Monday, December 08, 2008

Association to educate consumers on financial service

Several people have asked me to form an association to educate consumers and help them to identify and buy financial and insurance products that are of good value. This will reduce their exposure to bad products such as the credit linked notes and high cost life insurance products.

Is there a need for such an association? What name is suitable for this association? Please take part in the poll on the right panel.

22 comments:

  1. Good idea. I have voted for CORE.

    I have also posted this in 3in1Kopitiam forum to get more ppl to participate.

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  2. Hi Mr. Tan:

    Singapore Kopitiam supports such an initiative.

    Such an association can run regular seminars delivered by financial experts and make their texts/videos available on a blog.

    Regards,
    Victor Sun
    Singapore Kopitiam - Voices of Singaporeans
    http://forums.delphiforums.com/sunkopitiam

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  3. I suggest that this association not only provides education on finances but also has a division to help review and vet insurance policies, investment for members/public for miss-selling, misrepresentation and inappropriateness of the products..
    A nominal fee is charged. If there is misconduct or inappropriateness a recommendation to customers to take action against the insurance agents/advisers/consultant, to complain to the insurers, to CASE/FIDREC and finally to sue the agents and FIs.
    This will be a good service because there are many consumers who have been miss-sold by insurances agents who push products and consumers don't know it until many years down the road which makes cancellation a dilemma.
    Example.10 out of 10 who bought revosave have been miss-sold or misrepresented,. This can be proven easily.Customers are tied down for many years and any cancellation will incur a big loss and holding it to maturity will also guarantee a big loss if adjusted for inflation. Any WL products where clients' interest is not taken into consideration is considered miss-selling or ILPs where the riskiness/disclosure of charges is not explained.
    This review service will help policyholders to be aware of the finer details of financial products, its application and purpose and thus also an education for them of their right to competent and responsible financial advice.
    The division is staffed by qualified, honest,independent, objective and competent financial planners and lawyers and CPAs.. This is a voluntary service like FIDREC.

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  4. What about
    Singapore Consumers' Association for Research(Review) and Education (SCARE).
    This will really 'scare' the hell out of the unethical insurance agents or financial advisers who will think twice about pushing products that will inevitably lead to miss-selling and misrepresentation.

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  5. this is my sincerest advice, i think some wont like the sound of it, but its a useful alternative perspective IF some find so

    I dont see much results from trying to set up this proposed Association

    Someone can try moot this idea to the Public Offices, but then they also understand fully why they SHOULD NOT do so

    Simple reasons:

    1. The Association CANNOT refer to specific identities when making references, meaning they CANNOT differentiate or distinguish between any 2 or more entities, thats a very touchy legal minefield waiting to explode (or implode) at the first mistake, be it comparision, critisism, or even plain 'feedback'
    ..further imagine a top mgmt or even a simple Consultant appointed who was a former Bank X Executive or Board of Director, but you couldnt just hired any man off the street isnt it??

    2. The Association CANNOT provide an educational course WITHOUT approval and registration of its parental supervising entity, BUT with those credentials who wants to oversee this ticking timebomb? MoF? EDB? MAS? Spring? MoE?

    3. Without any the above - a firm basis of establishment and the necessary social political backing, the Association risks running into poor financial standing pretty soon, either due to lack of consistent funding channels (and they cant collect rights or licensing, or co-branding from industry without backing), OR worst (and likely to avoid an early demise), it has to start to accepting possibly dubious, or at best questionable sponsorships from the very industrial players its supposingly to be 'educating the public' about.

    Imagine the Road from there hence even if it was to survive the first waves and storms of outcries after ANOTHER outbreak of such financial debacles as the ones faced right now

    Has it been 'educating the wrong thing'? What is a 'wrong thing'? So can it help with compensation? Is it pressured to help'? Even then, does it have the 'right, competent, responsible, honest VOLUNTEERS' armed with the right legal resources?...

    Hmm

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  6. good suggestion of 6.08pm.the association can also serve as a role of supervisor to supervise whether is there any high rish or unnessary investments of the banks and govt.

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  7. The minibond saga is good enough education already!! If this cannot help to educate, nothing else can.

    For those who suffer losses, they learn it the hard way. For the rest they learn through other people's mistakes. (best way)

    Learn from Mr Tan's blog, Hong Lim rally or even read the papers. If people don't do any of these, even association and what-not will still not be able to reach or help them as well.

    So no need for association.

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  8. The association is for education and research on all financial products, ie insurance, unit trust, structured products and so on.. This is to create awareness of the good and bad products and what the consumers should get when they deal with the advisers , insurance agents and RMs.

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  9. teach people to read blogs, and write, asking quetions over blogs is key ...

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  10. Hi Mr Tan,

    I think the idea of such an association is good as Singaporeans face a myriad of financial information everyday and we do not know how to filter out the accurate facts from the misrepresented facts.

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  11. V Good idea.
    i would vote foe FISCA


    Retiree 65

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  12. Who will supervise the Assocation and ensure it does not end up pushing so-called "simple products"?

    Our regulatory framework is already enough. MONEYSense supposed to does its educational job. But the problem is that MAS is not exercising is regulatory power and MONEYSENSE seems to lack the authority educate and advice on specific insurance and investment matters. So far it only touch on easy stuff like cash flow and CPF (risk-free) matters.

    We do not need another entity like an Association. We need to help MAS to wake up and help MONEYSENSE to do a more practical job to move into day-day issues like insurance and investment problems.

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  13. who's going to fund this association?

    getting people to do the research, analysis, understanding, recommendations....need money

    i doubt singaporeans will pay for this

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  14. Yes , the association should help policyholders to check if they have been recommended the appropriate products.It must also provide objective review to see if they have been misled or misrepresented.
    Guide consumers on procedures to seek redress from miss-selling and other misconduct by insurance agents and RMs and other legal recourse for compensation .It is time consumers are aware of their rights. The insurance agents are not what you used to think of, the respectable salesmen who 'helped' you with your risk management.They are wolves in sheep's clothing. They have cheated you without you knowing it and sold products that benefit them and not you. They get to go to overseas trips and earn those dubious titles.
    It is pay back time for insurance agents or whatever new titles they have taken on. Financial consultants , senior or executive they are saleswolves in disguise.
    The association will support and push for change in the remuneration
    system from commission to fee based
    and also the way financial products are sold and consumers' needs are approached.It must press for product selling to be banned and make need based compulsory.
    To convince MAS this is the way to get rid of miss-selling and misrepresentation for product selling and pushing is the cause of
    the current debacles.
    I will support this initiative.It is timely. It is the best of times to make it the worst of times for the errant insurance agents and salespeople.

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  15. Great! This is helpful.

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  16. After seeing and hearing that tens of thousands or even more lost their hard earned life savings through the banks and financial institutions, I strongly feel that there is a need to set up an association to safeguard our future generations from these shameful manipulations.

    It must not link or have any affiliation, otherwise the reason for setting up one is not to benefit the consumers but another redundant avenue that exhausts manpower, money and precious time.

    I believe you can do it and your upright team will be behind you should you embark this task. I give you my support.

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  17. Someone sent an email to tell me that many insurance agents voted for "no need for an association", as they feel threatened by this consumer association.

    There is a role for insurance agents to serve the consumers. I hope that they will come forward to provide financial advice for a fee.

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  18. Because insurance agents see hard time ahead for them. They can't bullshit the consumers anymore.They see their ill gotten gains going up in smoke.That is why they are resisting.
    Mr. Tan, you have done a great service to consumers and they will be grateful to you.

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  19. I agreed with Everlearning.
    Further more to add is that to make sure no PAP people come and control this association.

    It must be a independant association.

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  20. I would like to suggest CARE - Consumer Advice, Research & Education.

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  21. Insurance agents are scared that the association will expose their unethical practices. Many agents will be in trouble if their clients' polices are subjected to review by competent financial planners. I am sure a lot of miss-selling and misrepresentation will be thrown up.
    Good for the consumers that they know earlier the rubbish, the miss-selling by their so called trusted sincere agents.
    I support the setting up of this association.

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  22. i heard from some agents that if the association has insurance policies review section many agents will get into trouble because many anyhow sold the products to make money. Even top agents will be in trouble. in fact they are the worse. They are afraid. Some of them think of leaving the industry.But it is not easy. It doesn't mean they can escape the long arm of the law if they have committed misconduct, cheating and mis-selling.They cannot hide. They must only pray that their policyholders don't seek the help of the association to review their policies because the review can uncover the misdeeds of the agents.
    Having a review panel of experts to help members to check their insurance policies and investment is a good idea. This will improve professionalism and insurance agents cannot ho how play play with clients' future.
    I will be a member.

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