Tan Kin Lian's Blog: Future bonus of NTUC Income

Sunday, September 16, 2007

Future bonus of NTUC Income

Dear Mr. Tan,

From my personal experience with (name of company), I think their agents and overheads are very "well fed".

I bought their investment product. From their annual report, most or all of the funds are put into fixed income instrument. At the end of the tenor, I got less than the initial amount I put in despite that it is a guarantee product (the agent did not mention the high distribution cost upfront).

After which, I never bought or like anything from that company.

Now, with the change of CEO, I am quite worry about my future insurance bonus with NTUC Income. I think you are still the best so far.

REPLY:

I hope that NTUC Income will continue to operate on low cost, and for the benefit of its policyholders. I also have many policies with NTUC Income. So far, I do not have much concern.

3 comments:

Anonymous said...: NTUC Income is going all out to be number one at all cost.It is giving itself a short time frame to achieve it. This goal is public knowledge .It is do or die.
Looking at the way the marketing campaign is waged the bill would be enormous. Simple accounting will tell you expense and profit are negatively corelated.It means profit will be reduced. It means bonuses will be affected. It means it is spending yesterday's accumulated fund by the former management.
As Income policyholder, I hope it is not pursuing personal goal at the expense of our goal.; September 17, 2007 9:11 AM
Anonymous said...: Yes, I share your concerns. The present CEO should not be spending funds accumulated based on the good record of the former Income so lavishly now on advertising. This of course will make the newspapers very happy to have so much funds coming in but what about all the policyholders out there who has frugally supported Income thinking that it is a frugal company. I second your sentiment that it should not be pursuing their own goal at the expense of our goals. Stop the Rot!!!; September 17, 2007 9:17 PM
Thomas Phua's Blog said...: This particular case cited is probably the Dynamic Guaranteed Fund, managed by SGAM.

It was launched then in 2001 and was a very promising fund managed with proprietary program as bragged by SGAM.

Then Mr Tan, as CEO smelt the rat and offered a solution for policyholders to switch out to Combined Funds or other funds without penalty.

Many risk adverse policyholders insist on the principle guarantee and did not want to switch and maturity was with miserably few hundreds above principle.

Those who switched out to Combined Fund since 2004 has at least 30% growth.

Then Guaranteed Fund was very popular amongst many and many banks offered it as well. Most matured with less than principle.

This Dynamic Guaranteed Fund matured wthout lost in principle.

Of course, those who gained from Combined Fund, sang praises of Mr Tan.

Those who held on, curse and swear.

- Thomas Phua; September 19, 2007 10:59 AM