Saturday, January 26, 2013

Stop paying premium

Many consumers were told by insurance agents that they need to pay premium for 10 to 13 years. After that, they can stop paying premiums, and the policy can continue "smoothly".

The consumers did not realize that when the stop paying premiums, the premiums are being charged to their cash values and interest is added at a high rate. The cash value can run down and may eventually eat away the entire policy. All the premiums paid previously would be gone.

When the consumers learned that this is how the policy worked, they were shocked. They did not realize that their past savings would be gone.

This type of sales presentation had a high risk of being misleading to consumers. Many consumers had been misled into entrusting their savings into this type of policy.

Cooling the property market

Despite its limited land,
Singapore has long had one of the most open policies for foreign buyers here.
This has caused prices to spiral and cut into its voter popularity in recent years.
Recently, a friend read with incredulity
that a S$1.5mil private condo in Singapore was described as medium-cost.
“How on earth can a graduate start-up hope to afford one?”
he asked.

Friday, January 25, 2013

Private settlement of Ferrari accident

The insurance company finally agreed not to recover third party liability claims from the family of the Ferrari driver. They do not have the legal right anyway. It was quite bad for them to posture in this manner.

Winner of Jan 2013 Quiz

Josh Kuah won the prize for being the first person to mail the correct answer to me for this quiz:

The correct answer is "Francis". A few other people sent the answer after him.

If you are interested to try other puzzles, here are the puzzles. The answers are on the next page:

You can buy the book, Intelligence Quiz, at

Long delay for GIRO authorization

21 January 2013 (not published)

Editor, Forum Page
Straits Times

I applied to Standard & Chartered Bank to have my 
credit card bills paid by GIRO from my DBS Account.

SCB required me to submit an authorization form. On
receiving it, they told me that it would take 4 to 6 weeks for
the request to be processed.

Why does it have to take so long? Why does the process
have to be manual?

I already have a security token with DBS bank. Surely, it 
should be possible for me to login with 
the security token, authenticate my identity and make the 
request to DBS Bank to accept bills from the billing organization?

SCB said that they did not receive my 
first authorization form sent by mail. I had to send them a second form.
 I finally managed to get the GIRO authorization approved after 
six months, allowing for time lost due to communication.

Why are we still using wasteful and time consuming 
process, when a more efficient online version should be 

Bad to allow advisers to sell investment-linked policies

It is dangerous to allow "financial advisers" to sell investment-linked policies and earn high upfront commission. 

There is a real risk of consumers being badly advised about the risks of investing, such as:

a) the projected return on the funds are often exaggerated, e.g. a gross return of 8% when a more likely return is 6%
b) the net return to the consumer is much lower than the gross return, e.g. a deduction of 4%, and this is "hidden" from the consumer
c) the assertion that the insurance company and the adviser has the ability to pick better stocks to improve the return on equities.
d) the false belief that they can improve their return through advice on switching and market timing

Many consumers have bought investment-linked policies on the above mistaken notions. Stock brokers are not allowed to give these type of advice, but it seemed to be quite rampant with the financial advisers.

In many cases, the advisers were not aware of the pitfalls. Being new to the game and inexperienced, they were taught the above marketing points by their trainers, and they pass the message to their family and friends, quite naively.

Even the reduced commission rates recommended by the FAIR Panel are too high and the risk of mis-selling remains, especially with the investment-linked policies.

I do not wish to imply that all financial advisers fall into this mold, but I suspect that many do. To a knowledgeable person, it just does not make sense for consumers to be bearing a high upfront cost where the adviser does not really give any value.


Many of our government policies are quite complicated and baffling, e.g. public transport, foreign workers, housing, medical care. A good term to describe it as "convoluted".

Instead of addressing the root cause of the problems, the government has been applying the approach of "tweaking" and "calibrating", which often led to worse outcomes. 

I read a statement from a government leader that it is not easy to "re-nationalize" public transport. Many people may not realize that some parts of the system are already under central control, e.g. setting of fares, and funding of capital expenditure on buses. So, we are already partly under central control and partly under privte sector control. By continuing our current structure, we are getting the worse of both systems.

I wanted to find a word to describe our approach, and the word "oxymoron" comes to my mind. It is defined as "A rhetorical figure in which incongruous or contradictory terms are combined, as in a deafening silence and a mournful optimist."

I will be writing more about these issues. 

How to improve service quality

I agree with the views posted by several readers about improving service quality, such as:

a) better training
b) leaders to show a good example
c) create a service culture
d) instill pride in the work
e) better pay and tips
f) a better work environment

I wish to share my observation on one key practical measure that can be implemented in all service organizations, serving customers. It does not add to the cost, and make all of the above measures produce an effective outcome.

Over the years, I have seen just a few places, e.g. hotels, restaurants, with excellent customer service - and the captain or supervisor is visible. This is the person who is clearly identified and makes it a point to look around and see that all the customers are being served.

The captain does not do the work of the waiter, but is wiling to help on emergency, but the main function is to have a bird's eye view.

When the captain or supervisor is around, you can be sure that the waiters or service staff do not idle and gossip. they focus on their work.

The captain is also available to handle the difficult customer issues, so that the service staff can do their physical duties, without being distracted.

Forty years ago, I brought my guests to a restaurant in Raffles Hotel. My guest found a piece of metal in the meal and showed it to the waiter. Five minutes later, the general manager came out to explain how the metal got into the food and waive the entire bill! They have an excellent system of escalating difficult problems beyond the captain to the top.

Often, these excellent places have captains or supervisors that come from overseas. It seems that they have a better service culture and train their people better. We learn to learn from them on these skills and culture.

Learn how to solve Einstein's Quiz

Here is a chance to learn how to solve Einstein's Quiz and to win a Prize.

Thursday, January 24, 2013

How to cope with a demanding boss

Here are my tips on how to cope with a demanding boss. More people have to face this situation as the workplace becomes more stressful and competitive. 

I have to state upfront that these tips do not apply to everybody and to all situations. You can follow them if you find them useful, or just ignore them if you find them to be not relevant (please note that I do not wish to enter into a debate).

Here are some points for you to consider:

1. You cannot change your boss; but you can change your attitude adn your approach.
2. If you find your boss to be demanding, quite possibly, half of the blame lies with you.
3. If you are useful to your boss, your boss will not be demanding, as he would not like to lose you. If your boss is demanding, it is likely that you are not useful to your boss.
4. A boss who behaves unreasonably and over-demanding is likely to lose many workers, and that would reflect badly on his people skills.

Having worked with may people, I find that the bad performers tend to have the following characteristics:

1. They take too long to complete the work and often come with bad work.
2. They try to do the tasks that they are not capable of handling and cause more harm.
3. They tend to be stubborn in wanting to do things their way and may end up with bad work
4. They look for reasons to justify their actions rather than learn how to act differently.

Here are some tips for you to carry out your work:

1. Complete the part of the work that you know, as early as possible
2. Hand over the completed parts, so that your boss can evaluate them; this gives you the chance to discuss the phase with your boss. 3. You will be surprised that your boss can help you find the answers ot he parts that trouble you, or point you to the people who can help you.
4. In some cases, the boss may change the requirements, if they know that the work cannot be done as originally specified.

The approach that I have suggested can be described as "doing a big project in phases, and in an interactive and collaborate way".

In my consulting work, I also have to face clients who are my bosses. I use the above approach. It worked very well for me.

I hope that you find these suggestions to be useful and suitable. 

Winds of change

FAIR panel has struck the right balance

22 January 2013

Editor, Forum Page
Straits Times.

I refer to the letter from Ms Maybel Tang "Look after financial advisers' interest as well, ST ....".

I commend the Financial Advisory Review Panel for striking the right balance between 
the interest of consumers and financial advisers and for setting the right direction for the future.

Ms Tang is worried that the direct channel will take away a large part of the business of financial 
advisers. Past experience has shown that this channel will only attract a segment of the population
who are self educated. The channel will probably offer only the basic insurance products that the financial
advisers are not interested to market, due to the low commission. 

The financial advisers can continue to sell the more complete insurance packages that are 
created to meet the more sophisticated needs of consumers.These packages require the expertise
of the financial advisers to find the right match for the consumer.

Ms Tang is worried that the capping of commission will reduce the supply of new entrants
to market life insurance products. This may be a desirable outcome as more entrants are 
needed for other sectors of the economy. We should not have a lop-sided concentration of
our young people in the financial services and property sectors. 

Consumers are willing to pay an fair fee for financial advice. After all, they now 
pay a fee for medical and legal advice that suit their needs. The financial adviser needs to 
show that their advice is valuable and useful to consumers.

Tan Kin Lian
Financial Services Consumer Association

Wednesday, January 23, 2013

6 month internship

Tan Kin Lian & Associates has a vacancy for an intern to work for 6 months to learn office skills.

Good maternity care in Hong Kong

This letter shows how the system can be good and low cost

Distribute work opportunity fairly

I wish to explain my concept of distribution of work opportunities fairly among the people who are qualified for the work.

Let us look at a particular trade, say primary school teachers. We have to register those who are interested to work in this trade and have been certified to have the required qualifications. Next, we look at the demand for this trade. We adjust the working hours so that the available work is distributed fairly among those that are interested. If the demand is high, everyone works longer (but some may opt to work for less hours). If the demand is low, everyone works less hours (and they can use their spare time for other part time work). The remuneration will be based on hours of work.

This system has the advantage of job security. A person who is trained and certified to be suitable for a particular job will know that work will always be available.

If there is an excess of supply, some workers may opt to be trained for another trade. They can choose a trade in good demand and suits their ability. They do not have to worry about finding employment, after they are qualified.

The system of certification for a trade or profession already exists for doctors, lawyers, airline pilots, engineers, teachers, taxi drivers and others. It can be extended to more trades.

The distribution of the work opportunities can be made through the market, in the form of an online employment exchange.  Workers will register for the trade that they are interested to work in, and provide their certificate for screening. The exchange will be more capable of identifying candidates with fake certificates, compared to individual employers

Employers have to pick the workers from the exchange. They have the assurance that the registered workers have been screened to be suitable. The exchange will also provide a recommended rate of hourly pay for each trade, although both parties are allowed to negotiate the actual rate for each case, but should be above a minimum wage. They should also keep to the maximum hours of work for that trade, to ensure that there is a fair spread of work opportunities. Transparency helps to ensure that the negotiated rate is fair to both parties.

Discrimination by age, gender or culture can be minimized through this exchange. If a person is certified to have the qualifications, there is no need for the individual employer to make an individual judgement of suitability, which is likely to be marked by prejudice.

Young people can plan ahead for the trade that they like to do, and can take into account the demand for that trade. They can study in the polytechnic for the desired trade or profession, knowing that the work opportunity will be available, but the number of hours will depend on demand.

Older workers who are displaced by technological change can also prepare for a new trade or profession in a more productive way, knowing that their training and skills will be put to good use.

There is no need to compete for a job, so that some people get the job and others are unemployed. Sharing of work opportunities create a sense of community, rather than adversity. Fair distribution of work is an important strategy to achieve a better quality of life for all.

Some people will argue that this concept will lead to complacency. This risk can be managed. Even among professionals, there is the risk of unethical practice leading to their removal from the register.

Implementing this concept is not easy. It can be done in stages, starting with the trades and professions that are more suited to this model. Over time, more trades can be brought into the system. As it develops to involve a larger segment of the population, the new practice will become closer to the norm.

Tuesday, January 22, 2013

TKL books

Here are the books written by Tan Kin Lian.

They can be purchased at

Talk on puzzle, thinking and problem solving

I will be organizing this free talk on how to solve puzzles and improve  thinking and problem solving. 90 people have expressed interest to attend this talk. It is suitable for children, adults and seniors. Most of them want to bring their children to attend.

It will be held on Saturday 26 February and 2 March from 9.30 am to 11.30 am at a venue close to a MRT station.

I will be setting up a registration website soon.

How to create good jobs

Some people have asked for my views about the useful economic activities that Singapore can offer to the world to create jobs for our people.

We must not overlook that, in any country, a large number of jobs are created to serve the local population. They include teachers, nurses, doctors, police, public service, financial services, transport, housing, trading and many others. If we can improve the birth rate, there will be increased demand for these services.

Each country still has to offer its services to the world, to earn foreign exchange to pay for its imports. Singapore will remain attractive in providing the following services to foreigners:

- tourism
- medical services
- education services
- financial services
- legal services
- trading services
- manufacturing
- research and development
- a nice place to stay and work in the region

In recent years, the attraction of Singapore in exporting our services has been damaged by the high cost of doing business and, in some cases, by bad business practices. These shortcomings should, and can be addressed. We also have to bring down the cost of living, as it feeds into the high cost of doing business in Singapore.

Our strengths remain a highly educated and hard working population, and a good command of English and Mandarin.

We will be able to provide good jobs for our local population, and for immigrants who wish to make Singapore as their home.  We do not need to create wasteful jobs in the economic activities that are not good for the quality of life. Our people can work less hours and earn enough from productive activities to have a balanced and good standard of life.

Make the right decision for your future

Many young people came to see me after they had bought a life insurance policy with a high premium. They learned, too late, that they are getting a poor return on their savings. They would have got a much better return, if they had invested their savings in other suitable form. It is still time to change their savings plan, but they would have lost a few thousand dollars.

This could have been avoided, if they had spent 3 hours and $30 to attend the FISCA financial planning talk (or join FISCA and pay only $10 as a member).

If you do not wish to be caught in this situation, register now to attend the talk on this Saturday. Pass to word to your friends and family members, so that they will make the right decision about their financial planning.

Monday, January 21, 2013

FISCA Financial Planning Talk - 26 Jan 2013

The FISCA talk on Financial Planning will be held in Singapore Management University on Saturday 2 to 5 pm. This talk advice young people on how to save and invest their savings. If they make the right decision, and avoid the wrong decision, it can give them $200,000 more at retirement. The next talk will be held in 3 months time. Register now, if you are keen to benefit from this talk.

Austrians vote to keep Compulsory Military Service

Like Singapore, Austria is a small country.
They have compulsory military service for their citizens.
They recently carried out a referendum.
The results of the referendum is a strong vote (60%) in favor of keeping the compulsory military service.
This is a good indicator that the Austrians recognize the value of a citizen's army

The finding is relevant to Singapore in more ways that one.
Look at the length of their compulsory military service - six months
Singapore can learn from this referendum.

Review of Government Procurement

I get the impression that our government agencies are paying too much for their procurement. The Brompton bike is only the tip of the iceberg. Anecdotal evidences suggest that the over-payment is rampant and systemic.

I suspect that our government agencies are over-relying on "world class procurement processes" that produce these ridiculous outcomes. It is better for them to rely more on "common sense" coupled with simple process, transparency and accountability.

We have now got the disease of over-paying for government procurement. Our procurement process needs to be reviewed.

Consumer consultancy and Financial Adviser Act

Someone challenged me whether my consumer consultancy infringe the Financial adviser's Act. To overcome this challenge and potential difficulty, I have decided to put in this disclaimer:

* Note: Consumers are advised that the scope of this consumer consultancy is not to be interpreted as financial advice within the scope of the Financial Adviser’s Act regulated by the Monetary Authority of Singapore. Tan Kin Lian & Associates has not applied for a license under the Act.

The full scope is shown here:

Minimum wage in Malaysia

Malaysia is implementing a minimum wage. As expected, employers are making claims of financial difficulties. Here is the view from the other side:

Fair distribution of work opportunities

I will now write about sustainable economic growth, i.e .growth that improves the quality of life for people.

The purpose of economic growth must be to provide sufficient opportunities for every person to have meaningful work and to contribute to the pool of products and services that are needed by other people.

Every one needs to have a meaningful life - to afford a comfortable home, food, education, health care, safety, leisure, raise a family. have friends.

We do not want excessive economic growth that requires people to work long hours at the expense of social and family life, or to over-produce products that consume resources that should be kept for future generations. We must be aware about the harm of over-production.

With science and technology, we are now able to produce the total needs with less hours of work, allowing more time for social and family life.

Instead, we are getting the opposite effect. Many people are working longer hours, not less, to produce things that are not really needed. These include bad economic activities, such as gambling, cheating and bubbles, that add to the GDP at the expense of the well-being of other people.

If the bad activities and over-production are eliminated, how do we spread the available work opportunities to the people who need to work?

We need a new system to distribute work opportunities fairly, based on supply and demand. If there is increased supply for a particular trade, every one should work less, so that the demand is fairly spread among the workers.

This requires a combination of market forces and regulation. Excessive and predatory competition and exploitation of workers should be prevented.

There is an argument that this approach will not work in a global environment. It is not possible to regulate employment practices and supply and demand throughout the world. Every country is competing against the other countries.

This argument is put forward by the multi-national companies that are now enjoying the benefit of globalization ,and are able to avoid paying any tax. This argument should be rejected. The harm from globalization, including the exploitation of workers and the erosion of wages, should be recognized and weighed against the benefits of globalization.

If we reject the notion that globalization is inherently good, and consider its negative aspects as well, we can come to a better balance. There are areas where globalization is beneficial, such as global production of certain products, and can be supported. There are areas where it is bad, such as depressing wages and create big disparity of income, and should be addressed.

One good solution is to return to some form of protectionism. Each country can decide on the type of economic activities that can be protected, and the extent of the protection, that produce a good balance for its people. The aim is to ensure that the people have jobs, are paid fairly and can earn enough to live a meaningful life and to raise a family.

For countries that subscribe to similar philosophies, it is possible to bring down the protectionist measures and to have a common market. We have seen that happen within the states of America and within the countries in Europe. They are the correct development.

SUMMARY. We need a system to ensure that the available work opportunity is distributed fairly among the workers, and that the workers are paid fairly to afford a good standard of life. This can be achieved through a balance between market forces and regulation, within a country that has some control over the negative effects of globalization.

Sunday, January 20, 2013

Sustainable growth

The ruling Government's preferred policy is to focus on growing the economy, so that more jobs can be created for the people. Many pro-PAP thinks that this is the right policy. I wish to point out a flaw in this policy, that is manifested in the approach adopted in Singapore.

We have to differentiate between good growth and bad growth. 

Good growth are economic activities that benefit the people, such as in providing goods and services that improve the quality of life. They include education, health care, housing, recreation and family (i.e. more babies).

Bad growth are economic activities that are counted, but are bad for the people, including the following:

- casinos
- property bubbles
- bad financial products and scams
- cheating, crime
- wasteful and unnecessary activities
- import of low wage foreign workers

Many bad activities generate income for some people, e.g. casinos, financial institutions, property developers and their employees and agents, but are at the expense of the consumers who lose money in the casinos or bad financial products, or have to pay inflated property prices. Some of these activities may be good, e.g. property development (not bubbles), but some are very bad.

If we can get rid of the bad activities and focus the economic growth on the good activities, we have a good foundation to grow the economy. This is called "sustainable development". 

Talk in Hong Kong - financial regulation

I have been invited to be a panel speaker in a high level conference in Hong Kong about financial regulation. I wish to give my views about what needs to be done to regulate financial products and avoid mis-selling. My views are based on my personal experience in assisting consumers that have been misled in Singapore.

New policy strategies

Someone asked for my views on what changes I would do, if I were the Prime Minister. Without the benefit of a $1.5 million salary (hope this is the right figure), I will review the following:

- Reduce the minister salary to an average of $500,000

- Health care: adopt a single payer system of South Korea and Canada, to replace the wasteful and fragmented system now used in Singapore.

- Public housing: Reduce the price to an affordable level, say 3 to 4  years of the average family income

- Public transport: take over the planning and fares, but outsource the operations to private operators for an agreed fee, i.e follow the London model

- Wages: Introduce a minimum wage, likely to be at least $8 an hour.

- Taxation: get rid of the wasteful GST and replace it with a payroll tax (with suitable relieve for low income workers); other aspects of tax will also be reviewed.

-  Waste: Remove wasteful government processes that add to the cost and burden (there are plenty of them)

- Financial Sector: regulate the sector to give a fair deal to consumers for their savings.

- Attitude: create awareness that government leaders and civil servants have to serve the people, and are not the "masters:

I am confident that all of these measures can be done effectively, although they will not be easy. Some mistakes will be made along the way, and will need to be corrected.

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