Be wary of dishonest agents

A dishonest agent will tell his client that his company has introduced a new policy that offers better benefits, and get the client to switch to the new policy - allowing the agent to earn a fat commission again, at the expense of the client. Read this article and avoid being fooled by a dishonest agent.

Opposition participation and the coming election

Read the views by Patrick Lee, an astute political observer:
http://www.leesjuanpatworld.blogspot.com/

Quote
And the playing field has never been so inviting to the opposition than now. Even the illiterate uncles and aunties in hawker centres and void decks were discussing how difficult life is now with everything becoming more expensive. Even the ordinary folks are saying PAP is hoodwinking them.

Unquote

Suzy Orman

Suzy Orman is a financial adviser who hosts a weekly program on  CNBC. She gives advice on investment, insurance and financial planning. She has strong views against insurance policies that are bad for consumers. Read her views here.

Public talk by Dr. Jacques Attali

On the 13^th of January 2011 we are organising a ‘Public Talk’ by the French economist and writer Jacques Attali, one of the top 100 public intellectuals of the world.

This event is co-organised with the Institute of Southeast Asian Studies (ISEAS).

Singapore Foreign Minister Mr George Yeo will be present in this event to introduce Dr Attali.

This will be an open session where people from different walks of life living in Singapore would get an opportunity to interact with Dr Attali.

The topic for discussion: “Is The Global Economy Still In Crisis?”

The venue of the event is the Ballroom, Raffles Hotel (13^th January, Thursday, 10.00 am to 12.00 noon)

register on our website at www.asef.org 

Practical Guide on Financial Planning - case study

Here is a case study of a person who has read the book, Practical Guide on Financial Planning, and has a few follow up questions on how to apply the principles in the book.

Ask Mr. Tan

By reading the book and considering how to apply the principles, the consumer is able to have a good understanding of the subject and make the right financial decisions, with confidence. The book can be purchased here.

Standard of postal service

The standard of postal services seemed to have deteriorated. Some citizens have complained in the past, that Sing Post is now engaging in too many business activities, in the quest to boost their profits, that they are neglecting their core functions.

Read about the recent incidents of poor service in SGEP.

Blatant cheating (3)

An unwary consumer was cheated by an insurance agent into buying an investment linked policy (ILP) with an annual premium of $40,000. She thought that she was investing $40,000 in a unit trust. The agent assured her that she would get a better return.

She did not know that the annual premium ILP would take away more than 1 year of her savings. She was not given the benefit illustration and did not receive the policy document. The half yearly statement showed by the insurance company indicated the fund value to be quite close the the invested sum, but the surrender value to be only 10% of the fund value. She did not understand what the surrender value meant.

When she asked the agent for explanation about what was happening to her investment, she received vague and evasive answers.

MAS relied on the board of directors and top management of insurance companies to have a process to govern the behavior of their insurance agents. It is not clear about what is required to be done.  Surely, if someone buys an ILP with an annual premium of $40,000 and the insurance agent (and agency manager) is likely to earn more tan $40,000 in commission, an enquiry should be carried out to make sure that the customer is aware about the surrender charge?

If this is not happening, what is the MAS requirement for? Is it just to appear good? Is MAS interested to know the details of this case? Will their official, who is monitoring my blog, contact me?

Tan Kin Lian

Comparing whole life and term insurance

Lorna Tan (Sunday Times Money Page) gave a bad comparison of whole life and term insurance. The whole life policy insuring $500,000 cost nearly $11,000. She said that the term insurance policy (insuring up to age 99) cost $3,300. This is the line of reasoning used by insurance agents, and in a dishonest manner, to get people to buy whole life insurance.

The proper comparison is a 25 year term insurance policy, where the annual premium is $800. The balance of $10,000 can be invested in an indexed fund to earn 4% or more over the next 30 years. It will produce an accumulated savings of more than $500,000. By that time, there is no need for life insurance - as the accumulated savings is more than the sum assured!

By buying a whole life policy, the consumer will have a cash value that is 40% to 50% less than the accumulated savings. Why give so much of the savings away in a whole life policy?

Tan Kin Lian

Courts charged 36% on installment payments

Some time ago, I saw an advertisement by Courts about the cash price and the installment price of their products. They used a standard formula. The interest rate embedded in the installment price is 36% per annum.

Consumers may not be aware about the high interest rate that they have to pay for installment payments.  They should consider saving the money and paying for their purchase in cash, to reduce their cost by 36%.

I do not know if Courts is still charging this high interest rate now. I shall check when they next have their advertisements in the newspapers.

Tan Kin Lian

Computer buyers sent on a wild goose chase

Monica Lau wrote in the Straits Times about an advertisement by Courts Bukit Timah offering a Dell notebook from $399. After taking the trouble, "braving the rain" to be at the store, she found that there was no such offer. The only Dell notebook was being sold at $999.

Was this a misleading advertisement? Are there anybody who takes action to address these complaints? Is this another example of the "buyer beware" culture?

US to extend tax cuts

President Obama has proposed to extend the Bush tax cuts for two years, in return for the extension of unemployment benefits. This is great for Americans, but is bad for the US deficits. How is the US going to pay for their wasteful spending, without the tax revenue to pay for it? More borrowings from the other countries? Watch for the collapse of the US dollar!

High cost and poor standard of taxi service

There are two letters in the Straits Times Forum about the poor standard of taxi service in Singapore. Taxis are not available on rainy days to pick up passengers at taxi stands or on the road, but they become available on taxi calls,where a large surcharge had to be paid. Commuters have been asking the authority to act against errant taxi drivers.

This type of complaints had been aired on countless occasions in past years. Nothing has been done to address this situation. It is not possible to rein in the errant taxi drivers, who have their own side of the story to tell. They have to pay high taxi rental fees and need the surcharge to make a living.

This is Singapore! Everyone is in the business of ripping off the consumers to make the extra buck. This is why citizens are complaining about the high cost of living in Singapore. And this is possible in the pro-business culture   that is being encouraged by our government of the day.

What can be done to improve our taxi service? I have written a letter to the Straits Times. I hope that they publish it.

Tan Kin Lian

Excessive charges to boost profits

I read the reply from the Executive Director of the National Dental Center of Singapore. Dr. Kwa said that the fee for the medical report reflect some of their cost. It seemed to imply that the other part of the fee is to make profit for the center.

The situation in Singapore has become very bad in recent years. Many corporations, private and public,  find ways (and excuses) to increase their profits, imposing a high cost on consumers. This is made in the interest of increasing productivity, efficiency and service. In reality, it is ripping off the hapless consumers in a deregulated environment. It is also unethical business practice, but has become a habit in Singapore.

When will our government leaders wake up and find out why the citizens are complaining about the high cost of living, and the high cost of operating a business in Singapore?

There was a time, in a more ethical environment, when corporation give incidental services free or at a nominal fee. There were not allowed to make profits from these services. I wish to go back to these good old days.

Tan Kin Lian

Enjoy discounts on books

There are two book bundles giving attractive discounts:

a) Bundle of 5 books - with 40% discount
b) Bundle of 3 copies of Financial Planning book (buy 2, get 1 free). Three friends can share this discount.
c) Bundle of 3 books (book 1, 2 and 3) - Wisdom on how to live life - Dr. Tommy Wong

Available at www.tankinlian.com/ishop

US needs more quantitative easing!

It is frightening that the US needs any dose of quantitative easing. Although the first two round has caused havoc around the world - asset bubbles in Asia and the potential of the collapse of the US dollar.
SGEP

Social safety net

Does Singapore have a good social safety net? Read Ng Kok Lim's reply to PM Lee.
SGEP

TKL Tips

Tips on financial planning, buying insurance and healthy lifestyle can be found here.
http://easyapps.sg/learn/

More topics will be added later.

Avoid insurance agents

I wish to advise consumers to avoid insurance agents (unless this is someone that you know and can trust). I have seen too many cases of insurance agents cheating on unsuspecting consumers by telling blatant lies. (There are many cases where they used half truths, which is also dishonest, but not as bad as blatant lies).

This statement may be unfair to some agents who act honestly and take care of their customers' interest. But it is difficult for consumers to tell the honest agent from the dishonest ones. This situation is made worse when the the dishonest agents are allowed to get away scot-free by asking consumers to sign blank forms. Some of the life insurance policies are clearly unfair to consumers, with excessive charges that seem to be designed to rip off the unwary consumers.

I urge MAS to investigate complaints of dishonest practices, rather than let the matter be decided by FIDREC as a dispute. FIDREC takes a long time to decide, and does not have the disciplinary power.

Tan Kin Lian

Blatant cheating (2)

I helped the consumer to write the complaint the insurance company and MAS. She was cheated by an insurance agent who sold her an annual premium investment linked policy for $40,000 (the actual amount is higher). She did not receive the policy document or the benefit illustration showing the charges.

A few months after the policy was issued, the investment dropped by 14% (but I don't know if there is a front end charge of 5%). The surrender value, which she did not understand, was only 5% of the invested sum, presumably due to the back end surrender charge. All of these facts were not explained to the consumer. She did not know that she was sold an annual premium policy that had a high back end surrender charge. Clearly, the agent cheated her.

Well, she did sign a blank form - and she admitted that it was a mistake. She admitted that she was naive for parting with such a large sum of money to a person (from a well know insurance company) who promised a higher return than bank interest. She had also invested in unit trust before, but the bank did explain the details to her. In the case of the agent (actually called financial services consultant), she thought that it would have been like a unit trust, but she never knew that it would be an annual policy that had a big back-end surrender charge.

I tried to look for an e-mail in the MAS website for her to send her complaint. There is no such e-mail address. There is a prominent message that all disputes with financial institutions should be sent to FIDREC. MAS should realise that that there is a difference between a dispute and a blatant cheating case, and should have an avenue for consumers to address MAS directly.

I wonder why the insurance company never made any enquiry about an annual premium policy of $40,000. The consumer is clearly not in a position to afford such an annual premium. It represents a large portion of her her hard earned lifetime savings, which is now going up in smoke.

MAS has been relying on financial institutions to act in the best interest of consumers and consumers to be educated. No amount of education can help consumers who can be easily cheated by crooks. I hope that MAS will make an investigation into such types of cheating cases.

Tan Kin Lian

Indisputability clause in insurance policies

This article explains the indisputability clause, and how consumers can be protected under this clause against unfair rejection of claims.


Ask Mr. Tan

Blatant cheating

Some insurance agents cheat their customers blatantly. I have just received an e-mail from a consumer who was asked to invest $40,000 from cash. Originally, she was supposed to invest from the CPF account but was later persuaded by the agent to pay in cash.

She was shocked to learn that the investment had depreciated by a lot for 1 year. Now, she received a notice to pay an additional $40,000. The agent must have sold her an annual premium policy. She certainly could not afford this amount of annual premium.

From her e-mail, she is quite ignorant about the policy, and signed for the policy only on the vague promise by the agent that it will earn a higher interest rate than CPF (which is also a blatant lie, as there is a large amount deducted to pay commission).

I advised the consumer to write a letter of complaint to the insurance company and to MAS and will assist her to draft the letter.

Pay premium for the whole of life

The insurance agent says that you need whole life insurance, because the cash value is so poor that you need to continue paying the premium and be insured for the whole of your lifetime.

If you buy a 25 year term insurance and invest the savings in an indexed fund, you can accumulate sufficient savings over 30 years to stop your life insurance policy. You would have accumulated sufficient savings that will be more than the sum assured. You will not need life insurance any more.

Remember, if you listen to the bad advice of an agent, you will certainly need whole life insurance, because you will never be financially independent. But, if you invest your savings in an indexed fund, you do not need life insurance after 30 years!

Riddle - what is this object?

The rich man needs it. The poor man has it. If you eat it, you die.

Mobile games on Windows Phone 7

I have developed 4 applications for the Windows Phone 7. This link allows you to view the videos of the applications:
http://www.tankinlian.com/Information.aspx?CatID=12


The applications are:

• 4D Simulator - simulate the 4D draws over 1 year and shows how many times your number (including permutations) appear.
• Toto Luck - take your date of birth to generate random numbers and shows you the 7 Toto numbers that appears most often out of 10,000 numbers in the series.
• One in a Million - takes your date of birth to generate random numbers and shows you the 4D numbers that appear most often out of 1 million numbers drawn at random
• Entrepreneur - allows you to play the game of pricing, marketing and capacity for a product against 9 simulated players over 12 months.

These applications will be made available on Apple and other mobile platforms soon.

FISCA talk on financial planning

I gave a talk on financial planning under FISCA. 50 people attended. The majority of the participants are young people.

FISCA is now able to reach out to young people. It is wonderful, as the young people are likely to be the people who will stand to benefit by being educated and avoid giving a large part of their future savings away in a low yield insurance policy.

I encourage young people to attend the FISCA talk (www.fisca.sg/events) and be educated. You will be able to avoid being misled by an insurance agent who is only keen to earn a fat commission at your expense.

If you meet an insurance agent, who is highly trained and persuasive, this is how you can say "No"
http://tankinlian.com/admin/file.aspx?id=273

You should also listen to the videos from Suzy Orman. Although she made her point in the context of USA, the same points are applicable in Singapore. In fact, the situation in Singapore is worse for consumers:

http://www.youtube.com/watch?v=sGDgYLCpnDo
http://www.youtube.com/watch?v=6vnN9liFWaE

Tan Kin Lian

Medishield and Private Shield

Insurance agents scare consumers about the high cost of medical treatment and ask them to buy a private shield. The consumers are not aware that they will have to pay a higher premium, and when they go for treatment, they have to pay a higher co-payment as well. They will be hit twice. Read these articles:
http://tankinlian.com/admin/file.aspx?id=229
http://tankinlian.com/admin/file.aspx?id=183

The agent also use a number of myths to get consumers to make the decision that is good for agents, but may be bad for consumers. Read this article:
http://tankinlian.com/admin/file.aspx?id=287

Apart from paying a higher premium and co-payment, consumers may be hit hard when their claim for reimbursement is rejected due to unintended non-disclosure. Read these articles:
http://tankinlian.com/admin/file.aspx?id=239
http://tankinlian.com/admin/file.aspx?id=190

The only reason to go for private shield is the chance that the public hospital do not have the doctor to treat your illness. I think that this risk is low and is exaggerated. There should be more than adequate facility to be treated in our public hospital.

Those who are well off can opt to go for private shield. For the majority, where the savings is not adequate, it is better to stay with Medishield.

Tan Kin Lian

Unethical methods used to sell life insurance

The wife of an ex-insurance agents describes some of the unethical methods used by insurance agents to get customers to buy insurance policies that harm them financially. She said that her husband might also be a victim as he was misled by his manager. Read:
http://tankinlian.com/admin/file.aspx?id=297

SGEP

Read the views of the Reform Party and the Singapore Democratic Party on the issues affecting Signaporeans.
SGEP

Revival of protectionism?

Tan Kin Lian expects the US to resort to some form of protectionism to solve their economic and employment problems. How will this impact Singapore?

Ask Mr. Tan

TKL Tips

Go to this website
http://projects.easyapps.sg/life21d/

Click on
Tips on Financial Planning
Tips on Buying Insurance

Dividend yield on Singapore Equities

Thsi website shows the dividend yield on several Singapore equities, especially the larger ones:
http://www.investmentmoats.com/DividendScreener/DividendScreener.php One reason to invest in stocks is to get a dividend yield of 3% and capital appreciation. Many shares meet this requirement.

Expensive technology that did not work

The bus stop outside SMU showed the expected time of arrival of each bus service. It showed my bus to be arriving in 7 minutes. It actually arrived after 1 minute. The expensive technology, using GPS and transmitting to the bus stop, was out by 6 minutes.

Bus or MRT

I took a bus from SMU to my home. It is a direct bus. I was able to get a seat. The journey took 30 minutes. The alternative is to take the MRT and change to a bus, which will take the same time and require more walking.
Many people take the MRT out of habit, but if they learn how to take a bus, it can be more convenient.

Housing loans - SIBOR or SOR rates

Read this explanation on the difference between SIBOR and SOR (swap rates).
http://www.smartloans.sg/pages/the-choice-between-sibor-and-sor-rates

US employment report - a source of concern

The US employment report for November showed only 39,000 new jobs created, when economists were hoping for 140,000 jobs. The unemployment rate jumped to 9.8 percent.

This is a matter of serious concern. In spite of stimulus and quantitative easing, the US economy is not able to create the jobs needed to keep their people employed. The problem faced by the US will cascade around the world. We can expect tough times ahead, possibly a double dip recession, maybe even a global depression.

The problem faced by the US can only be solved through protectionism in some form. I expect the US to adopt some protectionist measures, although it does not have to be large scale. This will be a watershed, as the US had been promoting globalization for two decades. The boomerang had swung back to hit them.

I believe that some form of protectionism will be good for most countries. It allows each country to have its domestic economy and develop its own identity and culture. It will allow the income gap to narrow in the country and hopefully, keep the cost of living down.

Globalization has benefited only a small proportion of people, at the expense of the well being and financial security of large numbers of people. It has caused damage to the environment and other negative social impacts, including a declining birth rate. In my view, the benefits of globalization is outweighed by the harmful effects.

Singapore has benefited from globalization, including luring the super rich to avoid taxation by moving their profits here. We will lose this source of revenue, but we can cope. After all, Singaporeans are an educated and hard working people. Let me make a honest living, and not enrich ourselves at the expense of other countries. Maybe, we will see the property prices come down to more affordable levels!

Tan Kin Lian

Living on accumulated savings - DIY

This article explains how a retiree on live on the accumulated savings on a DIY basis, without buying a life annuity.

Wikileaks and Singapore

LKY's private conversation and candid views with US officials have been leaked out in WikiLeaks and is causing some red faces. Read SGEP.

Social insurance and quality of life

The lives of Singaporeans would have been much better if the Government had introduced some social insurance schemes, e.g. old age pension and unemployment relief, instead of relying on "self reliance". The weaker and less educated cannot cope with their current needs, let alone save for the future.  Read this article on Social Insurance.

FAQs in TKL website

Some of my readers find it a hassle to go to the "Ask Mr. Tan" page of my website and search for the article using the keyword. They ask me to give them the direct link.

My purpose is to educate the readers on how to search for the relevant articles and FAQs in my website. It may take a little trouble, but will give them the reward. When they learn how to search the FAQs, they can look for other topics. They may also find some of the recently posted topics (under the Latest tab) to be useful and relevant to them.

Try these links and bookmark them:

Latest: http://www.tankinlian.com/latest.aspx
Ask Mr. Tan: http://www.tankinlian.com/ask.aspx

Tan Kin Lian

Health care and Medishield

 Many consumers continue to send questions to me about whether they should choose Medishield or private Shield. I am not able to answer their questions individually. I refer them to my website, www.tankinlian.com/ask.aspx and ask them to search for the articles with the keyworld "Medishield:" or "health care".

They should also buy my book, Practical Guide on Financial Planning, and attend the educational talks organised by FISCA. They must spend some time and a little money to be educated and save many thousand dollars by avoiding the wrong decisions. They should not ask advice from the wrong person or give incomplete information that lead to the wrong advice, as explained in this FAQ.

Tan Kin Lian

Doing stupid things

Do you know why government and corporate bureaucracy continue to do stupid things that inconvenient the public and their customers, and achieve no useful purpose? Read this story. The trouble is that these bureaucrats are not paid peanuts (unlike monkeys), but draw fat salaries!

SGEP Portal

This portal contains a selection of articles from blogs, local media, international media and party websites, touching on issues affecting the lives of Singaporeans. They are relevant for Singaporeans to make the right decision in voting at the next general election. Visit SGEP daily (it takes only 10 minutes daily) to get the gist of these issues and a wider coverage (apart from the local newspapers).

SGEP

CPF Life Annuity - good or bad?

Many people ask me for guidance on whether they should take up the CPF Life Annuity. How does it compare with the Retirement Account and a life annuity from an insurance company?

Here are the key facts:

1. The CPF Life pays the annuity for life and gives a small bequest to the beneficiary on death prior during the initial period (which varies according to the annuity option. The Retirement Account pays a higher payment and runs out after 20 years. The balance of the account is payable to the beneficiary on death during the 20 years.

2. The difference between CPF Life and Retirement Account depends on how long you live. As you do not know, there is no point in trying to do the calculation of "which is better". The actuary for CPF will do the calculation based on the average lifespan. You cannot be smarter than the actuary.

3. As the actuarial calculation is based on the average life expectancy of people in good health, you should avoid the CPF Life annuity if you know that you are in poor health.

4. There is a bonus payable to most people who take up the CPF Life annuity, so if you are given a bonus, it is better to opt for the CPF Life. If you find the bonus to be too small, say less than 5% of the invested sum, it may be better for you to stay with the Retirement Account.

5. The underlying yield for CPF Life and the Retirement Account is the same, i.e. 4% per annum. This is higher than the underlying yield payable by a life annuity from an insurance company. So, it is better to keep your money with CPF, either in CPF Life or the Retirement Account.

The CPF Life is an example of many complicated schemes that have been introduced by our Government. The general public is confused. This is made worse by the nature of Singaporeans, who are generally quite naive financially, but they like to seek advice from the wrong people on "which is better". As the calculation involve many possible scenarios, it is not possible to get the "right answer".

I hope that the Government will sort out this mess and make things simpler for the citizens, rather than leave the mess  to cause a lot of confusion.

Tan Kin Lian

Zeitgeist movie and Tommy Wong’s book

Read about “Guru Dick” and the concept “We are all one” in Tommy Wong’s book “Wisdom on How to Live Life (Book 1)” and watch them in the movie “Zeitgeist: Addendum”.

The book can be ordered here.

Private shield and Liver Transplant

Insurance agents tell the consumers that the cost of a liver transplant is $100,000 and that it would be covered under a private shield plan.

Before you take the advice of the agent, you should consider the following:
a) What is the chance of needing a liver transplant?
b) Where are you going to find a liver when you need it?
c) What is the total premium that you have to pay for the private shield plan?

Some of the risks, such as the need for a liver transplant, is quite remote. You should not be spending too much money to protect against these risk. The cost of a private shield plan may take away $40,000 over a lifetime. Why pay so much (a certainty) to insure a risk ($100,000) that is quite remote?

Social insurance

There is a role for social insurance to deliver the basic needs for the population in an efficient way, compared to private insurance. Our government leaders should understand its strengths and weaknesses and find the right balance between social and private insurance.

There is a mistaken belief that private insurance is more efficient. It is actually more costly to use private insurance to deliver the basic needs that are required by most people.

 

Ask Mr. Tan

Not insured under Medishield

Some people are worried that their parents are not insured under Medishield. They try to apply for Medishield now, but the application is rejected as their parent has some medical condition. They need not worry. Here are some tips on how to cope without insurance.

Ask Mr. Tan

Do you hate Singapore - a response

Read the response by C H Yak in SGEP.

The article has many interesting photos of Nanjing, showing the remarkable progress made in the city. He compares life in Nanjing with Singapore and raises several issues that should be considered at the forthcoming general election in Singapore.

Minimum wage - a successful government policy

Many countries have implemented the minimum wage. It has been voted as the most successful government policy in the UK according to a survey by BBC. Read SGEP.

A big sacrifice - Goh Meng Seng

Goh Meng Seng has to make a big sacrifice in going into politics. He believes in giving a choice to the people of Singapore. Read SGEP.

The monk, the clown and the minister

Who are these people and how do they affect our politics? Read SGEP.

House of Commons debate on Alan Shadrake

Read the debate in SGEP

Potential danger of joining an insurance company

The wife of an ex-insurance agent shares the unhappy experience faced by her and her husband who quit his job to join an insurance company. She explains some of the unethical practices that the husband had to practice to meet the sales quota. She is glad that he has given up the insurance job  and had returned to an ordinary job.

Ask Mr. Tan

CPF Life annuity - case study

Here is a case study of a person aged 58 who has to decide on whether to stay with the Minimum Sum scheme or to convert into a CPF Life Annuity.

Ask Mr. Tan

High cost of operating a business in Singapore

Sent to Forum Page, Straits Times
I recently looked at the cost of renovating a small office of 1,300 sq ft and was shocked to receive several quotations exceeding $70,000, in spite of my modest requirements. This shows how costly it is to operate a business in Singapore.
Included in the cost is a sum of $3,500 to obtain the approval of the authority for fire safety. I learned later that this is the fee payable to professionals to certify the safety of the renovation. This same fee is charged for a small premise as well as a large premise of 10,000 sq ft.
It does not make sense to impose such a costly requirement for a small premise. I suggest that renovation of small premises should be exempted from the need to get the certification of a professional. Perhaps this certification should only be required in exceptional cases where the premises have activities that could impose a danger to fire safety.
Over the years, I have heard many complaints from small enterprises about the high cost of operating a business in Singapore. Several initiatives were taken to address these complaints. I am surprised to learn now that these initiatives did not seem to address this regulation, which seemed to be unnecessarily costly.

Tan Kin Lian

Belgian court fines Citibank over Lehman sales

http://www.google.com/hostednews/afp/article/ALeqM5guCCBwmq2OmDxE3dhQH6df5BId-w?docId=CNG.10af55f3e3cb08c769737268f0f3bdbc.931

BRUSSELS — A Belgian court fined Citibank 165,000 euros (216,000 dollars) on Wednesday after determining it used "false advertising" to sell Lehman Brothers investment products without warning clients of risks. The court found that Citibank breached laws on commercial practices, having "minimised the risks" and having "led inexperienced investors to put money into the American bank." The tribunal said Citibank did not stop selling the products even though Lehman's credit rating had been downgraded.

Citibank sold 128 million euros worth of Lehman Brothers bonds to some 4,100 clients in Belgium. These bonds became worthless after the collapse of Lehman, the trigger for the world's deepest downturn since the 1930s Depression, in September 2008.

In February, Citibank said more than 97 percent of these clients had accepted a settlement, some of whom took a 65 percent redemption on the spot rather than wait for a potentially a higher figure later. For the remaining 120 or so clients who pursued the action, the court ordered Citibank to match the on-the-spot offer. A spokesman for the bank told Belga news agency it would appeal.

Belgium's Federal Economy Minister Vincent Van Quickenborne said the verdict was an "unequivocal condemnation."

Declaring medical condition

This consumer is not sure if his medical condition needs to be declared and if it affects the underwriting of his application.  What is the correct approach? What should he do, if the terms imposed are too harsh?

Ask Mr. Tan

10 Tips on Financial Planning

Here are 10t ips on financial planning. Hope you find it useful.

Ask Mr.Tan

Victor Foo and SCCCI

I know Victor Foo personally and wish to endorse his effort to get elected into the SCCCI council.Victor is positive and reliable and will meet his promise more activities and representation for small businesses.  I encourage my blog readers, who are members of SCCCI, to vote for Victor Foo. 

Dear Members of SCCCI

Financial advisers willing to sell term and ETF

Hi Mr. Tan,

I am currently recruiting advisers especially tied agents who felt that their agencies have not been providing good support to them. I am aware that a number of agencies/firms taught their agents to sell based on the highest commissions rather than needs of their clients with very few training provided. 

Under my team, advisers will not be judged based on how much revenue they can bring in but on how clients are being helped. I imposed no sales quota. I’ll hand-hold these new advisers on how to do recommendations based on needs of their clients. I am product neutral as long as recommendations are suitable for their clients. This is unlike other agency managers who may be unhappy with low cost recommendations such as term and ETFs. Moreover, training provided easily exceeds 90 hours per year. This is way above the regulatory requirement of 30 hours.

My advisers will not charge an advisory fee unless they have significant relevant experience and academy qualifications. I do not consider advisers from tied agencies to have the relevant experience unless they can show evidence of selling products based on needs. In the meantime, how these new advisers are going to earn a decent living selling suitable products is going to be an issue. One of my ideas is to get clients to come to our business center for consultation during office hours. Clients indirectly pay for the advisory fee by incurring their own travel expenses and the inconvenience of taking time off from work. Even if these advisers do not charge a fee for the consultation, the reduction in travel and marketing expenses for these advisers will be significant because the profit margin for selling low cost products is higher when expenses are lowered. 

My recruitment page can be found here: http://www.wilfredling.com/content/view/169/67/.

Thank you for posting this on your blog. Appreciate it.

Wilfred Ling

FA Associate Director

Promiseland Independent Pte Ltd

10 tips on buying insurance

Here are 10 tips on buying insurance. It is written for consumers.
Ask Mr. Tan

Median income grew by 4.2%

Read this story: http://www.channelnewsasia.com/stories/singaporelocalnews/view/1096348/1/.html
Although the median income has increased, it barely covers inflation. Furthermore, the lower income workers hardly earned any increase and have to cope with higher cost of living.

Talk by Jacques Attali - Is the Global Economy still in crisis?

I recommend my blog followers to attend this public talk - which I have registered to attend. Please read the details below and register for the talk. Personally, I like the socialist approach taken by France, rather than the free market capitalist approach followed of America (that has caused the global crisis). I like to hear what Dr. Attali has to say, and will also give my views at the seminar.

If you register for this talk, please send an e-mail to kinlian@gmail.com. I want to talk to you about the issues that you are interested in or know that you are attending.

Tan Kin Lian

ASEF(www.asef.org) is the only permanent institution of the Asia-Europe Meeting (ASEM) based in Singapore.

We organise various intellectual, cultural and people-to-people exchange programmes that promote mutual understanding between the people of Asia and Europe. So far we have conducted over 500 projects, reached out to over 15,000 participants in Asia and Europe.

On the 13^th of January 2011 we are organising a ‘Public Talk’ by the French economist and writer Jacques Attali, one of the top 100 public intellectuals of the world. This event is co-organised with the Institute of Southeast Asian Studies (ISEAS). Singapore Foreign Minister Mr George Yeo will be present in this event to introduce Dr Attali.

This will be an open session where people from different walks of life living in Singapore would get an opportunity to interact with Dr Attali. The topic for discussion: “Is The Global Economy Still In Crisis?”

The venue of the event is the Ballroom, Raffles Hotel (13^th January, Thursday, 10.00 am to 12.00 noon)

Here is a a short video on this event http://asef.org/index.php?option=com_project&task=view&id=669

BEST - Business Game

Go to this website: http://www.easyapps.sg/besta/

Watch the video to learn how to play this game.

There will be 7 games every hour. So, you can join the game at any time of the day or night! You can even join a game after it has started.

If you are not sure about playing the game, you can "View" any game and watch how the other players are doing. If you join the game and do not wish to submit any input, the software is intelligent enough to simulate the input for you.

If you are the only real player in the game, you will be competing against 9 other simulated players. You should be able to perform better than them, after you learn the technique. But, at the initial stage, you may perform worse.

Wish you all the best!

Making reparations

Hi Mr. Tan,

After studying for some financial planning examination modules as well as reading up widely about financial planning, insurance and investments, I have come to realise that I have sold many products of poor value to my clients during the last almost two years I spent at an agency of a large insurance company.

Being naive and new to the industry back then, I readily accepted products such as anticipated endowment plans and regular-premium ILP life insurance as good and beneficial for my clients and myself. Like many of my colleagues, I trusted my manager and company to teach us the right thing.

It is only now that I realised that many of these products were taught to us based on half-truths, and in turn we recommended such products to our clients based on such half-truths. When I raised such issues to my colleagues and manager, they persisted in rhetoric that we were truly benefitting our clients with such products, and even that the half-truths were necessary for them to take up the beneficial plans. Later, possibly knowing that I know better, I was persuaded to leave which I was more than happy to do so as I could not continue to do things against my conscience. My colleagues are still spell-bound by their managers and perhaps the money and incentives they got from the sales of such products. I know them to be good-natured and well-meaning people, but alas I feel hurt to realise that many of them think that I'm just trying to create trouble when I tell them about the serious downsides of the products we were selling.

I feel very bad and guilty that many of my clients will be shortchanged as a result of such plans which neither insure them adequately nor prepare them for retirement. Insurance agents face a lot of rejection, and I feel that I have betrayed the trust of these people who were kind enough to give me a chance to handle their finances.

I am moving on to an ethical independent financial advisory firm where I feel I will be most able to give ethical and competent advice (low cost funds and term policies), but I still feel bad for the financial damage I have potentially caused to my clients. I feel that I should tell them the truth I have realised about the products they have taken up, but I worry about the potential repercussions I might face. While I feel that it is good for them to know as their policies are still young and still manageable, I think that many will misunderstand and think I am just trying to sell other products to them even though I can receive a good income by just remaining mum and collecting the trailing commissions.

I even feel inclined to refund them the full cost of the premiums they have paid, but I realised that while the remuneration for such products were good, I cannot possibly do this as a bulk of the premiums also go to other entities aside from the adviser, and I have to consider my own survival.

I sincerely wish to make up for the wrongs I have done. I hope you and your blog readers can give some suggestions and advice on how I can make reparations to my clients.

Many thanks.