Read more...]
AXA demanding S$7 million back from Finexis, according to report
In today’s Straits Times entitled “Insurer fumes over policy’s high lapse rate” dated 24 July 2010 by Ms Lorna Tan, it was reported that Finexis offered first year premium free for AXA’s FutureProtector – a term insurance. The first year is free because Finexis rebated majority of its commission to its clients. After 1 year, the policy lapse rate increased significantly to the extend that AXA is … [Read more...]
What are the financial planning responsibilities for parents?
Some time ago I spoke to a friend whose brother was in a coma due to hemorrhage in the brain because of a stroke. He was in coma for many months already. I understand that he was in his late thirties, got two primary school children and has a wife who was a homemaker. The coma now qualifies under total and permanent disability. Hence, the patient qualified to claim Dependent Protection Scheme … [Read more...]
Why Singapore & Australia opposed banning commissions?
"Customers and clients, when they're seeing a financial planner, deserve to know that a financial planner is acting in their best interest and when you have commissions that is simply impossible," the Financial Services Minister Chris Bowen said in an article from channelnewsasia.com HERE. However, there is some opposition to it. According to the article, "the conservative opposition said it … [Read more...]
Silent Pain From an Insurance Agent
I received the following email from a disillusion insurance agent. What the person described below is very real but it is an unspoken “pain” that all insurance agents go through. I am currently a new insurance agent with one of the big companies in Singapore. I am probably getting a bit disillusioned now, what with the huge focus on sales rather than financial planning. Most of our sales come … [Read more...]
Why you should not buy products with upfront commission?
Most insurance products pay an upfront commission to the adviser. Sometime it is just one huge lump sum commission other times it is spread over 3 – 6 years. This is to provide the adviser the incentive to sell products but it also promote short-term attitude. I always encounter the following problems as a result of this: Many advisers after selling the product offer no after-sales service. … [Read more...]
Economic reality of your net worth (balance sheet) i.e. ILPs increases your debt
Your networth is a balance sheet listing your assets and liabilities. The difference for both is called the net worth. However, the net worth or balance sheet contains many “off-balance sheet” items. Today, I’ll write about the most common off-balance sheet item. I will give an example: Let’s say your net worth is as below: Assets Cash $30,000 Property $400,000 Liability Mortgage … [Read more...]
Non-par with non-guaranteed surrender value
I encountered a policy which is a non-par product. It is not an ILP but has cash values. By right, everything is guaranteed including the early surrender penalty. Apparently, the early surrender penalty is not guaranteed. How the cash value is determined was not disclosed. It isn't link to any interest rate or whatever. The policy document says the insurer has the right to vary the surrender … [Read more...]
What is a junk Will?
When comes to Will writing, some people either do a DIY Will or get a lawyer to do it. Most of the time the Will is either invalid or is valid but practically useless. Why? A Will is merely a tool. If the tool is used wrongly, it is a rubbish tool. An analogy is like buying an insurance product: If you ask an insurance salesperson for specific product advice, the insurance person can give … [Read more...]
