Saturday, July 14, 2012

FISCA Talk - Consumer Guide to Insurance, 25 Aug 2012

Many consumers are approached by insurance agents and are offered a wide variety of insurance policies. The consumer is confused and wants to know what they need to buy and what are unnecessary. They also want to know which policy offers good value.
The speaker will explain the common life and general insurance policies that are available in the market. He will also cover the insurance schemes that are offered by the Government through their appointed insurers
http://easyapps.sg/assn/Org/Event.aspx?id=5



Government procurement guidelines

The Government procurement guidelines can lead to bizarre results, such as the purchase of foldable bikes at many times of the normal cost. Article.

It is better to have guidelines that allows discretion, common sense and responsible decision, rather than to follow rules blindly.


Zurich Vista Plan

Dear Mr. Tan,



As an expat in Singapore I signed up for Zurich's Vista Plan. Life in Singapore was good and I am very grateful for the hospitality and opportunity provided by the Singaporean Government. (My 2 kids are called Lee and Kuan, my wife's last name is Yu. That wasn't done on purpose, but in a way it does reflect our respect for the Minister Mentor.)
 
While liberal financial regulations have made Singapore what it is today, the top city to do business in, I feel that regulations aren't protecting end consumers as they should. MAS has brought some considerable improvement in this area, but does it go far enough?
 
As an example, I would like to call on all customers who regretfully have purchased a Zurich Vista investment plan.
 
I say regretfully, because for me it hasn't worked out. After several years of contribution, this is the score:
- on contributions of about us$ 200,000, Zurich has charged me us$20,000.-
- my gain has been around 4-5% per annum (which is good for Singapore, but standard in Australia)
- that gain is mostly due to the bonus which I was given at the beginning for signing up, this bonus effect will decline over the years
 
My main regret, besides the high cost, is regarding the terms and conditions that come into play when life changes and contributions to Zurich have to be paused.

Once I stopped making regular contributions, I found out that some of the charges simply continue and that stopping alltogether is costly, due to a steep surrender penalty. I am establishing if I have been mislead or ill-informed, or, whether it has been my own fault to buy into this product. 

My individual opinion - other people may have their own -  is that I bought 'flexibility', and that the fixed fee structure and high surrender penalties haven't been made clear enough. As a part of that process, if there are more customer like me, I am calling on them to see if we can take collective action:
 
Erik van Vulpen
Australia
 

Future for F1 in Singapore

Singapore has spent many hundred millions to bring F1 to Singapore. If it is not continued, the money spend would go down the drain. This would be a bad outcome for Singapore, and for our tourism. Article.

On the other hand, I do not want to see the F1 Grand Priz continued on terms that are not satisfactory to Singapore, and to be a continued drain on our funds and to bring inconvenience to the public.

We have to ask this question - did we make the right decision in the first place? Did we have the right people  to manage this mega-project? What mistake did we make, and could it have been foreseen in the first place? is there something wrong with our system?

Acquiring property for a public purpose

Here is an interesting article about the right of a Government to acquire property for a public purpose. This concept is called "eminent domain" in USA. Article. I find this article to be interesting, as we have a law that gives the Government the right to acquire property and that law has been used for many decades.

Future of Singapore and for the people

Here is an article from a young person. It is pessimistic. He said, "nothing is going to change" in spite of the unhappiness expressed by many people. Article


US lawmakers protested when they learned that the uniforms for their Olympic teams were made in China, and not in America. This journalist ask the lawmakers - "did you buy your own cloths that are made in America?" This article is intended to expose the hypocrisy of the lawmakers.  Article.

Friday, July 13, 2012

Parliament members should be full time

It is time for Singapore to move to a Parliament with members who work full time in this job, and do not have any other full time work. We cannot have part timers to be MPs.

My reasons are:

  • Laws have to be debated actively. There are merits and risks that have to be considered. Parliament should not be a rubber stamp.
  • The Parliament should act as a "check and balance" on the Government of the day. It should be a deterrent against corruption and abuse of power.
  • The allowance paid to a MP, at $15,000 a month, is sufficient to be a full time pay. 
If we make it as a full time job, we will attract the right people whose interest is to serve the people and not to enhance their business in the profession or the private sector. 


Read this blog:
http://tankinlian.blogspot.sg/2012/07/are-our-mps-taking-job-seriously.html


Questionable investments

This is a talk given to FISCA members and non-members at the dinner talk on 12 July 2012. http://tankinlian.com/FramePDF.aspx?ID=663. The dinner allows the participants to talk about the investment climate and get to know other members. Go to www.fisca.sg to see the photos and learn more about this event and future events.




Thursday, July 12, 2012

Need for OneInbox


7 July 2012 

Editor, Voices
Today Paper

I refer to the letter from Tang Fook Meng on the OneInbox email service.

Like Mr. Tang, I am happy to receive e-mails from government agencies sent to my 
regular e-mail account.

However, I wish to express support for the OneInbox service for the following reasons:
  • It is better to receive e-mails in OneInbox rather than signing in to the websites of individual government agencies, such as the Central Provident Fund, the Ministry of Manpower or the Accounting and Corporate Regulatory Agency or receiving the letters by physical post.
  • The government agency may need to have a audit trail that the message has been received and read, which is possible through OneInbox or their individual website
  • It is better to receive the important mail in OneInbox, rather than to have them mixed up with all types of e-mails that are received in the regular email account
I hope that OneInbox can be developed as a means of authenticating the identity of the recipient. This can replace the current system of sending personal identification number (PIN) or temporary passwords to the physical address.

Tan Kin Lian

Are our MPs taking the job seriously?


Dear Mr. Tan,

I was shocked to read the following on the papers recently:
 
"The Land Transport Authority of Singapore (Amendment) Bill was not passed yesterday as fewer than a quarter of members were present in the House at the end of the debate. Mr Lui is expected to address the LTA's role in last December's train disruptions in Parliament today." Today 10 July 2012
 
How can there be fewer than 25% of the MPs be present in our Parliament at the end of a debate? A Parliament is in session and so many of them were absent or left midway? Less than 25% means 3 out of 4 MPs are absent. How effective is such a debate? And the session is an important one as it is with regard to the SMRT breakdown last year. Is it not ironic that so much time, effort and money were spent in a COI and yet when the issues were discussed and debated in Parliament less than 1 in 4 of our MPs were not even there!.
 
Do you find it healthy or even disturbing that there are so many MPs who were not present in Parliament? How can our MPs be expected to do their job when they are not even present in Parliament. There are so many of them who choose to attend to other supposedly more important matters. It is pretty sad. Regardless of what is been discussed in Parliament I think they are definitely important issues.
 

Wednesday, July 11, 2012

Pledge to the IMF


7 July 2012 

Editor,
Forum Page
Straits Times

Article 144 of the constitution of Singapore states, "No guarantee or loan shall be given or raised by the Government except under the authority of any resolution of Parliament with which the President concurs".

The meaning of this article seems to be quite clear to me. In my view, the pledge of US $4 billion to the International Monetary Fund constitutes a guarantee that is covered by this article. If the pledge is called by the IMF, the Government will have to grant a loan which is also clearly covered under this article.

I am. therefore, amazed by the arguments put forward by the Monetary Authority of Singapore that the pledge given to the IMF, as it now stands, did not breach the Constitution. If the position of MAS is correct, it is better for the Constitution to be re-written to reflect the position taken by MAS.

The Constitution is perhaps the most important legal document in the land. The citizens should be assured that they can trust the Constitution to mean what it says, and that the wordings are not interpreted in a manner that defy logic or common sense.

I do not understand why the pledge of this large amount is not submitted for approval by required under the Constitution. Even if there is an urgency for the pledge to be given, it can be given on a provisional basis, and be subject to obtaining the required approvals. I believe that most countries would follow such a process on a matter of great importance. This would reflect a high standard of governance, which is what the Government aims to promote in the corporate world.

Rather than justify an action that is already done, I suggest that the MAS should submit the pledge to Parliament for rectification by Parliament and the President. It is all right to make a mistake and to learn from it.

Tan Kin Lian


TKL Mailing List

I send out regular mails giving my views on financial planning, investment and insurance. If you wish to be on my mailing list, you can click here to enter your email address. You can also add the email address of your friends and contacts, to include them in the mailing list.

I will not disclose the people who have supplied the contact. If they do not like my mailing, they can "unsubscribe" easily. So, do your friends a favour, and add them to my mailing list.  Or, you can tell them to subscribe themselves.

Invest in US tenanted property

Mr Tan,
Can I ask about your opinion of another type of property investment by another company?  Company Z claimed to have great connection  - as such able to get US banks to provide 50% loans to tenanted properties yielding about 14% or more. These are real properties costing average about US$35-40K. I couldn't find any fault with this. Can you?


REPLY
This could be a genuine opportunity, but could be a scam. So you have to do  your due diligence. Maybe, it is better to get a group of potential investors to study the investment together.

Tuesday, July 10, 2012

Financial advice

If you have bought a life insurance policy that is giving a poor return, and you wonder if you should continue the policy, you can get advice from this source:
http://www.easyapps.sg/assn/FramePDF.aspx?ID=231


Land banking in Georgia, USA

I received an e-mail from this concerned citizen of USA. I am posting the e-mail with all reference to the land banking promoter removed, but indicated below as X. This is to avoid being sued for defamation. Those who have invested in this project will know which is X. If you have been misled into investing in this project, and you wish to take join a group to lodge a complaint collectively, please send an e-mail to kinlian@gmail.com.

For other people, do read the statements presented below carefully. Most land banking schemes follow the same pattern, i.e. the land plots are offered at 10 to 20 times of their actual value.

Dear Mr. Tan Kin Lian,

I live in Jackson County, state of Georgia, USA. This is a small, very rural county about 60 miles from the city of Atlanta. X has been buying up some big tracts of land here and is proposing to develop them for housing and industrial sites, but the land CANNOT be developed -- it's against local zoning laws, and there is no water or sewer service available.

I recently learned that X sells fractional interests in these tracts of land to small investors in Asia through sales offices in Singapore, Tokyo, Kuala Lumpur and Hong Kong. These sales are at crazy prices!

As you probably heard, we had a housing and property bubble here up till 2007, but the bubble popped. Jackson County now has about a 20-year supply of building lots available, and they can be bought for $6000 - $10000 per acre. A 37-acre piece of land next to mine recently sold for $4000/acre. From a brochure I found, it says X is selling these lands to small investors in Singapore, etc. for the price of over $82,000 per acre! 

In Georgia, it's hard for us to believe people would pay stupid prices like this, but here is the data from our county's own tax records showing that over 1,600 Asian investors bought this land at the price of $82,500/acre: 

Here is my question: How can X do this? How can these buyers be so stupid? They will never get their money back. If these investors pass this land on to their grandchildren, it will still never be worth what they paid for it--the county has huge amounts of land that is already zoned for housing and has water and sewer available. These lands are available for MUCH less than the Asian small investors paid.

What is X telling these people, that they will be able to sell at a profit in a couple of years? Or is this a Ponzi scheme, where money from new investors is used to pay off prior investors?

In Georgia, we would like to hear your reply because we are afraid X's landbanking schemes are very harmful to our community, and they may also be harming small investors in your country.

Thank you for your help,
James 


Dear James 

Thank you for your valuable information.

There were many similar land banking schemes sold in Singapore, and the investors have been stuck with the investments. They were probably told that the developer would get approval for re-zoning and the land would be worth 2 to 3 times of their investments. The land never got developed.

Some have complained to the authority, but the authority could not prosecute the promoters. Perhaps, the authority did not have evidence or sufficient resources to investigate the complaints.

There was a recent case involving another promoter who made paid interest at 2% a month and promised to pay back the invested sum after 1 year, and it is linked to some land purchase. This type of arrangement is a ponzi scheme, and the operations were closed by the authority, probably on this account. We have not heard of the case coming to court.

I was threatened with defamatory suit by a prominent legal firm in Singapore acting on behalf of a promoter. I posted an article in the British newspaper about a land banking scheme sold in Singapore. The legal letter alleged that I had defamed their client and asked me to provide evidence to back the allegations that were posted in my blog - which was just a repost of the newspaper article. This matter was settled without any payment from me, and I will not go through the history of that case.

In your particular case, I will post your article and remove all reference to the land banking company. I will also think of some way to give the information to the authority to see if they can take up the matter. 

Tan Kin Lian

Monday, July 09, 2012

Insurance policy to provide for education


I keep getting questions from from the public asking for specific advices, such as the following:
I'm currently 36 years old. I have two young children. I would like to buy an education policy for each of them. I expect to retire at 55. I would like to seek your advice which company offer the best policy. Or should I not even take up an education policy?
My reply remain the same, to read the appropriate FAQ in my website and to attend the 
educational talks conducted by FISCA.

 Read this article

If they want specific advice, they should see an adviser and be prepared to pay a fee. If not, they should be prepared to be ripped off.



Data Privacy


The Hong Kong Legislative Council has passed the Personal Data (Privacy) Amendment Bill.
Key points:
•  introduces new obligations on the use of an individual's personal data in direct marketing
•  introduces new obligations on the transfer and sale of personal data to third parties
•  empowers the Hong Kong Privacy Commissioner to provide legal assistance to individuals to seek compensation from companies/organisations if there is a breach of the Personal Data Protection Ordinance.
•  empowers the Privacy Commissioner to verify accuracy of data user returns
•  imposes heavier penalties for repeated contraventions of enforcement notices and a new penalty for repeated contravention of requirements under the Personal Data (Privacy) Ordinance where enforcement notices have been served
•  introduces new exemptions (e.g. processing arising from due diligence, emergency situations).

My views:
Singapore seemed to be quite slow in enacting a similar legislation.

Sunday, July 08, 2012

Taking responsibility

Our leaders and civil servants should take responsibility in engaging and replying to letters from concerned citizens. Read this article by Kenneth Jeyaretnam.

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