Rejection of Travel Insurance Claim

A school boy sustained a fracture on an overseas trip. He was covered under a group travel insurance policy. The insurance company rejected the claim submitted by the parent, for a reason that is not clear, and potentially wrong. The parent sought my views.

http://tankinlian.com/admin/file.aspx?id=722&IID=728

Shocking experience with Investment Linked Policy (ILP)

Many consumers bought investment linked policies (ILP). They were actively marketed by insurance agents as a good solution to provide insurance protection and to achieve the gains of long term investing in stocks. The benefit illustration project returns of 5% and 9% (which is rather optimistic).

Most insurance agents did not explain to the consumer that the high charges of the ILP take away a large part of the non-guaranteed return from the investments, leaving almost nothing to the consumer for the first 15 years.

Read the experience of "Ms. Koh" who was shocked to learn that her ILP gave her a large loss after 12 years, when the stock market actually performed well. Her shocking experience reflects what has been happening to tens of thousands of unsuspecting purchasers of many ILP policies.
http://tankinlian.com/admin/file.aspx?id=716&IID=722

In recent years, some insurance companies have been bold in increasing the charges to unconscionable levels. If you have bought an ILP policy, you should read this article carefully and look at your benefit illustration to see if you are in a similar situation to "Ms. Koh."

If you have been misled or badly advised by the insurance agent or financial adviser, you should also consider writing to the Monetary Authority of Singapore.

Investing in blue chip shares

Isabel attending my course on financial planning. She also attend the previews of other courses on financial planning, investing and trading conducted by other trainers, which were actively marketed. She sent this message to me recently.

"A Merry X’mas and a Happy New Year. After all the previews that I have gone through, I find the traditional way taught by you is still better as the backbone and peppered with some trading for cash flow. Isabel".

Big cut in maturity benefit

Many consumers buy life insurance with a large amount of non-guaranteed bonus, especially the bonus that is supposed to be paid on maturity. In the benefit illustration, you will see that the non-guaranteed bonus is low during most of the duration and they escalate sharply during the last few years or the last year. You must be wary of this type of projection, as the bonus may not be taken away, for no justifiable reason. This is what has been experienced by this policyholder. At one time, this was not possible, i.e. the regulator will question the insurance company that cuts the bonus with justification, but today, nobody cares. Be careful and avoid this type of policy.

http://tankinlian.com/admin/file.aspx?id=715&IID=721

Here is an example of a policy with a stepped up non-guaranteed bonus during the last few years. Consumers should avoid them. http://tankinlian.com/admin/file.aspx?id=668&IID=671

Tricked by a forex trainer

The consumer share his experience on how he was tricked into attending a forex training course and the distress that he suffered as a result of this incident. He wants other consumers to avoid falling into this trap.
http://tankinlian.com/admin/file.aspx?id=721&IID=727

Keeping the town clean

I prefer that the role of keeping the town clean revert back to the HDB, as it was in the old days. It does not make sense to waste the time of lawmakers, i.e. the MPs, to do the nitty gritty work of collecting the monthly charges and engaging the contractors.

In most other places, the town councils have much wider responsibilities in looking after the local services, such as buses, schools, libraries and the like. These councils are likely to be elected directly by the residents and are not the same people as the lawmakers.

The situation is quite convoluted in Singapore, due to the unnecessary petty politicking. If the lawmakers have to waste time in looking after trivial matters, they cannot spend the time to do their proper work, which is to represent the views of their voters in Parliament and to give meaningful debate to the laws that are to be passed. Our laws are quite outdated, and many key issues are not resolved.

It is time for our government leaders to realize that there are important issues that need to be addressed, and that the lawmakers should not waste their time on activities that can be better handled by other people.
  

Sale of Town Council software

I continue to be amazed with the happenings in our town councils. It seemed to have grown in to a monstrosity, with so many issues. It would have been better that the town councils were run independently of the elected lawmakers in the first place. We now have to face a complicated and convoluted arrangement arrangement, which makes life very complicated for every body.
http://singaporemind.blogspot.sg/2012/12/sale-of-town-council-software.html

Dangerous to give investment advice

An elderly lady, whom I shall refer to as "Nancy", made a loss of nearly $200,000 from her investments. She is not knowledgeable about investments, but was assured by the relationship manager of a local bank that he would recommend good investments to her, based on his expert knowledge.

Nancy trusted the young man, who gave the impression of being knowledgeable and called her to make many recommendations. Nancy accepted some of the recommendations and invested her money. She trusted that the young man would monitor her investments and contact her about the progress.

He only called her about the investments that made a profit and encouraged her to sell them and re-invest in other investments. Nancy asked about the other investments, but the young man assured her not to worry and he would call her when they made a profit.

As the months go by, some of the investments went really bad. In one case, the loss was nearly 50% on an investment of $200,000. It was a terrible blow to Nancy as she was not aware that such a large sum was being invested. Nancy held on to this investments but decided to sell some other investments at big loss.

This is my advice to the young people who think that they can advise other people about investments. Investing is not easy. If someone ask me for advice on specific shares and whether the shares would move up in value, my standard reply would be, "the current price of the share reflects the views of all the people in the market. The share price can move up or it can move down. Nobody knows for sure".

If, with my experience, I have no clue about which shares are good value for money and which shares would move up, how can a young person know better? It is dangerous for an ignorant and inexperienced person to pretend to be an "expert" and to mislead elderly people into making investments that can lose a lot of money. It is dangerous to allow them to give investment advice to elderly people under the banner of a trusted bank.

Ask Mr. Tan

You can search for many articles here:
http://www.tankinlian.com/Ask.aspx

Do not trust your bank to advice on investments.

Many banks are employing young people to be "Relationship Manager" or "Wealth Manager" to advice elderly people, with plenty of cash, in their investments. These RMs are not experienced in the world of investments and are giving bad advice to the elderly people, causing them to suffer large losses. The RMs main focus is to meet the sales targets. They are recommending questionable investments created overseas and are not suitable to be sold to unwary retail investors. 
Read this sad story about the experience of "Nancy"
http://tankinlian.com/admin/file.aspx?id=720&IID=726

Nancy said, "Why are people in Singapore so dishonest nowadays?"

Best wishes for 2013

Set a good example for charity

Lucky Tan ask the Government to set a good example on charity
http://singaporemind.blogspot.sg/2012/12/charity-and-singaporean-govt.html

Questionable products and insurance policies

http://tankinlian.com/Admin/Information.aspx?CatID=2

Questionable investments

Here is the Power Point of a talk on "Questionable Investments" that will be conducted by FISCA. It shows several questionable investments and scams that have been actively marketed in Singapore in the past and currently. Some of these investments will return in other forms. Be ready to spot them, and don't get cheated.
http://tankinlian.com/admin/file.aspx?id=719&IID=725

Find the Hidden Code

Be the first person to find the hidden code for any of the three sets of 6 puzzles (i.e. puzzles 1 to 6, puzzles 7 to 12 and puzzles 13-19) and win a prize - Intelligence Quiz book. Three prizes will be given. The answers have to be posted in www.facebook.com/kinlian.
http://tankinlian.com/admin/file.aspx?id=718&IID=724

How to replace cheque payments

78 million cheques are cleared through the banking system in Singapore a year. This works out to an average of 18 cheques per person. This number must be higher than most other countries in the world.

With the availability of electronic payments, there is no need for so many cheques to be used. It is time consuming and costly, considering the time spent to write and mail the cheque, for the receiving party to receive and bank in the cheque, and for the bank to enter the transactions for clearing.

While there are several ways to make electronic payments, e.g. GIRO, internet banking, AXS and SAM, these channels are used mainly for regular payments to large organizations. They are not suitable for once-off payments to small businesses, which now use cheques to make and receive most of their payments.

I suggest that our banks in Singapore make the following changes to allow more people to make payments using their ATM or internet banking facilities:

a) allow the payer to make an electronic payment to a bank account number and view the name of the receiving party

b) allow the payer to enter a number, e.g. the invoice number or customer number,to identify the payment

c) allow the receiving party to download details of these payments, and view the name of the payer

These changes may require some of the existing regulations of the Monetary Authority of Singapore (MAS) to be changed, e.g. to disclose the name of the other party in the transaction. 

Most banks should be able to implement these changes  to their existing systems quite easily and at a low cost. If the changes are made, most people would prefer to use the electronic payments, instead of cheques. This change can be accelerated if banks are allowed to levy a fee for the use of cheques, which is more costly for them to process.

The United Kingdom have set a target to eliminate the use of cheques by 2018. I urge our MAS to take the lead, so that Singapore can largely, if not entirely dispense with the use of cheques at an earlier date.

Potential investment scam

A Poly student consulted me about this investment. He was introduced by his friend to two companies which made  vague presentations promising high return through landing bank, convertible bonds and pre-IPO shares allotted through private placement.  

He carried out his research on these two companies and their management from their websites and had a hunch that this could be another Ponzi scheme. Several of his friends and other teenagers that had invested tens of thousand of dollars into these companies. If this is a scam, he wanted them to be stopped before more people are caught in it.

I told him to collect evidence of the investments made by his friend. There is a law that issue of shares to the public require approval to be obtained from the Monetary Authority of Singapore These two companies could be breaking the law.

Be more gracious

Alex Au has written this excellent article about what is needed to make Singaporeans more gracious and generous.
http://yawningbread.wordpress.com/2012/12/22/singaporeans-stressed-out-by-strangers-smiles/

Yield on a life annuity

Here is a simple way to calculate the yield on a life annuity.
http://tankinlian.com/admin/file.aspx?id=717&IID=723

US fiscal cliff and the relevance to Singapore

This is an excellent article explaining the need for change, and for political leaders to exercise leadership to change and compromise.
http://singaporemind.blogspot.sg/2012/12/the-genius-in-us-fiscal-cliff-and.html