Tuesday, February 08, 2011
Family Life - (game restarted)
The Family Life game has restarted, after rectifying a problem with the server program. Please try the game and win one of 120 book prizes in the day.
Is life insurance good or bad?
Life insurance is inherently good. It allows people to pool the risk of premature death and to save for their future needs.
It becomes bad when insurance companies and agents takes away too much of the accumulated savings (i.e. as much as 50%) to pay for expenses and the cost of insurance and gives a poor deal to the consumer. The actual cost of insurance in most cases is less than 10%. It becomes worse, when the insurance agent tells lies and half truths to mislead the consumer into investing their hard earned savings in a poor yielding product.
In the old days (i.e. prior to this century), most life insurance companies and agents acted honorably and deliver fair value to the consumers. Today, the situation is quite bad, and it seemed that many products are designed to rip off the unsuspecting consumers.
I wish to educate consumers and the practitioners, so that the practitioners realize that they are not doing the right thing, and will change their practice and make life insurance a good product for the consumers.
Tan Kin Lian
It becomes bad when insurance companies and agents takes away too much of the accumulated savings (i.e. as much as 50%) to pay for expenses and the cost of insurance and gives a poor deal to the consumer. The actual cost of insurance in most cases is less than 10%. It becomes worse, when the insurance agent tells lies and half truths to mislead the consumer into investing their hard earned savings in a poor yielding product.
In the old days (i.e. prior to this century), most life insurance companies and agents acted honorably and deliver fair value to the consumers. Today, the situation is quite bad, and it seemed that many products are designed to rip off the unsuspecting consumers.
I wish to educate consumers and the practitioners, so that the practitioners realize that they are not doing the right thing, and will change their practice and make life insurance a good product for the consumers.
Tan Kin Lian
Track intrusions and suicides
Dear Mr. Tan,
I searched on other cases of wastage of public funds by the government. Here is what i found from the internet. I think the government should have spent the money building the half-height platform screen doors in a better manner.
It seems 'about 20 to 30 cases of track intrusions' are 'occurring for each of the past few years'. I wonder if anyone has statistics about how many track intrusions happened before the past few years?
Maybe the opposition parties can have an inquiry on the true number of suicides in Singapore, interview the coroners in Singapore. It seems there are so many so-called 'track intrusions' which are actually suicides or suicide attempts which have gone unnoticed by the average Singaporean.
Spa Victim
====================================================================
Date of Reply : 27/10/2010
Reply : Dear Sir/Madam,
Installing Half-Height Platform Screen Doors (HHPSD) at elevated stations eliminate system downtimes caused by accidental track intrusions. HHPSD are found to be the most reliable, proactive and cost effective way to reduce the overall levels of track intrusion and thus significantly increase passenger safety at the station platform.
Although there are warning signs to discourage track intrusions and there are also in-station announcements to remind passengers to stand behind the yellow line, there are still about 20 to 30 cases of track intrusions occurring for each of the past few years. These have caused train service disruptions and affected the travelling of other commuters. The provision of HHPSD will reduce significantly train service disruption caused by unintended track intrusion.
Land Transport Authority
I searched on other cases of wastage of public funds by the government. Here is what i found from the internet. I think the government should have spent the money building the half-height platform screen doors in a better manner.
It seems 'about 20 to 30 cases of track intrusions' are 'occurring for each of the past few years'. I wonder if anyone has statistics about how many track intrusions happened before the past few years?
Maybe the opposition parties can have an inquiry on the true number of suicides in Singapore, interview the coroners in Singapore. It seems there are so many so-called 'track intrusions' which are actually suicides or suicide attempts which have gone unnoticed by the average Singaporean.
Spa Victim
====================================================================
Date of Reply : 27/10/2010
Reply : Dear Sir/Madam,
Installing Half-Height Platform Screen Doors (HHPSD) at elevated stations eliminate system downtimes caused by accidental track intrusions. HHPSD are found to be the most reliable, proactive and cost effective way to reduce the overall levels of track intrusion and thus significantly increase passenger safety at the station platform.
Although there are warning signs to discourage track intrusions and there are also in-station announcements to remind passengers to stand behind the yellow line, there are still about 20 to 30 cases of track intrusions occurring for each of the past few years. These have caused train service disruptions and affected the travelling of other commuters. The provision of HHPSD will reduce significantly train service disruption caused by unintended track intrusion.
Land Transport Authority
High cost of motor repair
Dear Kin Lian,
I got involved recently in a minor accident with an SMRT taxi. It was my fault as I followed too closely from behind and bumped into the back light of the old taxi. The resulting damage was a hole in the plastic of a back light. I agreed to pay for the repair. I repaired my own car for $230.
SMRT wanted to charge me $1,635 for the damages to be repaired at their own workshop. I asked them to fix the repair at my nominated workshop but they refused. I felt that it was an extortion. I did not want to make an insurance claim as it would affect the NCD.
I called the Traffic Police, General Insurance Association of Singapore and CASE. None was willing to help. I called the Police as it was a case of blatant extortion and cheating. They advised me to engage a lawyer. Are there any other avenues that I can get help?
REPLY
It is a shame that a big company like SMRT can resort to this type of bad practice. It is also a shame that CASE does not wish to take up this case, as they do get a lot of funding from the government to do their work. I suggest that you offer a fair sum, say $500, to SMRT.
I also suggest that you write to the newspaper about your case.
I got involved recently in a minor accident with an SMRT taxi. It was my fault as I followed too closely from behind and bumped into the back light of the old taxi. The resulting damage was a hole in the plastic of a back light. I agreed to pay for the repair. I repaired my own car for $230.
SMRT wanted to charge me $1,635 for the damages to be repaired at their own workshop. I asked them to fix the repair at my nominated workshop but they refused. I felt that it was an extortion. I did not want to make an insurance claim as it would affect the NCD.
I called the Traffic Police, General Insurance Association of Singapore and CASE. None was willing to help. I called the Police as it was a case of blatant extortion and cheating. They advised me to engage a lawyer. Are there any other avenues that I can get help?
REPLY
It is a shame that a big company like SMRT can resort to this type of bad practice. It is also a shame that CASE does not wish to take up this case, as they do get a lot of funding from the government to do their work. I suggest that you offer a fair sum, say $500, to SMRT.
Growth fund vs STI ETF
Dear Mr Tan KL,
I would like to ask your advise on a good investment strategy for my CPF special account, since the money is for the long term. Is there a safer product that gives a better return than the 4-5%) offered by CPF? Would you consider NTUC Income's Gowth Fund as a good investment?
REPLY
The Growth Fund has an annual fee of about 1% p.a. and an upfront cost of about 3%. The STI ETF has an upfront fee of 0.3% and an annual fee of 0.3%. The risks of both funds are similar. Over a 20 year period, the STI ETF should be able to get a yield that is about 15% higher than the Growth Fund, based on similar risk profiles. It is better to choose the STI ETF than the growth fund.
If you do not wish to take the risk and uncertainty, it is better to leave your money in the special account as the interest rate is quite attractive.
I would like to ask your advise on a good investment strategy for my CPF special account, since the money is for the long term. Is there a safer product that gives a better return than the 4-5%) offered by CPF? Would you consider NTUC Income's Gowth Fund as a good investment?
REPLY
The Growth Fund has an annual fee of about 1% p.a. and an upfront cost of about 3%. The STI ETF has an upfront fee of 0.3% and an annual fee of 0.3%. The risks of both funds are similar. Over a 20 year period, the STI ETF should be able to get a yield that is about 15% higher than the Growth Fund, based on similar risk profiles. It is better to choose the STI ETF than the growth fund.
If you do not wish to take the risk and uncertainty, it is better to leave your money in the special account as the interest rate is quite attractive.
Lessons from Cairo
There is an interesting article in SGEP about the lessons that Singapore can learn from the events in Egypt.
Trading in Forex
Many people trade in foreign exchange. They buy or sell US dollar, Euro or Japanese yen. Many talks are being conducted, with high fees, to teach people how to trade in these currencies. But these novice traders are not aware about the risks, and the likelihood of losing in the long run, against the big institutions that trade against them and have the potential to manipulate the market. Read an article in SGEP called Forex Folly.
Monday, February 07, 2011
FISCA Talk on Structured Products
Many investors have lost a lot of money by investing in risky structured products. They did not know the risks and have been burnt. Others had the money stuck for several years at a miserable rate of return,. While they did not lose the principal. they have lost 10% to 20% in potential return that they could be earned from other investments of similar nature.
Financial institutions have started to launch new structured products. Do you know the good from the bad products? Do you want to be caught in the next round of bad products?
To avoid a risky or poor deal, you have to understand what are structured products, what to look out for and the risks to avoid.
FISCA has invited an expert on structured products, Paula Tan, to give a talk on 19 February 2011. An outline of the talk and register for the talk can be found at www.fisca.sg/events. You can also register for the talk at this website.
Do attend this talk and be wiser, and avoid a big potential loss in the future.
Tan Kin Lian
Difficulty in contacting M of Manpower
I login to the MOM website (WP Online) to check for my firm's quota to employ work permit holders. It was quite difficult to understand the mess of information. I had to call the call center. I searched the website of MOM and even tried the "search" field. I could not find it. I know that there is a call center - as I called them before, but I don't understand why MOM made it difficult for the public to reach their call center.
Tan Kin Lian
Tan Kin Lian
A chat with Dr. Shetty
Dr. Shetty is a world renown heart surgeon. Read this article, sent to me by Robby Tulus.
Prize for Family Life Game
Read this Guide on how you can win any of 120 prizes for Family Life each day. The prize is Practical Guide on Financial Planning $12.
Prize for Family Life
I am giving away the book, "Practical Guide on Financial Planning" ($12) to any player who has achieved any of the top 5 positions in any game of Family Life. A game is created each hour, so you have the chance to win any of the 120 books in a day.
Each player is entitled to win the prize only once. To claim your prize, you have to take a screen shot of the final year, showing the results of your avatar and its place within the top 5 positions for the year. This is to be sent to kinlian@gmail.com. An example of the screen shot is found here. In this example, the avatar #1 (current player) has achieved the 3rd position and is entitled to a prize.
This prize will be awarded until further notice.
Each player is entitled to win the prize only once. To claim your prize, you have to take a screen shot of the final year, showing the results of your avatar and its place within the top 5 positions for the year. This is to be sent to kinlian@gmail.com. An example of the screen shot is found here. In this example, the avatar #1 (current player) has achieved the 3rd position and is entitled to a prize.
This prize will be awarded until further notice.
Electronic Queuing
I read in the newspapers that a grandparent queued for several days for a place in the kindergarten for a grandchild. They felt that it was worth putting in the sacrifice for the grandchild. We also read about several day queues for places in primary school and for new property launches.
The several day queues have become ridiculous but is a feature of Singapore life - the outcome of our kiasu syndrome. There is a more sensible way to handle the queue. It is the electronic queue. It is possible to develop a portal to allow a queue to be formed for any type of high preference activity and for electronic balloting to be conducted to find the priority in the queue among all the applicants who submitted their application by a closing date.
Tan Kin Lian
Here is my letter printed in the Straits Times Online Forum.
The several day queues have become ridiculous but is a feature of Singapore life - the outcome of our kiasu syndrome. There is a more sensible way to handle the queue. It is the electronic queue. It is possible to develop a portal to allow a queue to be formed for any type of high preference activity and for electronic balloting to be conducted to find the priority in the queue among all the applicants who submitted their application by a closing date.
Tan Kin Lian
Here is my letter printed in the Straits Times Online Forum.
Sunday, February 06, 2011
SGEP Editorial on Election Year
SGEP has an editorial on Election Year 2011. We also welcome contribution from readers. Go to www.easyapps.sg/sgep.
Family Life - compete with your friends
You can play the Family Life game here:
http://projects.easyapps.sg/fl/
Read the guide for instructions on how to play the game. You can invite a few friends to play the same game, so you can compete against each other. It is fun. This game can be accessed on the mobile platform in a month's time, so you can play on it while in the train or during a break.
http://projects.easyapps.sg/fl/
Read the guide for instructions on how to play the game. You can invite a few friends to play the same game, so you can compete against each other. It is fun. This game can be accessed on the mobile platform in a month's time, so you can play on it while in the train or during a break.
Overcharging for replacement parts
The remote controller for my Carrier air conditioner failed. The price for a replacement is more than $150. Fortunately, I was able to find a universal remote controller from Korea that worked with the Carrier air conditioner for $10.
It is quite unfair for a company to levy an excessively high charge for a spare part that they designed specifically for their product. The motor car manufacturers also charge a high price for their keys.
As the manufacturer chose to have a special design for the remote controller or their key, they spare parts should be considered as a monopoly item and should be subject to anti-monopoly laws. The law should dictate what is a fair price and what is an excessive price.
It is quite unfair for a company to levy an excessively high charge for a spare part that they designed specifically for their product. The motor car manufacturers also charge a high price for their keys.
As the manufacturer chose to have a special design for the remote controller or their key, they spare parts should be considered as a monopoly item and should be subject to anti-monopoly laws. The law should dictate what is a fair price and what is an excessive price.
CPFTA now applies to financial services
The Consumer Protection and Fair Trading Act now applies to financial services. I urge consumers, who have been misled into bad investment products, to prepare your case to lodge a complaint under the CPFTA. The fact that you have signed a form does not absolve the financial adviser or the financial institution from their culpability under the CPFTA of misleading the consumer.
Read this FAQ carefully to see which category of wrongdoing the act or negligence may fall under: http://tankinlian.com/admin/file.aspx?id=384
I also wish to ask lawyers to come forward and help to take some of these cases on behalf of consumers. Please charge modest fees as the consumer is not able to pay high fees. You may get a chance to make a name for your firm as doing good for consumers and for society. If you are interested, send an email to kinlian@gmail.com.
Tan Kin Lian
Read this FAQ carefully to see which category of wrongdoing the act or negligence may fall under: http://tankinlian.com/admin/file.aspx?id=384
I also wish to ask lawyers to come forward and help to take some of these cases on behalf of consumers. Please charge modest fees as the consumer is not able to pay high fees. You may get a chance to make a name for your firm as doing good for consumers and for society. If you are interested, send an email to kinlian@gmail.com.
Tan Kin Lian
Dishonest financial advisers and culpable insurance companies
I encountered the following two cases recently.
Case One. A consumer was advised by the adviser to invest a single premium of $50,000 as an investment in a life insurance policy, on the promise that it could give a better return than interest rate on CPF. She was not well educated or savvy. She was sold a annual premium policy with an annual premium of $50,000. When the second premium became due, she asked the adviser to explain why she had to pay another $50,000. He told her to ignore the request for the payment. The consumer learned later that there was a large deduction from the accumulated savings, which became clear only after one year. She complained to the insurance company. She had to go for interviews and encountered a lot of delays. I understand that the case has still not been solved.
Case Two. A foreigner, working in Singapore, was sold a life insurance policy on the misrepresentation that it was an investment product. The monthly premium was $3,500. She discovered to her horror, that 5% of the premium was deducted every month from the savings after 18 months. The financial adviser deliberately lied to her that the deduction was only 0.7% (which must be the fund management fee). The other deduction, to pay the distribution cost, was hidden from the consumer, who had asked about it. The consumer asked for my advice on what she can do now to recover her loss. I asked her to write to the newspapers.
In both cases, I have used "she" to refer to the consumer and "he" to refer to the adviser. This may not be the real genders in the actual cases.
The culpability does not lie with the financial advisers alone. They also extend to the insurance companies that designed the products to levy a high upfront charge and hide the charge from the consumers. This allowed the dishonest agents to mislead the unwary consumers.
Tan Kin Lian
Case One. A consumer was advised by the adviser to invest a single premium of $50,000 as an investment in a life insurance policy, on the promise that it could give a better return than interest rate on CPF. She was not well educated or savvy. She was sold a annual premium policy with an annual premium of $50,000. When the second premium became due, she asked the adviser to explain why she had to pay another $50,000. He told her to ignore the request for the payment. The consumer learned later that there was a large deduction from the accumulated savings, which became clear only after one year. She complained to the insurance company. She had to go for interviews and encountered a lot of delays. I understand that the case has still not been solved.
Case Two. A foreigner, working in Singapore, was sold a life insurance policy on the misrepresentation that it was an investment product. The monthly premium was $3,500. She discovered to her horror, that 5% of the premium was deducted every month from the savings after 18 months. The financial adviser deliberately lied to her that the deduction was only 0.7% (which must be the fund management fee). The other deduction, to pay the distribution cost, was hidden from the consumer, who had asked about it. The consumer asked for my advice on what she can do now to recover her loss. I asked her to write to the newspapers.
In both cases, I have used "she" to refer to the consumer and "he" to refer to the adviser. This may not be the real genders in the actual cases.
The culpability does not lie with the financial advisers alone. They also extend to the insurance companies that designed the products to levy a high upfront charge and hide the charge from the consumers. This allowed the dishonest agents to mislead the unwary consumers.
Tan Kin Lian
Are all financial advisers bad?
Are all financial advisers bad? The truth is - they belong to different categories.
Some financial advisers are honest, and do take care of the best interest of their clients. Some are crooks who knowingly tell outright lies and half lies to con their consumers. The majority fall in between, i.e they think that, having put in the effort to achieve the insurance qualifications, it is only right that they should make a living by doing what they are trained to do. Many are not aware that the products give a poor deal to the consumers - some know but do not really care - they have to make a living.
There are quite a few financial advisers who are outright crooks. Some consumers who were conned by them have sought my assistance. These crooks are able to carry out their misdeeds with impunity. When the consumer complained to the insurance company, they received excuses and encountered delays. Some consumers give up trying to lodge the complaint.
It is this bad situation that prompted me to advice consumers to avoid all financial advisers. It is difficult for an unwary consumer to tell an honest financial adviser from a crook. They are likely to be give a bad product anyway, even from the advisers who may not be acting dishonestly.
Singapore had been following the practice of UK and Australia in the regulation of life insurance sales. The regulators adopted the approach of requiring the financial advisers to act honorably and professionally - whatever that means. UK and Australis have decided to abandon the professionalism approach and have taken the drastic step of banning the payment of commission on life insurance products. They found that it is impossible to manage the conflict of interest.
Some financial advisers do not like my message and have resorted to making personal attack against me in other blogs. They claimed that, when I was in NTUC Income, I had been using agents to sell life insurance products. These people are either ignorant or malicious in distorting the truth. They should know that the commissions paid to the insurance agents in NTUC income during my time were much lower than the market rates and the insurance products offered fair value to consumers. This is how despicable the crooked financial advisers can be.
Tan Kin Lian
Some financial advisers are honest, and do take care of the best interest of their clients. Some are crooks who knowingly tell outright lies and half lies to con their consumers. The majority fall in between, i.e they think that, having put in the effort to achieve the insurance qualifications, it is only right that they should make a living by doing what they are trained to do. Many are not aware that the products give a poor deal to the consumers - some know but do not really care - they have to make a living.
There are quite a few financial advisers who are outright crooks. Some consumers who were conned by them have sought my assistance. These crooks are able to carry out their misdeeds with impunity. When the consumer complained to the insurance company, they received excuses and encountered delays. Some consumers give up trying to lodge the complaint.
It is this bad situation that prompted me to advice consumers to avoid all financial advisers. It is difficult for an unwary consumer to tell an honest financial adviser from a crook. They are likely to be give a bad product anyway, even from the advisers who may not be acting dishonestly.
Singapore had been following the practice of UK and Australia in the regulation of life insurance sales. The regulators adopted the approach of requiring the financial advisers to act honorably and professionally - whatever that means. UK and Australis have decided to abandon the professionalism approach and have taken the drastic step of banning the payment of commission on life insurance products. They found that it is impossible to manage the conflict of interest.
Some financial advisers do not like my message and have resorted to making personal attack against me in other blogs. They claimed that, when I was in NTUC Income, I had been using agents to sell life insurance products. These people are either ignorant or malicious in distorting the truth. They should know that the commissions paid to the insurance agents in NTUC income during my time were much lower than the market rates and the insurance products offered fair value to consumers. This is how despicable the crooked financial advisers can be.
Tan Kin Lian
Family Life 1.1
A new game is automatically created every hour. You can ask your friend to join and compete with you in the same game. You can watch the progress of the human players under the tab "human avatars". It is quite fun and additive. www.easysearch.sg (Family Life).
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