Assistance on using the Leasing Portal

If you need our assistance to list your property or to prepare a tenancy agreement, you can submit a request here:

http://leaseproperty.sg/assist.aspx

Set aside savings for specific needs

Mr. Tan
What are your views about planning for the expenses set out in this article?
http://blog.moneysmart.sg/…/5-retirement-expenses-singapor…/

Is it necessary to include these items in the financial planning? How much should be set aside for each item?

REPLY
I do not recommend setting aside a specific amount of savings for each item.
I advise people to make adequate savings to cover all contingencies, including retirement and unemployment.

My approach is explained in this talk.
http://c-onyx.com/page/2363

Singaporeans are not hungry enough

John is the IT manager of a large Temasek linked company.

John - It is difficult to find Singaporeans to do IT work. They are not hungry enough. The foreigners from China and India are prepare to work hard, but not the Singaporeans. At 5 pm, they go home.

TKL - When I was in Sydney, most people go home at 5 pm. They do not need to stay back in the office after 5 pm. They do have a family and other activities to attend to.

John - I am referring to Singaporeans who have just joined us. They need to work hard for one year or two to get the knowledge and experience. If they are not willing to do so, they will never get the competence.

TKL - If you are referring to male graduates, they are likely to be quite old by the time they join you, maybe 26 to 28 years old. If they have to spend another 1 or 2 years to get the working knowledge, they will soon be hitting 30. The problem in Singapore is our full time national service, which takes away 2 1/2 years of their life (including waiting time to be called up) and university which takes another 3 or 4 years.

John - Oh. I did not see it from that angle.

Use of personal e-mail should be allowed

There is a rule in the US government that all officials should use their official email, rather than personal email.

https://sg.news.yahoo.com/pentagon-chief-carter-used-person…

This rule seems to apply also to many commercial companies. I presume that the purpose is to allow the organization to check on what the employee is doing. But why is it necessary?

Many government agencies and commercial companies in Singapore also follows this practice.

I find this rule to be inappropriate. I use my personal email address for personal and business purpose. Instead of talking to someone over the telephone, I send an email. Why should I have to use the official email address?

If it comes to a business deal when a record is required, we will probably use a signed document anyway, and send by PDF.

MAS Balanced Score Card

Here is the opening section of the MAS regulation on the Balanced Score Card. Frankly, I do not understand what it meant. I expect MAS to use simple and clear English in their guidelines, rather than confuse the public with this kind of language.

1 These Guidelines are issued pursuant to section 64 of the Financial Advisers Act (Cap. 110) [“FAA”]. They apply to all licensed financial advisers and exempt financial advisers, other than a financial adviser in respect of the activities, recommendations or transactions set out under regulation 34A of the Financial Advisers Regulations [“FAR”].

2 The Notice on Requirements for the Balanced Scorecard Framework and Independent Sales Audit Unit [FAA-Nxx] (“the Notice”) sets out the requirements for the Independent Sales Audit Unit and the design and operation of the balanced scorecard framework which financial advisers shall put in place in their remuneration structures for their representatives and supervisors. These Guidelines are intended to provide general guidance on some of the requirements in the Notice, such as the posttransaction checks and classification of infractions by the Independent Sales Audit Unit. In addition, these Guidelines set out the measures to be applied to existing and newly recruited representatives and supervisors who have been assigned a balanced scorecard grade E, as well as obtaining and sharing of information on the representatives’ and supervisors’ balanced scorecard grades during reference checks. The Guidelines also set out the Authority’s expectation for financial advisers to conduct pre-transaction checks to minimise the impact of the balanced scorecard framework on representatives and supervisors. The Authority may rely on a financial adviser’s failure to comply with these Guidelines to establish or negate any liability in question in relation to any proceeding under the Notice.

3 These Guidelines should be read in conjunction with the provisions of the FAA, the FAR, as well written directions, notices, codes and other guidelines that the Authority may issue from time to time.  

MAS Balanced Score Card

John Thor Wu asked:

Mr. Tan, what's your view on the latest Balanced Score Card implemented to so called improve the insurance sector?
My view is that MAS is wasting so much monies to achieve so little things...when they can actually use that monies to make sure consumers don't, in the first place, buy EXPENSIVE insurance related products.
But maybe they scared that many insurance agents will leave and unemployment level shoot up. The very true is with the implementation of the BSC, insurance agents will CONTINUE to sell THOSE super expensive products because they will have their way to protect themselves and at the same time consumers continue to waste their monies....
Insurance is not all useless but consumers need to either find the right agents, or educate themselves, plus MAS to filter out those products that do NOT meet the criteria in term of costs (e.g CPF-IS scheme).

REPLY

I am not familiar with the Balanced Score Card. I am not able to comment on its goals and its effectiveness in achieving the goals. I usually prefer to identify the root of the problem and find the right way to address it, rather than to adopt an approach that sounds good on paper, but is not clear to most people. 

My approach towards providing insurance protection and long term savings for consumers is:
a) Get insurance companies to offer products that are suitable for consumers and ensure that the premiums are charged fairly.
b) Make it possible for the agents to make a living by selling these products, e.g. to reduce the time taken to sell the products, so they can earn enough on the modest commissions that the customers can afford
c) High net worth individuals who need special financial advice should be encouraged to approach experienced and qualified advisers and to pay a fee.

I will give my comments on the MAS balanced score card approach when I learn more about it.

Private condo available for rental

This private condo in Upper Thomson Road is available from 1 March 2016 at a reasonable rental. It is close to some popular schools.

http://leaseproperty.sg/ViewListing.aspx?idlisting=1

The house in Oxley Road

Should Mr. LKY house in Oxley Road be kept as a national monument or be demolished? Give your views here. After 10 votes are received, we can view the results.

http://wisdomofthecrowd.sg/issue_det.aspx?ID=48

An intelligent dog

My friend in Romax Farm in Malacca kept more than 10 dogs in the farm. One dog is called Fox. She gave birth to a puppy but it was killed by one of the dogs.

One day, while pregnant again, she disappeared from the farm on a stormy night. My friend presumed that she had run away.

Fox returned back a few days later looking for food, but must have given birth at another place.

One night, my friend followed Fox back after her dinner. They found that she had a litter of four puppies in another farm. She must have felt that her puppies would be safe there.

Fox returned to Romax farm every day for her meal. Sometimes, she took back some spare meat to feed her puppies.

I saw Fox. She was intelligent and friendly.

Wild animals also have families

A farmer told me of an incident in his farm that is quite sad.

He plants fruits and vegetables and keeps out the wild animals with a fence. One day, a wild boar tore open the fence and destroyed his plants. This occurred for a few days.

He finally laid a trap for the boar and caught it. it was a female boar. He sold her to a nearby restaurant which sells wild boar meet.

A few days later, his farm was visited by three piglets looking for their mother. He was so sad to see this piglets.

He would normally not hunt the wild animals, but it this case, the boar was destroying his plants.

Elderly people should stay on Medishield Life

Hi Mr Tan, do you think it is necessary to buy an integrated shield plan to get better healthcare (private hospitals) as opposed to just relying on Medishield Life?

REPLY
This is not necessary, especially for older people.

I wish to share the experience of an elderly lady. She was encouraged by the agent to convert from a basic plan to a A plan that covers treatment in a private hospital.

She was diagnosed for colon cancer after a year. As she had an A plan, she was advised to go to a private hospital. She incurred a bill of $300,000.

The insurance company rejected her claim, as she did not disclose that she had diabetes at the time of upgrading. She said that the agent did not ask her about this condition. She was not educated in English and relied entirely on the agent to handle the upgrading.

The insurance company finally offered to pay $80,000 for her treatment. This was probably the amount that would have been paid under Medishield Life.

If she had remained on Medishield Life, she would have been fully covered (except for the co-insurance). By upgrading to the A plan, she had incurred a large bill that was not covered.

When a person is elderly, they are likely to have a chronic condition, such as diabetes or high blood pressure or high cholesterol. They may not be aware about it or may not be aware that it has to be declared. It is risky to upgrade a Shield plan at an advanced age.

Easy to vote with google or facebook sign in

You only need to register once for the Wisdom of the Crowd website. If you wish to vote at any time, and you cannot remember your password, just click on the Facebook or Google sign in, and you will are ready to vote. It is convenient and easy.

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Voting results - Wisdom of the Crowd

The Wisdom of the Crowd website has a new look. More people are now voting on the issues, as shown here.

http://wisdomofthecrowd.sg/view_issue.aspx

You can vote on the issues and get a free copy of the e-book "Financial Planning for Young People" (usual price $6) after you submit 5 votes.

Register here to vote immediately.
http://wisdomofthecrowd.sg/Register.aspx

Like a gold rush

COMMENT POSTED IN MY BLOG

Read this article below about why people are joining the life insurance industry like GOLD RUSH. https://sg.finance.yahoo.com/…/ever-wondered-insurance-agen…

After reading the article I hope that the public will understand why graduates, doctors ,dentist, engineers and accountants, conmen and women join the industry. Is it because these people want to help you poor clueless people out there to make you rich, to have more money when you retire; to be adequately insured?

The answer is NO< NO NO. to make themselves rich and this is the industry where they can cheat you and con you LEGALLY without being noticed and caught. Why? their accomplice, the insurance companies need the money from you too to invest for their senior managers to have humongous salary. What about the regulator? (Rude remarks deleted)  they cannot see even when a crime is committed infront of them.

Vote now and get your free copy of "Financial Planning For Young People"

Several people have participated in the voting of 5 or more issues in this website and have already received their free copy of the popular e-book "Financial Planning For Young People". You can also take part now, and get your copy.  It should take you just 15 minutes to give your votes on 5 issues.

http://wisdomofthecrowd.sg/view_issue.aspx

More productive to arrange an open house

My friend in Sydney told me that he is selling his house. He appointed a property agent. The agent put up a listing in their company website. The listing was quite impressive.

The agent arranged for 2 open house events. At each event, about 5 prospective buyers are visiting.

This seemed to be quite productive. The owner only needs to be interrupted twice for many buyers to view the house.

When I looked for a tenant to view my vacant property, the agent had to make individual visits to show one prospective tenant at a time.

Financial Planning for Young People - free copy

Financial Planning for Young People is my most popular e-book. It sells from $6 from my website (www.c-pearl.com/shop).

You can win a FREE copy of this e-book by submitting your vote on 5 or more issues in the Wisdom of the Crowd website.

Register here: http://wisdomofthecrowd.sg/Register.aspx

After registration, you can click on "Vote Now" to see a list of issues that you can vote on. You will be given the "For" and "Against" reasons on each issue. Select your vote and click the "Submit" button.

Implications of "nationalizing" the public transport system

The government is going to "nationalize" or "de-privatize" the public transport system. They have not made a specific announcement, but they have already awarded two operating contracts to foreign operators to operate two batch of new bus services.

There is now "insider information" that they will be buying the fixed assets, i.e. buses and trains, from the two operators and will tender out the operation of the bus and train services that they are "taking back" from SMRT and SBS.

How will this impact the commuters?

Nationalize model
Under the nationalized model, the Land Transport Authority will decide on the planning of the services and the fare structure. They will tender out the operations of the bus and train services to the operators on a term contract of presumably five years.

The operator who wins the contracts will be assured of a guaranteed fee to run the service. They have to pay the wages, fuel, maintenance and other operating expenses. Presumably, the operating contract will allow for adjustment in the operating fees to take care of changes in wages and fuel prices. Most importantly, the operator will not have to worry about the revenue and the fare structure.

Under this model, the government will plan the services based on the demand. They will fix the fares based on what their judgement of what the commuters will find to be "affordable". They may fix the fares lower than the actual cost to encourage more people to take public transport.

But, they will not want to underprice the fares, as it might make the other forms of transport to be not feasible. They will also have to address the issue on the nature of taxis - are they private or public transport?

How is it different from the privatized model
Under the current privatized model, the LTA face difficulties in dealing with the transport operators.

The LTA may want the operators to run more services, but the operators have to look at their bottom line and will be reluctant to run additional buses or trains where the marginal cost is not met, i.e. these additional capacity will be unprofitable. The focus on profits will complicate the planning of the services.

The "conflict of interest" will be removed under the nationalized model.

Challenges for the LTA
 The LTA will face the firing line in the future when the public demand for more bus and train services. They will approach their MP, who will bring their request to the LTA or raise them in Parliament.

LTA will need to build the ability to plan the services based on actual demand, and to deal with requests that are not economically justified. They have to learn how to balance between the budgetary cost and the demand for quality service.

Can LTA raise to this challenge? They have to build the ability to handle the new challenge. They need a new way to interact with the people who are affected. They have to listen to their concerns and build the trust that these concerns have been fairly addressed when the final decisions are taken.

Bad customer service - DBS

I went to deposit a cheque at the DBS quick check deposit machine in Midview City. The screen said, "temporary out of order". There was a sign - customer service 1800 111 1111.

I called that number. I had to go through 10 irrelevant messages before giving up. Why can't DBS just allow me to speak to someone to report that the machine is out of order, or to tell me when it will be ready? One hour later, I went to the machine again. It was still out of order.

I know that machines fail from time to time. But what annoys me is the inconsiderate call center system. They should, for such cases, allow the customer to talk directly to a person - rather than make them waste so much time listening to irrelevant messages.

We need a white paper to discuss the de-privatization of public transport

The government should issue a white paper to discuss how they proposed to "de-privatize the public transport system". This white paper should be discussed in Parliament and in the media. The people have a right to give their say on this important move.

The public transport operators will have to be compensated a few billion dollars for the trains, buses and the rail network. How will this sum be determined? Will the price be fair to the tax payers?

How will the future operations be handled. From my reading of news reports, it seemed that the bus and train services will be tendered out to private operators based on a performance contract. This strategy seem to follow the model of London Transport.

Surely, such an important issue must be discussed in the public domain? Will it improve the public transport service? Will fares be increased? Will public transport be subsidized?

Straits Times Asian of the Year Award

Should Mr. Lee Kuan Yew be given the Straits Times Asian of the Year Award for 2015?
Vote here. http://wisdomofthecrowd.sg/issue_det.aspx?ID=46

Get a benefit illustration, instead of a brochure

Mary
Hi Mr Tan, I am a graduate and is saving for the future. What do you think of prudential pruwealth policy?

TKL
Send the benefit illustration to me.

Mary sent a brochure of the policy.

TKL This is a brochure. It does not show the essential information that help you to make a proper decision. You should ask the agent to give you a "benefit illustration" so that you can look at the "effect of deduction" and "distribution cost" and the surrender values. You should register to attend this talk so that you know what is a better way to invest for the future. Get your friends to attend as well.

http://c-onyx.com/page/2363

Do not miss this talk on financial planning, 9 Jan 2016, 2 pm HDB Hub

Do not miss this talk on financial planning. The next talk will be held in 6 months' time.

By attending this talk, you learn how to manage your personal finances, to put aside savings from your regular income, and invest the savings in the right way to earn the best long term return. You also avoid being sold a bad financial product that eats into your savings!

Register now. Do not miss this talk.
http://c-onyx.com/page/2363

Financial Planning Talk, 9 January 2016

HDB Hub, Toa Payoh

Saturday 9 Jan 2016

Time 2 - 5 pm

Venue: Bedok Room (HDB Hub Basement 1)

Duration - 3 hoursFee - $10 (FISCA member) $30 (public)

Outline of the Talk
1. Tips on Financial Planning
2.How to invest your savings
3. Life insurance and structured products
4. Buying insurance-managing risk

Profile of the speaker
Mr. Tan Kin Lian started work in 1966 and qualified as an actuary in 1975. He joined NTUC Income in 1977 as the general manager (later re-designated as chief executive officer) and retired after 30 years.  NTUC Income was a leading life and general insurance co-operative in Singapore.

He is now the President of the Financial Services Consumer Association (FISCA), a non-profit organization formed to educate the public on financial planning.

Register here:
http://c-onyx.com/ParticipateEvent.aspx?ID=132&PID=2363

Rental for high end condos have fallen sharply

Two years ago, a participant at my financial planning talk asked - "Mr. Tan. You advised us not to buy property at the current high price. But, it is also very expensive to pay rental. Surely it is better to buy property now, to avoid the high rental"?

My reply was - "You pay a high rental for one year at a time. It may not stay at a high level for many years. When you buy a property at a high price, you will be stuck with this price for the next 30 years".

A property agent told me that the rental for high end condos have fallen by 40% during the past two years. The property prices have not corrected to this extent, but it will probably come within the next two years.

There is a large over supply of new properties that will come into the market within the next two years. This may cause the property prices to correct sharply downwards. An increase in interest rate will help to trigger this fall..

Disappointing outcome of FIDREC adjudication

A consumer told me her disappointing experience with the adjudication in FIDREC.

She was not properly advised by the insurance agent and signed up for a life insurance policy. The agent had assured her that she could reduce the premium in the future, but did not tell her that she would suffer a large loss in her savings. The agent did not explain the concept of the surrender value.

She had taken a premium that is bigger than what she could afford to pay over the term of the policy. She was able to pay the higher premium in the initial years due to past savings.

Unfortunately, she had signed on the application form that she did not require any advice. She did not understand what it meant.

The final decision by FIDREC was not in her favor. She had to suffer the loss in the excess premium that she had paid, if she were to reduced the premium to a level that she could afford.

She had signed a confidentiality agreement with FIDREC that she would not disclose the proceedings in FIDREC. She felt that she was not adequately advised at the FIDREC hearing and the final decision was unfair to her, as it ignored the lack of proper advice given by the agent.

I agree with her that the FIDREC finding was unfair. It was clearly a case that the insurance agent had recommended an annual premium that the policyholder could not afford to pay over the term. The FIDREC adjudicators should have taken this obvious fact into account in its decision. Apparently, the adjudicators decided to go along the written statements that she had signed at the time of application, even though she had argued that the statements were not clearly explained to her.

There is a law about unfair contract terms. A party cannot be held to the terms of a contract that the court decide is clearly unfair to that party, when the terms were written by the other party. It is clear to me that this concept should be applied to the statements signed by the consumer at the time of applying for a policy, and that the FIDREC adjudicators should observe the spirit of the law regarding "unfair contract terms".

Why is ILP (investment linked policy) very bad?

WS- What are your views on ILPs?

TKL - Very bad.

WS- In what way? I find ILPs nowadays very flexible. Can adjust sum insured amount and type of investment and can even adjust premium.

TKL - The upfront charges make the ILP policy very bad. It is better to invest in the STI ETF directly, and get the return for yourself. When you invest in the ILP, the insurance company takes away 40% of the accumulated amount.  The STI ETF gives you all the flexibility that you need, and allows you to keep 95% of the total return. You can buy the insurance cover separately.

Ridiculous process from CPF

Each month, I paid the CPF contributions for my staff.

CPF sends this email to me.

Dear Employer
The electronic Record of Payment (eROP) for payment received on 27 Nov 2015 under CPF Submission Number 200700231C-PTE-01 is ready for viewing.
To view your eROP:1) Please login to CPF e-Submission (Employers) Service and click "View Record of Payment".2) Select the Statement No. to view the eROP.
Please check that the details in the Record of Payment are correct and inform us immediately if there are any discrepancies.

Yours faithfully
Electronic Submission SectionCentral Provident Fund Board

Instead of sending the information directly to me, they insist on asking me to login to their complicated website to retrieve the payment record.

This is just one example of the troublesome process that our government agencies impose on the business and the public.

They are paranoid about sending information by e-mail, even if the information is not sensitive. All they need to say is that they have received a sum of $X being CPF contribution for a specific month. There is no sensitive personal data in the email.

This practice is adopted not only by CPF. It is the practice in most government agencies. Somebody, somewhere, a long time ago, said that e-mail is not secure for government communication, and must have banned the use of e-mail for all types of "official communication". Nobody bothers to ask if this instruction can be reviewed, or relaxed for non-sensitive information. They just followed the Standard Operating Procedure (or SOP) blindly.

Warning - do not lock your savings in an investment that yields less than inflation

Twenty years ago, it was safe for working families to put their savings in a life insurance policy for their retirement or as a gift for their children. The insurance companies gave a fairly attractive return on their policies that was higher than inflation and comparable to other types of investments.

The situation has changed in recent years. A life insurance policy now gives a poor return, which is often lower than inflation. Worse, the surrender value paid on the policies, even if the policy is kept for 15 years, is lower than the premiums paid, i.e. a negative return.

A life insurance policy is now a terribly poor form of investment for long term savings.

What is a better way? Attend this talk and find out. It give practical and useful advice. Spend $30 and 3 hours and get an honest view that is good for your future.

http://c-onyx.com/page/2363

Joke - waits for instructions

I heard this joke 20 years ago.

There was a shipwreck and the 3 male passengers were stranded. The island had many pretty teenage girls.
The Australian found a local girl and taught her how to play beach volleyball.
The French found a local girl and started an affair with her.
What did the Singaporean do?

ANSWER
The Singaporean telephoned back to ask the boss for instructions.

20 years ago, I felt that this joke was funny. Today, I am worried. Many Singaporeans do not exercise their initiative and have to be told what to do. This has become a habit. It is a bad habit that has to be changed.

Inconsiderate call center IVR system

I get very angry with call centers that ask me to press many buttons before I could speak to the staff.

I had, all along, thought that the buttons were required to divert the caller to the staff handling the category of calls.

I was told recently that this is not the case. The calls are handled by the same group of staff. The buttons that I had to press was for the system to collect statistics.

I got very angry when I heard this explanation. How inconsiderate can the organization be? Just because they want to collect the statistics, they make the customers listen to many messages and press the buttons. Do they realize that it can be very stressful to the customer who has many things to attend to?

I also suspect that the statistics are not important to the organization. If they want to know how many people open an utility account or close an utility account, they do not need to ask the customer to provide this information in the call center IVR system. They have the statistics from their backend system.

How can we stop this inconsiderate behavior of the big organizations in Singapore? They include the government agencies, banks, telcos, and other big companies.

I wish that our MPs do not sleep in Parliament. They should be bringing up these issues to discuss in Parliament. I will write to my MP (Lee Hsien Loong) to ask him to bring it up.

Convenient to travel by bus

Many people in Singapore do not realize that it is often more convenient to travel by bus, rather than take the train.

I use the app "GoThere" which tells me the travel time and fare between bus/bus and bus/train option. Often the bus/bus option is faster and more convenient than the bus/train option.

If you take a bus and change to a train, you often have to spend about 5 minutes to walk from the bus stop to the train station. But if you take the bus and transfer to a bus, you do it at the same bus stop.

The bus/bus option also brings you to a bus stop that is close to your destination. If you take the train,  you may have to make another transfer to a bus at the destination.

The bus is not as crowded as the train (except for peak hours). You are likely to get a seat during the off-peak hours. You will find it more comfortable to travel by bus.

The disadvantage is that the bus is jerky and the travelling time is longer, as the bus has to make many stops. However, the journey time can be reduced if the government changes the system.

Here is a way for the travel time to be reduced, but it requires the government to introduce express services that stop every 2 km rather than 0.35 km now. The express service will reduce the number of stops by 80%, i.e. it will bypass four stops and stop at every five stops compared to the current service. To take the express service, you need to take a feeder service to the express stop.

You can read more details of this new system in this article.
http://tankinlian.blogspot.sg/2015/11/restructure-bus-services.html

I estimate that the travel time can be reduced by 30% under the new system. It will also improve the efficiency of the bus service, and allow the operators to serve the commuters with a smaller number of services.

I hope that you like this concept.

The risks of outsourcing

Many government agencies are outsourcing their essential duties. This include security and policing work. This has several harmful impacts, especially if the outsourcing is done for the purpose of reducing cost.

In some countries, the government outsource certain government duties to the private sector, but they provide a minimum wage or a standard wage. So, the outsourcing is for more flexible management and not for reducing cost. When the contractor gets an adequate fee, they are able to maintain the required standard.

In Singapore, our public service appears to be outsourced for cost reduction. To compete, the contractor has to quote a low price. When they are awarded the contract, they may cut down on quality or safety.

Even if they get an adequate price, they may still cut down on quality or safety, to earn a bigger profit.

It requires considerable skill to ensure the that the expected standard is maintained when the work is outsourced to a contractor. This is usually more challenging than employing direct workers.

It is suitable to outsource work that is ad-hoc or irregular. But for regular work, it is better to use direct employees. If external expertise is needed, this can be purchased when it is needed.

Feeder and express bus system can reduce travel time

If a passenger takes a bus journey for 10 km, there is an average of 30 stops. The journey time will be 70 minutes, including 10 minutes of waiting time.

If the passenger takes a feeder bus and change to an express bus (that stops every 2 km) and change to another feeder bus, the number of stops will be reduced by half. This will reduce the travelling time by about 30% (allowing for waiting time for the feeder services).

While this requires one or two more transfers, the transfers are made at the same bus stop. Passengers will get used to this system soon. (Right now, they have to take a bus and transfer to a train anyway).

If we restructure the bus system to be based on express and feeder buses, we can half the number of bus services from 380 to 200 services. It will also simplify the planning of the frequency of buses to meet the demand.

I first raised this suggestion in 2007. Already 8 years have passed.

http://tankinlian.blogspot.sg/…/encourage-more-people-to-us…

Here is a recent article written yesterday. 
http://tankinlian.blogspot.sg/2015/11/restructure-bus-services.html

Average travel time for each bus stop

I took bus 857 to Raffles City on a Sunday morning to meet a friend for breakfast. I took bus 857 back to my home.

I paid attention to the average time taken for each stop, On the way there, the average time was 1.5 minutes per stop as it was a Sunday morning and the traffic was light. On the way back, the average time was 2 minutes per stop.

On both occasions, I ignored the stretch where the bus traveled on the Central Expressway.

I wanted to collect this information to support my concept of changing the bus system to have express and feeder services. The express service stops every 2 km. The intermediate stops can be served by a feeder service. This new structure will reduce the travel time on buses.

Army style is bad for SMRT

A SMRT maintenance engineer told me.

E - SMRT cannot solve the breakdown problem by following army style.
TKL - What do you mean?
E - When a helicopter breaks down, it affects only the helicopter. When a train system breaks down, it affects many people.
TKL - What exactly is the army style that caused problem to SMRT?
E - Command and control. They bring in people at the top who gives orders, without knowing what needs to be done. So, the maintenance people said, "Okay, you tell me what to do".
TKL - Oh!

I wonder if things are really that bad, or it is just one unhappy engineer?

Restructure the bus services - express and feeder services

Here is my proposal to restructure the bus services in Singapore.

Current System
We now have 375 bus services in Singapore using 4,621 bus stops located on average 0.4 km apart. A typical bus service has 50 stops. The travelling time between each stop is about 2 minutes. A typical bus journey from terminal to terminal may take about 100 minutes or nearly 2 hours. (Some of the figures are based on my guess).

Proposed System
Under the proposed system, we will convert 900 bus stops to be express stops served by the express services. These express stops are located every 2 km apart. The express services stop at the express stops only. This will reduce the travelling time and can make better use of the dedicated bus lanes.

We will probably need only 80 express services to provide connections to the 900 express stops. Although the remaining 295 service can be feeder services, it is possible to combine them and reduce the number. I guess that 160 feeder services should be sufficient to cater to the needs of commuters.

With a 40% reduction in the number of services, the waiting time to take an express or feeder bus is likely to be reduced by at least 40% as there will be more buses for each service. The waiting time for an express bus can be reduced from 10 minutes to 6 minutes and for a feeder bus from 5 to 3 minutes.

The overall travelling time can probably be reduced by 30% under the new system as the express service will make less stops and the intermediate stops will be served by feeder services. Although this may require 1 or 2 more transfers, the waiting time may not be increased as the buses will arrive more frequently.

Planning the new system
We have the data of the travelling pattern to plan the new system. The data shows the number of people boarding and alighting at each bus stop during each time segment (say, every half hour). If we group the bus stops according to the nearest express stop, we will be able to measure the estimate for each of the express services for different times of the day. The travel time of the buses can be planned accordingly.

The planning can be made dynamic with the travel data for each week used to plan the scheduling for the following week.

Do not look at Uber as a problem, it is the solution

The MRT train keeps breaking down at regular intervals. There is nothing that can be done, as the system is clearly over loaded.

The solution is to bring commuters to other forms of transport. How can this be achieved? The roads are already congested. It will be difficult to add more buses, and it will also be costly.

There is a solution. Guess what it is. It requires the LTA and the government to "think out of the box". Sorry, this solution is not found in the SOP.

THE SOLUTION
We need to make better use of our private cars to provide transport. Most cars now has only a driver. We should encourage car pooling. there is non-clarity now on whether car pooling is or is not allowed (e.g. there is payment of a fee) and if insurance is affected. The LTA must provide the regulation to give clarity.

We should also encourage the use of booking of private cars for transport, i.e. the Uber or Grabcar platform. We should increase the supply of this service to bring down the cost. Many owners of old cars will be willing to provide this service to earn an extra income.

The use of Uber will impact the taxi service. But, the taxi drivers can become Uber drivers, so their livelihood is not affected. The taxi companies will make less profit but they already made sufficient profit it the past.

We need to make better use of our existing roads and vehicles to expand the supply of public transport service.

In short, instead of looking at Uber as a problem, the LTA should look at Uber as the solution!

Claim for Loss of Use of Car

Dear Mr Tan,

I asked my insurer to help me to make a third party claim for the repair of my car and for loss of use. I get this reply from them.

"We believe there is a slight mis-understanding regards Aviva's role relating to your motor policy. The insurer (Aviva) does not have legal rights over your personal losses. Aviva has legal rights only to recover the repair cost it paid as it was stated under the rights of recovery in your motor policy.
Your motor policy only covers payment to the repairs of your vehicle upon an accident and/or liability against another party as a result of your action arising out of that accident. The recovery of your loss was always out of goodwill to our insured."

I am not legal trained but I do have a fair understanding of the law as a layman.

If the insurer has no legal binding contract with the third party regarding my loss of use, then why does the insurer meddle or dictate the amount of loss of use? How can the insurer say for a certain capacity of vehicle, such and such is the loss of use? Is this an agreed amount throughout the industry?

If it is, then why do taxi drivers have added privilege with regard to loss of use? Taxi drivers' loss includes rental of vehicle plus personal losses. If I were to become an uber driver, would my loss of use be increased since I function like a taxi driver? I hope you can advise me accordingly.

REPLY
Under the policy, Aviva is contractually obliged to repair your car. They have the legal right, called subrogation, to sue the other parties to recover the amount that they have paid for the repair of your car.

The policy does not provide for loss of use, so Aviva cannot pay you for loss of use and recover it from the other party.

You have to take action on your own to make this claim on the other party.

It is a different matter when the other insurer negotiate with you on the amount for the loss of use. Usually, they will recognize the actual loss that you have incurred, e.g. rental of a car, taxi fare, etc. If you make a reasonable amount of claim, they are likely to agree with you.

I hope that this explains the position clearly.

De-privatizing the public transport system

Singapore has been operating a privatized public transport system for the past 30 years. It has been unsuccessful,. The transport operators, i.e. SMRT and SBS, were profit-oriented. They increased their profit by reducing maintenance expenses, leading to frequent breakdowns in the train system. They are reluctant to operate bus routes that are unprofitable.

The public are unhappy with the decline in service and deterioration in the public transport system. They are now in favor of the government taking back ownership of the system. Someone has coined the term "de-privatization" to describe this action.

De-privatization
The government has already started to de-privatize the public transport system. The recent award of the Loyang bus services to the UK operator, Go-Transport, is the first step in this complicated exercise.

Under the de-privatized model, the operator collects the fares and pass them to the government agency, i.e. the Land Transport Authority. The LTA sub-contracts the operation of the transport services to the operator for a fixed fee under a term contract of say 5 years.

The contractor has to meet the operating and service standards specified in the contract and receive the agreed fees. By operating efficiently, they aim to make a profit. But they are not affected by the actual revenue, the setting of the fares or the planning of the routes. These activities remain under the control of LTA.

Contracting model
Singapore organizations has a wealth of experience with the contracting model. The building of HDB flats and MRT stations are carried out under the contracting model. The contractor tenders a price based on the performance standards of the contract. The contract is awarded by the principal to the successful tenderer.

The principal has the ability to monitor the performance of the contract. The contractors are also experienced in handling their part of the contract. There is also an established mechanism for handling disputes in the contracts.

Is this the right strategy?
The contracting model that is being implemented now has operated successfully in the case of London Transport. I believe that it is the right model for Singapore as well.

We should not expect everything to operate smoothly in the initial years. But it should operate better than the current privatized model. We can expect problems to arise with the new contracting model, but they can be sorted out and improved with experience.

We can look forward to a better public transport system. Of course, we need the Land Transport Authority to be competent in managing the new model. We hope that they have the right people to manage the change and to run the new model.

What's Wrong #16 - Lodging a police report

Many years ago, it was possible for the public to lodge a police report at any police station on any crime or offence.

This procedure seemed to have changed in recent years. If the public goes to lodge a police report about some traffic matters, they are told to go to the Land Transport Authority. If the matter concerns the environment, they have to report to another agency.

I read a newspaper report that someone reported to the police about car racing in the early hours of the morning. The police directed him to the Land Transport Authority that is in charge of traffic matters. The LTA directed him to the environment agency as it is noise pollution. 

What's wrong?

Many people find this new practice to be confusing. They do not know where to make the report. I have heard anecdotes about people being directed from one place to another.

Most of the responsible agencies do not have a network of stations where the public can go to make a report. 

How to put it right

The police station should be the place to make the report. The report can be referred to the responsible agency for follow up. 

There is an added advantage. Under the law, a person will be committing an offence if he lodges a false report to the police. This law will make the public mindful about lodging a genuine report. This law may not be available to the other agencies. 

Unfair for insurer to reject a claim due to non-reporting by their insured policyholder

Dear Mr Tan,
I am writing to request your expert advice on motor insurance terms and conditions, since you were previously NTUC's CEO.

I met with an accident this May. The third party was at fault. The entire incident was captured on video and the video together with my report was filed to claim from the insurer of the third party, which was NTUC.

NTUC claimed that their insured had not reported the accident to date and that makes them not liable for the claim from me. They have repudiated the claim. Based on this, I made a claim against my own policy and my insurer has managed to counter claim from the third party directly on my behalf, except for my loss of use, which my insurer will pursue.

I would like your expert advice on this clause which allows the insurer to repudiate the claim despite the aggrieved party having sufficient proof to make a rightful claim. This may be an industry practice for insurers to repudiate non-reported claims, but is this fair to motorists? Motorists are made to buy insurance for the very purpose it serves, but if that purpose can simply be negated by a simple and fraudulent technicality such as 'non-reporting', then motorists will beg the question, 'Why bother buying insurance in the first place?'

I am going to write in to the current CEO of NTUC. I hope to get some advice from you first before doing so. What can be done for the industry to acknowledge legitimate claims despite the insurer's own client failing to comply with the insurer's own terms and conditions? The industry practice has to change in my opinion.

REPLY

I agree with your view.

When I was CEO of NTUC, I instructed the claims manager that it is not fair for them to repudiate a claim due to non-reporting by the insured policyholder, unless there are justifiable reasons. 

There is the possibility that the accident never occurred, or a case of mistaken identity, or the insured policyholder rejects liability for the accdient. In these cases, the insurance company could rightly reject the claim for non-reporting. 

In your case, you were able to provide evidence to identify the car concerned. It is not fair for the insurer to repudiate the claim and cause problem to the third party claimant. 

To avoid this trouble, it is best for you to leave the claim to your insurance company. A good insurance company will allow you to keep the No Claim Discount, if the accident is clearly not your fault.

What's Wrong #15 - Police did not investigate

A few years ago, I lodged a report with the Commercial Affairs Department jointly with another person. We made a complaint against a person who was alleged to be cheating the public by offering forex training courses at high fees. We submitted documents to show that the representations made by him in his advertisements were fraudulent.

We followed up closely with the investigating officer over several months. We asked him for updates into the investigations. His reply was "still under investigation". He was not able to give any concrete information to us.

After six months or so, we received a reply that the matter had been closed, due to lack of evidence.

We insisted on meeting the investigating officer. I asked him, "Did you call up the person mentioned in our complaint for questioning? He said, "no". I asked him again, "You mean that you investigated for six months without even meeting this person to ask for his explanation to our allegations?". He said. "Yes". I know for a fact that he did not call me or my co-complainant for further clarification on our complaint.

One year later, I helped a group of people to lodge another complaint another person who allegedly cheated them on some investment. The outcome of the case was the same. The investigating officer reported after six months or so, that there was "no case".

In both cases, I strongly suspected that the investigating officer just prepare the paper reports and did the paper research. They probably did not call the complainants for further clarification or the persons complained against for their explanation.

What's wrong?
The police did not do the basic steps needed to investigate the complaint.

After a while, the parties who are committing fraud to cheat the public will get the impression that no action will be taken. They will continue to perpetuate one fraud after another.

They will close down one company who has a bad record of complaints and set up a new company to continue their fraudulent activities. Some of these fraudsters had continued their operations for more than a decade.

How to put it right
The investigating officer should call up the parties complained against to get their explanations on the allegations against them. He should also keep in regular touch with the complainants to get further clarification from them and to give them the assurance that their complaints are getting the required attention.

P2P Lending Platform

About Kelvin Teo, Chief Executive and Co-founder of Funding Societies

Kelvin Teo started Funding Societies while he was completing his MBA at Harvard Business School. Prior to starting Funding Societies, Kelvin graduated as the valedictorian of the Business School at National University of Singapore (NUS). Since college, he has been passionate about entrepreneurship, studying technopreneurship in University of Pennsylvania.

Under his leadership, Funding Societies has raised funds, recruited a team, launched the platform, originated S$1million in loans and introduced the first escrow Trustee arrangement in Singapore for platform fund handling within 6 months. His vision is to build a world-class marketplace with best practices observed in US and customized for the societies of Southeast Asia.

The Most Overlooked Principle of Investment in a Weak Economy
In my years as a consultant, I have advised and been mentored by many brilliant individuals including the CEO of major corporations and household names. Risk / return ratio was always the centrepiece of major decisions. While regulators and financial institutions are taking up more responsibility in the post-crisis world with Dodd-Frank and Basel III, we as individual investors should view investment return with a risk lens too, for risk is the shadow of return, the two sides of the same coin.

Many are attracted by the idea of “guaranteed investment return” or “maximum return minimum investment.” A Google search of these keywords gives us 3.2 million and 216 million results respectively.

However, these pursuits are inspirational but not aspirational. In financial markets and many commercial activities, if one wants to achieve higher returns on average, one often has to assume more risk. The key question is then not “How can I make the most return?” but rather “How can I make the most return at a risk I’m comfortable with?”

Four Common Approaches in Risk Management
In the practice of risk management, there are 4 common approaches towards risk i.e., avoid, transfer,
mitigate and keep. Most would inadvertently take the approach of avoid or keep i.e., avoid investment risk and not invest at all, or invest and face the full risk. In fact, based on an internal survey Funding Societies has conducted with 500 members of the public, 50% of the respondents across all segments keep their funds in saving accounts and do not invest. 19% of respondents consider returns but not safety of capital as critical investment criteria. Avoid and keep are common not because of ignorance, but because of convenience.

Importance of Diversification
Investing has to be deliberate. For most, we believe the right approach is to mitigate risk by systematically diversifying investment. While a focus strategy may be suitable for experts who dedicate hours into analyzing and monitoring investments, diversification is tremendously valuable for regular investors who prefer to “invest and forget”. Effective diversification is not only about making more investments, but also investing in areas less correlated with each other by geography, industry and asset class etc. This is especially true in a weak economic environment that is fraught with uncertainty.

I have personally invested in equity, investment fund, real estate and alternative investment, with of
course always 6 months of savings as contingency. I began with Asia equity and bond investment funds to achieve diversification even with limited capital. As I accumulated more capital, I ventured into US equity and Singapore real estate for further diversification. Diversification has helped me through many financial crises. By strategically allocating funds into a portfolio suitable for me, I only have to check my investments once a month and still enjoy reasonable returns.

P2P Lending Platform – A New Way to Diversify Your Investments
The recent rise in alternative investments such as peer-to-peer (P2P) lending in US, UK, Australia and China provides a new, proven opportunity for higher return and diversification. While higher return clearly comes with higher risk, it is at a level suitable for working professionals like me, especially given the shorter term and hassle-free nature of P2P lending. Investing on P2P lending has become my new favorite. A few P2P lending platforms have since launched in Singapore. An example is Funding Societies that focuses on small-medium enterprise (SME) loans.

Of course, diversification takes capital, cost and effort. Undue diversification could spread us too thin
across investments. The key is to select uncorrelated investments. The less correlated the investments
are, the better the diversification effect. One may ask: how do we know whether the investments are
correlated? Without going into a statistical model or correlation matrix, basic intuition is a good start.

As risk guru Michel Crouhy aptly summarized, “The future cannot be predicted. However, the financial risk that arises from uncertainty can be managed.” We need to be deliberate in our risk / return decisions and be diligent in diversification because if we don’t decide them for ourselves, the market will decide for us.

How the investors were enticed

Mary (who was cheated in the argawood investment) told me that she was approached by a telemarketer. She attended a seminar. She made her own investigation before investing. There was another argawood company that showed profit for the investment.

I told her that this was their mode of operation. The promoter set up a company on a small scale and allowed the initial investors to make a profit. After that, they were able to attract many investors for their bigger scale operations. Even the initial investors who made a profit put more money into the later operations. The later investors got stuck with non yielding trees. 

This is similar to the land banking plots. The earlier investors were able to sell their plots for a small profit (probably to buyers who were connected with the promoters). They were excited and made bigger investments. They also get their friends to come in.

It is the same story with the gold investments. The earlier investors were paid an attractive return. They came back to make bigger investments. The pattern is the same for all of these types of "scams".

Investment in Agarwood

Mary (not her real name) called me. She was caught in an investment in agarwood. Together with other investors, they had lodged a report with the police that they have been cheated. After 9 months, the police did not take any action. There was no progress. 

One of the person involved in the agarwood company was previously the sales manager of a gold investment company that was also closed down. He had since moved to this new investment company. 

Due to this bad experience, Mary is now convinced the people involved in the agarwood company are professional cheats. They know that they can carry out these activities and the police will not stop them.

Some of the investors came from outside Singapore. They thought that it was safe to invest in Singapore, due to government control, but they are now disappointed. Our reputation is going down the drain.

Hassle of booking an appointment

I called the Singapore National Eye Center to book an appointment. I still had to press 3 buttons before I talk to somebody.

For English, press 1
To book, change or cancel an appointment, press 1
To change or cancel an appointment, press 1 to book a new appointment press 2.

After getting through, I get a message ... "You are the first on the waiting list". Still I have to wait for a while before somebody answers.

I get the impression that the people who designed the IVR system wants to make the public go through many barriers.






It should have been quite easy to have the same staff handle booking, change and cancellation in 2 languages.

Gloomy forecast for property market

Here is a gloomy forecast for the property market in Singapore. I agree with this view, and has been stating a similar view for several years.

http://economyandmarkets.com/…/singapore-the-next-global-d…/

Fortunately, the government has the means to reduce the impact of a bursting of the bubble. Their measures so far, have stopping the bubble from getting bigger, but have not brought down the prices yet.

The government thinks that they can hold the market until the global market recovers. But this will take several years. My guess is that they cannot hold the market for that long.

So, the government will have to look for new ways to handle the looming crisis. Good luck to them.

Fight against global terrorism

When the terrorist attacked the World Trade Center in 2001, it was the American President who wanted to fight global terrorism.

Now it is Russia's turn to lead the fight against global terrorism.
https://sg.news.yahoo.com/putin-says-seeks-global-anti-terr…

Looks like musical chairs.