Last Updated on 16, January 2017
I read with delight that Monetary Authority of Singapore will be introducing a new investment product unheard of in the financial world. It is called the Singapore Saving Bonds also known as Free Lunch (term is coined by Wilfred Ling). The Free Lunch Singapore Saving Bonds is an investment product that has all the features of a Free Lunch. Features of this Free Lunch are:
- Principal guaranteed by Singapore Government. In other words, risk free.
- Denominated in SGD – no currency risk.
- If you hold to maturity of 10 years, you get the total return similar to a 10 years Singapore Government Securities (SGS).
- If you do not hold to maturity, you get the total return similar to an equivalent holding period of a SGS. I.e. If you hold for 2 years, your total return is similar to a 2-years SGS.
- You do not need to decide how long to hold from the onset.
- You can liquidate every month (i.e. monthly dealing) and sell it back to MAS without penalty. You even get back your accrued interest. i.e. MAS is the market maker.
- If you liquidate, you get back your principal. (i.e. no price risk unlike like selling a SGS). Put it this way, there is no duration risk.
- Low entry level: Minimum $500 and a subsequent multiple of $500.
Fine prints:
- Singapore Saving Bonds has a cap as to the amount you can buy as individual.
- You cannot sell it in the secondary market. i.e. non-tradable to anyone else other than to the government.
- Singapore Saving Bonds is only available to individuals. Institutions are not permitted to buy.
Source: http://www.mas.gov.sg/~/media/resource/news_room/press_releases/2015/Factsheet%20Savings%20Bonds
My comments: There is a need for a cap otherwise all the banks will suddenly find all their depositors withdrawing from their accounts and this will result in a surge of interest rate. This is equivalent to MAS setting interest rates. But as we all know, our monetary policy is to manage the strength of our Singapore dollar currency against a basket of currencies. Conventional economics tell us that it is not possible to set interest rates and manage the country’s currency.
The Singapore Saving Bonds is most suitable for those who are risk adverse. Instead of buying bond unit trusts or endowment, they can use this instrument after all the total return if held to maturity is likely to be higher than an endowment.
Why is the Singapore Saving Bonds free lunch?
Reason 1: The Singapore Saving Bonds can be viewed as long bond and long put whose strike price is the par value of the bond. Normally there is a credit risk for the put option. In this case, the counterparty is an AAA credit worthy Singapore government. The only counterparty risk I see is political risk because it depends on the political stability of the government. But this political risk is not relevant in ascertaining the credit risk of Singapore Saving Bonds because a corrupt or incompetent government could cause chaos in the financial system resulting in the cash in the bank to disappear too.
Reason 2: The investor does not need to pay for the option premium. The total return is not lower if held to maturity as compared to a conventional 10 years SGS which implies the option premium is free. Actually the option premium is funded by taxpayer since there is no such thing as free in this world.
Reason 3: There is likely no commission. I just assume this is the case as it is only available from MAS. No product salesman can sell it. The administrative cost is funded by taxpayers' money since there is nothing free in this world.
Reason 4: The Singapore Saving Bonds is 100% guaranteed by government. On the other hand, cash deposits in the banks are insured up to $50,000 by the Deposit Insurance Scheme.
If the Free Lunch is as good as what the factsheet says, I would probably use it as part of my clients’ financial planning especially for clients whose risk tolerance is very low. It will also be a good diversifier in the investment portfolio.
Why some financial advisers' livelihood may get affected?
In the meantime, reasons why some financial advisers' livelihood may get affected are:
- The new Singapore Saving Bonds to be introduced later this year provides people with an option to get a higher return at no risk and with only one-month lock-in. Who wants to commit to an endowment policy with only similar returns with long lock-in period? In other words, financial advisers cannot sell endowment products.
- Effective from 1 January 2015, the Balance Score Card aims to penalize advisers who fail the meet their KPIs. But there is no reward for those who surpass their KPIs. The only occupation in Singapore which deducts your income as punishment but does not provide bonuses as incentives is the occupation call “financial adviser”.
- The government is going to provide FREE one-on-one retirement planning service to all CPF Members turning 55. This is like competing with what a financial adviser should be doing.
- The option for CPF members to increase their CPF Retirement account to a much higher amount (known as Enhanced Retirement Sum) means less money for advisers’ clients to buy products.
- All financial advisers know that the CPF Life returns are much higher than what insurers can offer. In other words, the government is competing with financial advisers.
- The direct insurance channel to be launch soon aims to remove the middleman. In other words, the insurance companies will be competing directly with their own agents and advisers.
- The RBC2 to be introduce in 2016 is likely to result in insurers cutting revisionary bonuses. New par products which were introduced recently that are compliance with RBC2 are terrible : No revisionary bonus but only got a huge non-guaranteed terminal bonuses. Who would want to buy this kind of par product? It sounds like ILP to me. In fact, an ILP is much more transparent. In other words, RBC2 may see the end of whole life products because no consumer will dare to buy it. Financial advisers who sell par products are going to be affected. They could, however, sell ILPs.
Don’t get me wrong. Everything the government is doing above is beneficial for the end customers. Consumers should rejoice (except the last point on advisers needing to sell ILPs because par products are going to look like opaque ILPs). For many financial advisers who rely on selling products to earn commissions may find their livelihood affected.
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Hi wilfred
I was about to seek your views on this product. Thank you for sharing.
You sound LIKE a PAPster. Elections coming huh?
This blog is for those who are keen to learn about financial planning. It’s not a political blog.
2 points to note:
i) The schedule of rates for each issue of Savings Bond is fixed at issuance. That means this is not a fire-and-forget savings vehicle. Rates are dynamic in real world. So 6 months down the road, new issues of Savings Bonds will have different schedule of rates. This means whenever rates go up, masses of people will simply sell their existing Savings Bonds with no penalty & buy new Savings Bonds with higher rates. This free lunch (moral hazard) increases costs and disadvantages the govt, and not sure how long govt will allow it.
ii) As far as I can remember since the 1990s, yields of SGS has never been able to cover typical inflation rates. Even 30-year SGS yield is lower than inflation, don’t talk about 10-yr SGS. The current 10-yr SGS yield is about 2.2%. So this Savings Bonds cannot be used primarily for long-term retirement. It’s place in your portfolio should be cash liquidity, an alternative to money market funds / short-term IG bond funds.
Let’s wait for the details and we can do the maths.
I do not think that the interest rates will be fixed on issuance of the savings bonds. Since it tracks the SGS, i believe the interest will be adjusted accordingly every year.
JY,
MAS already tell you that the rates are fixed on issuance. Unless they backtrack what they have already announced to the whole world.
I’m not very educated in such forms of investments. I do agree that it seems to be risk-free but judging from the MAS factsheet, I wouldn’t say that FAs should quit their job. The annual yields are way too low to attract serious investors looking to stay ahead of the inflation rate.
A typical 10 year endowment could hardly be better than the Singapore Saving Bonds.
FAs provide solutions to the unforeseen future potential circumstances. You are planting everything on investments. The dignity of FAs are in Life plans that would help families if one member of the family were to pass on. The rest of the family members would not be burdened down by finances.
Do note that a coin is double sided and do not judge by seeing only one side of the coin.
Thank you.
Aidan,
Nothing in my article or my comments advocate planting everything on investments.
You prolly had a bad encounter with financial advisors. Just don’t go too far by telling FAs to quit their jobs.
Some people like me live and breathe insurance like myself cause it is our passion.
Thank you for understanding.
Thank You Audan. There is more than just finanical planning in the job of a finanical advisor. A good and sincere finanical advisor can save life n family suffering in the event of unfortunate events. Your understanding of the role is shallow and hence please refrain from putting up a sentence like that. Thank you very much.
What protection planning u talk about? Salesmen like you only plan for customers to have enough to buy his or her coffin or last expense planning.
You breath insurance?. The truth is you eat,breath, dream and smell commission only.
FAIR won’t be needed if you really do what you say. but mystery shopping MAS uncovered otherwise . It uncovered that 70% of you so call passionate salesmen disguised as financial consultants, planners, advisers are glib tongue high commission product peddlers who peddle unsuitable products to benefit your pockets and the company. The people who love you are your company and managers. Your customers don’t even know what hit them . Some might know they were cheated by their trusted ” consultant” and who was also their GOOD friend after 20 years down the road.This anecdote repeats again and again.
WL tries to paint his view of the effect on Govt savings bond but has gone too far in asking FA who sell products to quit! This is too simplistic and sounds he is not happy with these advisers. Not all consumers want fee-paying advisers like him so there are different segments of the market.
And as “xyz” says the savings bond also has its problem if interest rate keep going up. There is no one size fits all solutions which the writer odd to realise. Human interaction, emotions and trust has a place in financial planning, fee based or not.
jc,
With the announced structure of SSB as declared by MAS (& Jos Teo in parliament), if interest rates go up, people will simply sell their existing SSBs at no penalty and buy new SSBs with higher interest rates. Free lunch. Whether this policy will last 5, 10, 20 years …. who knows??
So if anyone looking to do a simple savings (3%-5%) please go to wilfred. Anyone else (which is the majority) seeking for professional financial advise with high yield with life protection please approach our professional Financial Advisers. From how wilfred say go away from above reply, he seems to be a self centered person hoping to cannibalise the market himself with simple act of blogging. The financial world’s amos yee.
Beware to take advise from him as it will limit your financial growth To savings bond.
The yields of 20-year endowments & wholelife policies are now only 2.5% to 3.5%. Cannot even hit 4.5%.
Old-timer salesmen in their 50s or 60s will sell you as 6% or 8%. These type of returns only in 1970s, 1980s and early 1990s before 1997.
Unfortunately these old-timers still living in the past & refuse to update themselves & accept the actual facts, and continue to train those gullible 20-something salesmen / saleswomen to con-sell consumers at 6% or 8%.
If you have basic O-level A Maths, you yourself will be able to calculate the REAL ACTUAL yields of the plans you are selling.
Your say: The new Singapore Saving Bonds to be introduced later this year provides people with an option to get a higher return at no risk and with only one-month lock-in. Who wants to commit to an endowment policy with only similar returns with long lock-in period? In other words, financial advisers cannot sell endowment products anymore.
My say: Financial adviser plans ahead of time, seeking to provide security and assurance for the client’s future financial needs. They provide assurance, not returns. The endowment plans you’re talking about are not meant for growth for short-mid term duration. In fact, my guess is it might affect more on people doing investments and equities. According to what you say, my guess is you have a low tolerance level for long term planning, so perhaps you can try not to mislead the rest of the people.
Your say: Effective from 1 January 2015, the Balance Score Card aims to penalize advisers who fail the meet their KPIs. But there is no reward for those who surpass their KPIs. The only occupation in Singapore which deducts your income as punishment but does not provide bonuses as incentives is the occupation call “financial adviser”.
My say: Nothing much to say here, can sense your hatred for the insurance industry. Perhaps you’ve been in there and have been treated unfairly or rather, you failed to perform.
Your say: The government is going to provide FREE one-on-one retirement planning service to all CPF Members turning 55. In other words, nobody would want financial advisers’ retirement planning services even if it’s free.
My say: So now you work for the government? Why would people do retirement planning at the age of 55? If you notice, it might be a little too late to do so at that age. This is why retirement planning starts earlier, at ages where we work, when we have a better income or surplus. And, don’t take too much ‘responsibility’ by speaking on behalf of everyone. Trust me, you’re just one more guy who’s unhappy about something.
Your say:The option for CPF members to increase their CPF Retirement account to a much higher amount (known as Enhanced Retirement Sum) means less money for advisers’ clients to buy products. Those who wants to increase their CPF Retirement account to match the new higher limit are those who are wealthy.
All financial advisers know that the CPF Life returns are much higher than what insurers can offer. In other words, the government is competing with financial advisers.
My say: Actually, CPF Life returns are not exactly higher than what insurers offer. Get your facts and math right. Seriously, how many people out of 10 now wants to put more money into CPF? Without any transparency, the only reason why more money is being channeled there is only due to the increase in the minimum sum.
Your say: The direct insurance channel and the web aggregator to be launch soon aims to remove the middleman. In other words, the insurance companies will be competing directly with their own agents and advisers.
My say: And so, do you think an internet site can replace humanity? Agents and advisers are people too, they can understand what a web system cannot. And that’s where and what is irreplaceable.
Your say: The RBC2 to be introduce in 2016 is likely to result in insurers cutting revisionary bonuses. New par products which were introduced recently that are compliance with RBC2 are terrible : No revisionary bonus but only got a huge non-guaranteed terminal bonuses. Who would want to buy this kind of par product? It sounds like ILP to me. In fact, an ILP is much more transparent. In other words, RBC2 shall see the end of whole life products because no consumer will dare to buy it. Financial advisers who sell par products are going to get zero sales. They could, however, sell ILPs.
My say: Great vision! Go start a company doing this! Hahaha! I simply love the way you decide how the world runs!
And yes, I am a financial consultant. And I just want to share my opinions. Don’t penalized me okay?
Well said!
Such strong words that come out from an Independent Financial Advisor. Hmm…
But then again, Wilfred is probably right. The changes in MAS regulation will help to sieve out the salesmen amongst Financial Advisors.
Ah yes, I am a Financial Advisor too, but I would like to thank you for persuading the unethical ‘advisors’ to quit their job so as to not taint the professional image any further. Thanks!
SimplyJay,
You’re a very good example of the phrase “It’s better to keep quiet and appear the fool, rather than opening your mouth and confirming you’re the fool”.
70% of what you wrote is simply gibberish and the other 30% plain wrong.
Hmm, from what I see the new product is definitely great for those that are less financially-savvy: buy and keep. The returns are not that high(max 3++ %?) For higher networth customers and those who have a greater risk appetite, they will obviously split their portfolio into some principal-guaranteed instruments and those with higher risks/returns. So, it is not a likely situation financial advisors/private bankers will not have a job!
Any anyway… with our cpf hardly entirely enough for retirement, there is definitely a need to cover yourself with insurance.
As I said way way above, you shouldn’t simply buy & hold SSBs for 10 years and forget about them. To maximise interest returns, you have to continuously monitor every month’s issue of new SSB — see if the new rates are higher or not.
Max returns will be much lower than 3% for the foreseeable future.
SSB is simply a risk-free liquidity vehicle, similar to banks deposits, SGD fixed deposits, money market funds.
Do you plan your entire portfolio or retirement funds using just bank deposits or FDs or money market funds?!? No right?! Only a small portion of your portfolio will be in cash-like instruments for liquidity purposes.
E.g. I have a $1M portfolio where 15% is liquidity portion. I can now decide that 7% of that 15% to be put into SSB (subject to MAS cap), while the other 8% remains in money mkt funds, banks deposits.
So what’s all the fuss about SSBs?!?! Even if I game the system and utilise the “SSB Free Lunch” it is just like earning $1 or $2. It won’t pay your retirement or your bills.
* And btw, CPF should be treated like SSB in the bigger scheme of things — CPF should be treated as just a small part of your overall retirement fund. If you depend mainly on CPF for retirement, you cannot retire. End of story.
** Insurance cover & retirement are entirely 2 separate things. If you depend on endowments or wholelife for retirement, you’re also in trouble.
Long story short, to put financial advisors out of job is quite far fetched. Maybe you have been traumatized by them before. And there is a cap to how much every individual can invest into it meaning to say it will not fully satisfied the economies of scale for a high net worth individual. Your POV is too minuscule and showing at most your financial prowess is only limited to the retail (mass) individuals/customers. The pathetic yield is definitely free lunch to you perhaps.
However simply put, there are indefinitely more ways than such to invest our money and achieve better yields even for an average investor, which unfortunately you might not be.
only a self absorbed narcissistic individual has the gall to publicly claim to have coined a commonly used term and claim to be his, and blog about it.
本是同根生，相煎何太急。
Dear Wilfred, I have been reading your post and admire your way in helping your clients to plan. I have learn a great deal of planning skills from you and has apply to my clients as well.
I respected your views on this, but I too feel that it’s too strong a statement to get all of us to quit. We all work hard in our own role, not really money suckers. We have calls & responsibilities to fulfill towards our clients in our line. Our promise to them to always be there to offer help and upgrade ourselves to serve them better. We can’t just quit…
Insurance planning is very important. As said. Insurance are not being purchased, but sold. Most people will not buy or know how much insurance to buy. Statistics shown that ppl with insurance advisors are better covered compared to ppl with none. We can’t just quit…
Hope you understand.
You mentioned that statistics shown that people with insurance advisers are better covered. May I know where can I get this statistics?
Do you mean that your clients are not adequently covered with your professional planning?
Wilfred, please believe that there are a lot of good advisors that are as professional as you, trying to do their best for the clients.
I just want the source of statistics you mentioned and do not imply anything. You read too much into a question or perhaps have totally misunderstood the question in your anger.
No lah, not in the least angry about anything. Jut stating my opinion. Cheers! 🙂
I don’t agree with you.. In fact it is the reverse , those with ‘advisors’ are worse off.
Likelihood they are SOLD high commission products like wholelife or endowment.
I have a friend who told me NONE of his agents ever spoke about term insurance until 20 years later a financial planner use term insurance to plan his insurance needs. That was the day he felt the peace of mind and before this it was FALSE security.
My advice to customers is don’t engage or hire a friendly someone you meet on the street to look after your chicken coop without looking below the outer cover ..You might hire a wolf in sheep’s clothing. Remember all consmen and women are always friendly. Which insurance agent is not friendly and polite?
I will address some qns that other Users have posted:
Definition:
Coupon – interest payment that govt pays u
yield – inverse of price, with coupon incorporated.
interest on SGS saving bonds is benchmark on the yield of SGS bond at the pt u buy it.
e.g
i buy SGS savings bond this yr..
if i sell it back to Govt nxt yr – i receive 0.9% which is 1yr Bond’s yield at 2015
if i sell it back to GOvt 2yrs later – i receive average of 1.26% per yr = 2yr bond’s yield at 2015
if i sell back to govt 5yrs later – i receive average of 1.76% per yr = 5yr bond’s yield at 2015
————> How to play SGS saving bonds? when US rate hike, better issuance rate? sell it back to govt and buy new saving bonds. THIS IS THE REAL FREE LUNCH!!!!!
——————————————————————————————————————————
I still favor normal SGS cuz i get capital gain.
a 2024 maturity 15 yrs bond it has only fallen below par at 2009 and brief in 2011..
ever since then, u have coupon rate of 3% per yr + capital gain.. currently 7.28% capital gain on bond. and since im expecting a crash due to economic cycle.. i find it btr.
——————————————————————————————————————————
Can an endowment guaranteed a rate for 30 yrs? No.. guaranteed rate are nv for long term. Can u foretell future? no? so u bought insurance? But u nv know when u may ever ever need the money and incur a penalty? so probably playing the free lunch game is as good.
many FA reps like to sell high yield products bcuz they have high comms for themselves. But do they have high risk, charges or commissions? ILP makes no sense…
wan high yield, high risk but no annual charges and in/out fees? BUY term invest the rest on equities, bonds or any other ETFs u want!!!
IFA are gd cuz they are “impartial”, there are things i still have to rely on them for. certain policies and diversification..
Saving bonds wont drive out the business but will force insurers to be more competitive and creative in introducing products.. for example, instead of a simple 3%/yr, they could include options/equities convertible options when policy holders held it for a no. of yrs.
the public is not finance educated and the insurers are exploiting.. same idea as Fix depo.
Wilfred,
I am an undergraduate in a local University with no investment portfolio whatsoever. I’m only a PR but not citizen, so 2 questions:
1) Will this be open to non-Singaporean citizens?
2) Is this a bond you recommend for someone starting out on financial planning?
Thanks!!
I am not sure whether who is eligible to buy.
At such a young age, the most important is to get medical insurance. Wealth accumulation is not so important for now.
Most young people cannot afford to have an investment portfolio until they are more than 30 year old because they need a lot of cash to setup their families. Ignore all those so-professed gurus telling you to invests at this age. I have seen countless young people who has to sell all their shares when they realised that they do not have enough money to buy a property when they get married. Unfortunately they tend to sell their shares right at the bottom of the market because they started their investments right at the peak.
In the meantime, study hard and get good grades and hopefully when you graduate you can get a good job that pays well. You will then be able to afford to buy your property & invests for retirement. Without a good paying job, you cannot do any of these.
What Wilfred said about good job & good salary is absolutely the truth. I was able to pay off my 1st HDB in less than 3 years using just me & my wife’s CPF-OA contributions, and still got money left inside the CPF-OA accounts. I was able to use my take-home pay purely for investments, savings, and expenses.
Many of my friends earn such good salaries that they can save 50%-60% of their take-home pay, and can still enjoy a good lifestyle. They don’t need to take risk for their retirement portfolio. Their money mostly in money market funds, short term bonds, and intermediate IG bonds. They don’t even need to touch equities, although I always told them if they were to allocate just 30% of their portfolio to world achieving companies, they can retire very comfortably by 45-50 yrs old.
Wonder when you bought your property?
How come you have special priority to buy at low prices when income is above allowed?
Only PRs have this special privilege.
I dont think these bonds can buy and sell as frequent as shares to ride on the rising interest.
“Investors get step-up interest each year” which means if we hold long-term, our interest to receive will be higher.
According to MAS announcement, you can buy / sell on monthly basis (like hedge funds).
Becoz the schedule of interest rates is fixed at the time of each monthly issue, hence each tranche of SSB is independent of each other in terms of yields.
Hence you can construct yield curves for each individual tranche of SSB to determine if it’s worthwhile to rollover into a higher yielding SSB.
Well it sure has been real entertaining looking at all these postings. Must be a record for this current blog. From the verbal diarrhoea of those salesmen & saleswomen, can say that 100% of them don’t even understand the nature & purpose of SSBs. And not 1 of them really know what exactly is the free lunch being spelled out by MAS. No wonder those really rich & self-driven people don’t use FAs, FCs, agents, or whatnots. They barely even tolerate their own private personal bankers (which are overpaid & glorified salesmen/saleswomen) or even their investment bankers, and they always listen with a scowl and a big lorry-load of salt.
Xyz, as the Chinese proverb says: 一山还有一山高，强中更有强中手。and it is said in Confucius that “each & every individual born with different level of intelligence”. Surely you are well verse in financial investment, it doesn’t mean that you are good in all areas. We are living in a nation to want everyone to do well or at least be able to stand up with dignity, NOT to see anyone in a specific career to be wiped out. Please stop using “verbal diarrhea of those salesmen & saleswomen” being sarcasm.
As Confucius says”己欲立而立人；己欲达而达人＂。好自为之。
Regards
Nicholas Yang
Nicholas,
Don’t you think you are shooting yourself in the head??
As financial salesman & saleswoman, you are supposed to be good & knowledgeable in finance, cashflow, basic portfolio construction, financial protection concepts, understanding of T&Cs of financial products — whether good or bad, understanding of statements / information put out by MAS.
These are basic level stuff — even more so if you’re supposed to be “passionate” and “doing your best for customer”. I can tell you frankly that my nephews & nieces in secondary school can understand all the above quite easily with just a little bit of coaching. It’s not rocket science or doing neurosurgery.
And yet all of the postings here by financial salesmen & saleswomen display their ignorance of basic finance & protection principles, and leave a big question mark over their ethics and capability in properly executing their jobs and servicing clients.
Xyz,
All insurance “salesmen & saleswomen” have passed tests set by highest authority, before they can become licsenced representatives.
Please don’t insult wisdom of all consumers.
Regards,
Yang Chuan Chong(real name, not Ycc)
YCC,
Don’t make my toes laugh.
You’re referring to the lame CMFAS M5, M8, M9 tikam-tikam tests. I took all those exams for fun a few years back and passed all of them on 1st try. Some of my friends can even pass without even studying the study guides.
I looked at the materials in the study guide, and I can tell you that these CMFAS exams are designed for school drop-outs, those who barely passed O-levels, those who get >15 points for their O-levels etc etc.
These are tests to produce salesmen & saleswomen.
Dear all,
let’s be kind & gracious to one another, any good policy or product from government must be explained through whatever means of media, including Blogs with proper & good intention so that can serve consumers well.
It’s not to be used to reflect downfall of or ending of a specific career, if any reader, including blogger who set up for such purpose need to ponder is it set out properly. if he is not sure, I suggest seeks “Trusted Individual” for help before does so. Else a good product by government ends up being mistakenly understood as means for bad intention.
Regards,
Nicholas Yang Chuan Chong
Im short. You are negatively driven (anger, ego, self righteousness) instead of positively motivated (passion for your job) and therefore you have a skewed perception of yourself and industry. Actually you are the one who should quit and find peace.
You are saying highest authority spends millions of $ to train & to issue Liscence to all the financial representatives, and it ends up most of them “cheat” consumers & consumers are happy about it? Then something must be wrong with our education!!
Emmm… I think this statistics is only reflects small portions of the total number of products & plans being sold out, because it doesn’t give specific details, just like I use my real name in all occasion!
And no one can liken financial diagnosis with medical diagnosis, they are totally of different nature.
Regards
Nicholas Yang Chuan Chong
Xyz,
It was typo error, I mean “financial salemen & saleswomen”
Apology for the misunderstanding caused
Regards
Nicholas Yang Chuan chong
So when coupon rates rise:
– SGS prices drop
– SSB price remain -> I can sell back to the government and buy newly issued SSB.. But my “step-up interest” will start from 0-year again
When coupon rates fall:
– SGS prices rise
– SSB price remain -> I cannot benefit from the capital appreciation of bonds. Best option is to hold on to my SSB.
Think there isn’t a clear-cut winner among the two? I am a layperson… just trying to check if my understanding is correct.
Arthur Pan
that is why it is a saving bond with its investment features taken out.. no capital gain/loss..
2 more things to address
1) u shud be looking at new issuance yield.. or current older bond yield
2) u sell back to govt and get paid for the interest due.. hold 2 yrs, get 2 yrs bond yield.. Fair. =)
no clear cut winner.. i expect bearish mkt from sep onward.. I prefer standard bond.
My Comments can not be revealed to one who has no ability of discernment, that is to use good government product as mean to proclaim end of fate of specific group of career. It is in hidden way that only the fool can understand, but not the wise.
Regards,
Nicholas Yang Chuan Chong
While I understand there will be black sheep in every career, you clearly detest financial advisors. Maybe you had been misrepresented by them, or received a terrible service. Either way, I pity your encounter, because no one can deny the importance of insurance. Human will fall sick and human will die eventually. Hopefully when it’s your turn, you are adequately covered.
Writings are on the wall or walls everywhere…hahaha…it is time the snakeoil insurance salesmen and women start looking for the jobs that they were trained and NOT the get rich quick insurance industry. If you are wondering where to get these jobs there are plenty In the F&B and Security industry……as cooks if not cleaners or toilet cleaner to start with. For those who have been long in the financial security can go for the security jobs with CERTIS or factories who need CMFAS trained to provide the security to their properties. No offence meant….that is what most of you are suitable for…look at the positive side…it is still security although security of property , right? you don’t worry about the balance Score Card KPIs…don’t worry about ETHICS, fiduciary duties, competence, etc etc.no need to struggle with them or circumvent them.
How can the CMFAS licensing exams which dogs and cats can pass turn you into financial experts ? Come on…salesmen at best if not snakeoil salesmen, right?
The writing is on the wall…..remember change is constant but survival is not mandatory.
Wilfred is absolutely right about the financial or insurance product salesman jobs vanishing….tell me what have you salesmen and women done for the consumers in the last 50 years? advising and planning ? putting your customers interest first? Why are they still under insured? Why are they unable to retire? Their losses in the CPF are still not recouped till this day, since 2001. No wonder so many CPF members can’t meet the minimum sum. What noble job you have done!!!!!
Come on, don’t kid me….you are attracted by the easy and big money you can rip off the unwary gullible consumers . Why are accountants, engineers, lawyers, even dentist joined the industry? Why? Aren’t their jobs noble ,good paying jobs, of high social standing? Why come to peddle life insurance products? Hahaha , it is well known , even recruiters pitched this line…..you can earn sky the limit commission…How? the managers will teach you how to earn four figure…ok lah ,,just push high commission wholelife, regular ILPs or the scam endowment products…the managers are also thinking of his or her overriding coms, right?
I don’t mince my words….the industry is full of conmen and women…Ask yourself why FAIR is needed. To put it bluntly, it is to cleanse the industry…it is not NOT just some black sheep….there are plenty and are as many as 70%….black sheep as defined as those who are dishonest and those who are incompetent…I repeat…tikkam tikkam CMFAS cannot turn you into financial experts…if it can my pets too can qualify for a license to peddle financial products. Maybe you see them in mdrt convention next time but don’t be shocked
大家复活节愉快！
别胡言乱语，兴风作浪
多言无益，且拭目以待
水能载舟，亦能覆舟
我想问问大家，这么形容恰不恰当？
Mystery Shopper –
女便衣假扮妓女 － 另类心态？
尼古拉斯.杨
Please be polite,,Post in English so that everyone can and understand your opinion. Don’t HIDE behind the language I CANNOT understand.
That’s why I always say those cannot make it in proper jobs and those with lousy grades and certs will usually end up in financial & property sales. Most of their transcripts showing Cs and Ds. Many with 3rd class degrees, and degrees from unheard-of unis. Even more w/o degrees and with non-marketable diplomas and NITEC with plenty of Cs and Ds. GPA usually below 2.8
Like other professions, finance in Sg is hogged by scammers.
It is a who you know get in biz.
Top shot says “No need degree.”
Do you write stories for public to read?
You need “As” for that!
How can I buy this bond?
The singapore Saving bonds will only be available later part of this year and can only be purchase from the government.
Thanks Wilfred for sharing this Singapore Savings Bond. As with the rest of your articles, it helped us understand more about Financial Planning. Singaporeans really need more of such educational materials. It is kind of sad that we have a world class education teaching things that we may not use in life, but didn’t teach one of the most important topic in life – managing one’s finances. Keep writing. Thanks.
Hi Wilfred,
Thanks for sharing the information and your insight. I’m curious, is it possible at any point that buying SGS or T-bills bonds would be a better option compared to buying this new Singapore Savings Bonds? Or is it generally better to buy the new SG Saving Bonds in all cases?
Thanks in advance.
We have to wait for the actual launch to see whether is it worth to buy.
How come no financial salesmen or saleswomen with their super-duper tikam-tikam exams answer this simple question?!?!? Must be either stupid or no commission.
My niece in Sec 3 can answer this question easily. Just think of the current interest rate environment, and the possibilities of it staying the same, going down or going up.
Morning everybody! There is a Chinese proverb “夏虫不可语于冰”
Which means the insects born in Spring & die in Summer can not apprehend what snow is”
And a piece of advise for you who bark non-stop to insult the commission-based salesmen & saleswomen, DON’T be the big BAD wolf in the story of “The 3 Little Pigs & The Big Bad Wolf”!
Else you know the end of the story, don’t you?
Nicholas Yang
Sounds like an interesting plan comparable to CPF and yet have the flexibility of liquidity. Hope the actual details in 2nd half of 2015 will come out with more info especially the cap amt and %.
One insurer ceo called his agents ‘super duper’ salesmen although these agents have fancy title like Senior financial consultant or Executive financial consultant. The question is why did this ceo give his salesmen title “financial consultants” and then called them Super DUPER salesmen? I checked the meaning and I realised he was right or he was admitting that his agents were all “DUPERS” of their customers’ financial future by peddling them wholelife ,endowment and regular ILPs which NEVER EVER can achieve their goals except the insurance companies’ and the agents’ goals and his agents were very very super at it.
MAS must regulate all these fancy titles and must not allow insurance companies to call their insurance agents or imply that they are financial experts when they are only salesmen and women peddling snakeoil products..It is unethical and misleading to dupe customers into beleiving that they are dealing with financial experts when they are not. They are only financial product salesmen and women.
That ceo very successful in changing the culture of the company into one resembling his previous UK company — famous for high salesman commissions and expensive products to kertok their customers. Salesmen & saleswomen utilised the former good name of the company to con & sweet-talk unwitting victims like flies into venus fly-trap. This company products now have the lowest annual bonuses in the industry (very very low guaranteed returns), and are no longer the cheapest. After a few years of monthly 5-star hotel buffets for salesmen & saleswomen and rewarding the top salesmen with free trips to Spain, and Gold Coast Australia, and other posh overseas holidays, this ceo jumped to become unionist and hob-nob with people like lim swee say & chan chun sing.
Haha, you know this ceo too…great pretender and actor he was. He was pushed up and given a cubicle with a secretary only to mark his days there and soon it will be a dejavu for him.
You know he forced the agents who were afraid of selling ILPs and he turned them into investment ‘experts’ by offering high com and made it a condition for the Spain incentive trip. How powderfool , right? And the super duper salesmen really overnight became “investment experts “and sold but NOT advise, alot of ILPs because of the trip and some even began to tour the branches to give lectures on ILPs… Gosh, these super DUPER salesmen must have made a lot of victims..This goes to show who these salesmen are….putting the customers’ interest first? my foot… Hope the long arm of the law will catch up with them, even at their death bed.