Tan Kin Lian's Blog: Useful to have a financial or insurance adviser

Sunday, June 24, 2007

Useful to have a financial or insurance adviser

I suggest the following approach for the ordinary lay person:

* learn about the basic aspects of financial planning (eg read my FAQs)
* use a low cost financial or insurance adviser

The adviser who can help you to make the best decision for your circumstances. If you do not take up a lot of their time, they can give you the advice for a low fee or to earn a modest rate of commission. For example, the advisers from NTUC Income falls into this category. By using the adviser, you can save a lot of time, and make a better decision.

For example, I can buy shares through the internet. But, I find it useful to go through a stockbroker. The fees have now come down to 0.3% (down from 1% a few years ago). I find it to be a fair rate of commission for the time spent by the stockbroker.

9 comments:

Anonymous said...: Just a suggestion, instead of giving commission, why not implement tipping? at least it gives consumers a choice to decide how much to give and how much the advice is worth to him or her. good service and advice, high tips. lousy advice and bad service, no tips.; June 24, 2007 11:58 PM
Khiat Han Hwee Adrian said...: That don't sounds like a good suggestion. Why don't we tip doctors or lawyers then?

Financial planners had taken great pains to acquire the necessary knowledge to help the general public. They are professionals and should be paid properly.; June 25, 2007 1:05 AM
Anonymous said...: Use a salaried adviser from ntuc business centre if you want real cheap products.
I have an ideal plan bought from an NTUC insurance agent and she didn't tell me that i could get abetter one from the centre. You believe what i found out. This ideal plan, id7, low cost and gives better return than the id2 i have. I strongly recommend that you go to the business centre if you are looking for a regular saving plan.
There are thing insurance agents would not tell you. This is one discovery i chanced upon after meeting a salaried adviser.
So check out before you buy anythjing from agents touting on the streets or shopping centre.; June 25, 2007 1:16 PM
Anonymous said...: I think NTUC should just convert all their non-salaried staff to salaried staff. After all, fees or commission, will skew the objectivity of the recommendation.

At least, with a salaried staff, they just do a financial plan, which is not too difficult anyway, as can be seen from Tan's FAQs. Furthermore there are a lot of people giving free financial advice. So what so difficult?

I don't think NTUC business centres consultants are any less well trained than those who are not salaried (agents) or running their own firms (IFAs). In fact, they are better and cheap.; June 25, 2007 6:33 PM
Anonymous said...: If they are cheap and accept no fee why not. Who cares if they are less qualified.We can overlook that as long we get what we want, right?
After all, all those agents out there are also half abked.
Cherrio to the business centre of NTUC; June 25, 2007 8:25 PM
Anonymous said...: The salaried staff from Income's got targets to meet also. There's no guarantee that they won't adopt a high-turnover/high-commission approach. The best solution is to educate yourselves in financial matters.

Mr Tan gave some bad advices too. For instance, he prophesied that the STI index will correct to the 2700 level.; June 26, 2007 4:38 PM
Khiat Han Hwee Adrian said...: Regardless Salaried or Commissioned. Both will act for social benefits of Singaporeans.

Those who have time to learn new financial knowledge, they will DIY their own financial plan. However, they risk getting the wrong plans and investments.

Some who have no time to learn, they will seek an adviser to help. A professional adviser will ensure client get best interest.

Business Centre is a good alternative channel, but might be difficult to fully take off as much volume of sales are probably from the Mobile agents. If all mobile agents are removed, will the company still generate sufficient volume of business? Its too big a risk to take.; June 26, 2007 6:56 PM
Anonymous said...: That's right, educate yourself. Invest in yourself. This is one sure way of fending off those hungry insurance agents who are only interested to make a sale. What do they know about investment? Putting your money in their hands is like having a fox in your coop.; June 26, 2007 10:06 PM
Anonymous said...: Sometimes having an adviser can make things worse.Run as fast as possible when an adviser tells you that he or she is sincere and that they can help you with claims and other non financial services and not telling you how competent they are. The Financial Advisory Act does not stipulate that an adviser to be fit and proper has to be sincere also. Instead the emphasis is on Integrity, honesty and competent.
Sincerity alone is dangerous as you
have seen many cases of investors
losing money to a trusted but incompetent adviser.
So choose carefully an adviser; get a referral or seek the professional bodies for help; June 30, 2007 3:51 PM