My office is at an industrial park. During lunch, I observed the customers at the canteen. They mostly work in the factories and earn a modest income to feed a family. They have children and financial commitments. They work hard and have useful skills.
They probably do not have much time to plan or worry about the future. Their biggest risk is the loss of the job. If their employer's business does not succeed, they will be retrenched and have to look for another job. For many people, it would be difficult to find another job that would replace their modest earnings. There is probably nothing that they can do, but to hope for the best.
The next risk is setting aside sufficient savings for their retirement needs. It is already difficult for them to have adequate savings set aside from their modest earnings, given the high cost of living. But, many of them do save for the future. The danger is that the may be cheated from getting a decent return. The financial institutions have developed many "innovative" products that have high charges, usually non-transparent, and give a poor return for the customers.
Some of these products are risky or are downright scams. But the ordinary workers are not in a position to recognize these unfair products. We should not expect these ordinary workers to be financial experts. It is the job of the regulators and the political leaders who have the responsibility to look after the welfare of the people who elected them.
The top priorities for the next decade is to give the security of a job that pay a modest but fair income to ordinary workers and the means for them to set aside savings that can give them a fair return for the future.
Tan Kin Lian
It is sad that these people need the help most and yet are easy victims of insurance agents. With very little saving they have to think of spreading between adequate insurance protection and saving.
ReplyDeleteI know of worker who was sold a $20K wholelife product by a female agent.
I am wondering what the $20K can do for him or his family but I know what it can do for the agent.The agent stands to earn at least $300 for first year commission.
Did the agent care about the financial consequences if this bread winner were to die?
It is very glaringly obvious the interest of this worker was never at the heart of the sale.
What does MAS have to say? This is the typical example the insurance agents are doing , product pushing for commission at the expense of the client. Unless MAS does something the majority of consumers will suffer in the hand of insurance agents.
Commission and conflict of interest
are the evils that are behind every sale of insurance agents.
Dear Mr. Tan
ReplyDeleteHow about
(1) make all basic personal insurances (such as unemployment, medical, term insurance …..) be compulsory to all the working adults and their dependants
(2) and all these basic personal insurances to be provided and run by a non-profit organization (such as CPF board).
Do you think that the above proposal is feasible?
Yeah, agree with the commissions and conflict of interests. Problem is that S'pore is being run like a profit-oriented company. Thus policies and activities that encourage transactions and GDP are seen as good; the larger the $$$ amount of the transactions, the better. Nevermind if some of these transactions are questionable and detrimental to consumers.
ReplyDeleteE.G. Why do you thing performance in the insurance industry is measured by amount of premiums collected (especially regular premium-type products) and by number of policyholders? Never by amount of coverage or the median coverage per policyholder? Becoz the size of premiums translate to profits and commissions, whereas size of coverage is actually liabilities to insurers.
As for job security, the govt should seriously control the influx of foreigners and PRs. The argument that companies have shortage of manpower flies in the face of 6% unemployment amongst citizens. As for driving up business costs if not enough foreigners, this is BS. I have friends working in MTI, EDB, Spring etc. and the biggest component of costs for MNCs and SMEs are property and rentals, infrastructure/capital costs. MNCs especially, do not come into S'pore because of cheap labour. The fact that we have plenty of cheap foreigners is just a bonus for these companies.
The mainstream media has just highlighted that PMETs have been the hardest hit in this recession, something I have observed since beginning 2008. A big reason is due to the large numbers of foreigners and PRs taking on administration, IT, engineering, executive, sales, technician jobs. Most of them are no better work-wise than citizens. Just that they don't mind asking for much lower pay, since it is still enough to cover their costs and leftover savings still bigger than what they can get in their home countries.