Someone asked if it is possible to buy term insurance and family income benefit directly from an insurance company through an internet portal.
So far, the insurance companies in Singapore have been reluctant to offer this channel, as they are afraid of upsetting their insurance agents. I hope that this will become possible in the near future. There are many websites in USA that offers term insurance at very competitive rates, much lower than in Singapore.
MAS planning to start a Financial Literacy Institute soon. What is the objective? Can it work? Will people attend classes to understand insurance, investment and all the financial products and manage their own portfolio? Maybe a handful, 1% of the consumers will take the trouble and out of interest.
ReplyDeleteEven they conduct courses similar to what insurance agents and RMs take to be licensed the investors will have a hard time time to DIY becuase the insurance agents themselves also don't know after going through the courses.What do you expect of the investors who are not using it for a living?
There is another question , how many Can understand?. Don't think life insurance is easy to understand and how to apply them to individual needs.The insurance agents themselves are NOT qualified even after the courses.
My personal opinion is MAS is shirking its responsibility as regulator. MAS is evading the important issues of bringing the errant FIs and agents and RMs to justice. MAS hopes to distract.
MAS HOPES TO PASS THE ONUS TO INVESTORS AND APPLY CAVEAT EMPTOR to protect the FIs and their gang of thieves.
Consumers will be on their own and will be the losers without a recourse. It will be caveat emptor and investors have to open their eyes big big and be on the guard against the financail product salesmen.
If MAS wants Caveat Emptor , MAS must force all FIs and insurance companies to have online portals offering NO LOAD INSURANCE AND INVESTMENT PRODUCTS. Then investors who buy the products KNOWINGLY AWARE what they are in for.STOP HAVING INTERMEDAIRIES LIKE INSURANCE AGENTS AND RMs as middlemen becuase these salesmen are OFTEN the cause of mis-selling, distortion of facts, high pressure selling, misrepresentation and cheating. Without them there is NO UNDUE INFLUENCE or manipulation.There is no exploitation of the trust consumers have of their agents.
Then it is truly fair that investors have to open their eyes big big.
The Institute is a distraction and will not help much. MAS is passing the buck to the investors and perpetuating and endorsing the malpractices of the FIs , the insurance companies, the agents and RMs.It is doomed and investors must not beleive that the institute can help you understand.
Why should you educate yourself and still PAY COMMISSION to the agents who don't add value? It is a mockery. it is idiotic.
The best approach is to lay down rules to make it the responsiblity of the sellers to ensure that the products recommended is of reasonable basis,ie that meet the clients' needs fully and if they are not the sellers are laible to be prosecuted for misconduct and breaches. Remove the commission so to eliminate conflict of interest. Lastly, MAS as the enforcer of these rules and police the FIs and their 40 thieves to make sure they all behave as instructed.
The Watchman
hi mr tan i read from news that mas say there will be a new insitute to teach people how to manage their money. i thought you have set up one already. why need another one?
ReplyDeleteWatchman,
ReplyDeleteYou're right about the standard MAS-mandated exams as being inadequate for competent & qualified financial planners/advisers.
I have the usual M5, M8, M9, HI, BCP, PGI for either work requirements or personal interest. And I can say that the syllabus / information is very generic, sometimes wishy-washy and does not address proper methods of performing real financial analysis and planning for families and individuals.
These exams are all MCQ and geared towards 'O'-Level qualifications. Most agents just tikam their way through, as there is no maximum number of times a person is allowed to sit for the exams.
A person with real interests in finance, investments and financial planning will be able to learn more from self-study (borrow from library!) and the web.
As for ethics & integrity, you can't teach these. The only way is to impose mandatory practices to minimise corruption of integrity, such as (1) total removal of commissions and (2) explicit highlighting of expense ratios, fees, profit margins and deductions of all the products. No more hiding behind the Effects Of Deductions tables that 95% of agents will skip over or bullsh*t about.
Hi Mr Tan,
ReplyDeleteCurrently I only know Income website that still allows buying of term insurance online. You may know this product as i-Term, but online purchase restricted to maximum sum assured of $200K. Also if you want to add riders such as Critical Illness or Hospital Income, you need to talk to agent in person.
Furthermore, after the revamp of Income website (Re-Branding exercise), it is not so easy to get to the online purchase screen for i-Term. The "Buy Online" section on the main screen does not mention i-Term --- you need to know about it and go directly to the i-Term page.
LUV is another quite good term insurance you can buy online on Income website. But it is Group Term and you need to be Union member.
Other group term insurance such as SAFRA, HomeTeam & Public Officers you can just print out the application forms and mail them in. So can avoid dealing with agents if you don't need their "advice".
All these Term insurances are left over from the good old NTUC Income days. In a way they are like doing NS in the insurance industry. especially the Group insurances. I won't be surprised if the new mgmt would rather not have all these products. How to compete in LIA's quarterly Weighted Annualised Premium Indicators? ha ha!
This is available in the US for years. Check out portals like www.termquote.com.
ReplyDeleteask ntuc to sell more capital plus that pays 1.4% for 2 years to be number 1. They think there are a lot of idiots out there. That is the problem . They dump on their own policyholders.
ReplyDeleteAnon 11:02pm
ReplyDeleteCap plus of 1.4%pa lock-in for 2 yrs is actually not a very good deal. Minimum shld be at least 1.7%pa. Sometimes I tell clients to consider money mkt funds which are still able to offer 1.2% to 1.4%pa, with no lock-in and no sales charges. Obviously not ntuc's money mkt. So I end up chasing the customers away.
Ex-Con
If you chase away the customers how does ntuc become #1, eh? If 1.4% can bluff or con own policyholders why not? The loss due to inflation is not ntuc or the agents' concern.
ReplyDelete