TheFinance.sg » Adrian Khiat

Blog Temporarily ceased. No new articles allowed

Adrian Khiat — Mon, 30 May 2011 05:30:39 +0000

Dear all,

I’d stopped writing for quite sometime due to some of our new company’s policies. All website or blogs maintained by advisers have to be approved by the company regardless if the FA firm is named or un-named as long as wealth planning issues are discussed. Every future new blog postings must be also approved by the compliance team.

I am also not supposed to receive any leads or enquiries from the blog as it will constitute that this blog is meant to solicit business and cannot be regarded as a personal blog. If I have intention to get any referrals from this blog, then all my previous postings have to be reviewed and future articles have to go through checks to be approved.

i.e, If I am to write a personal blog, this blog must not mention any financial matters that can interest anyone to ask about the topic.
If I am to write a blog with mention of …

Habits of a Successful Adviser (2)

Adrian Khiat — Sun, 17 Apr 2011 15:49:00 +0000

The professionalism have to be in place though the points below are more sales based. The reality in life is that this business is largely on Sales and knowing where to find people who appreciate our expertises.

I leave my fate to the almighty till 30th June but had somehow accepted that I will get a paycut from 1st July if that is his will. I think I can only look forward to my new banding year positively and aims to hit my sales figures next year. I hope any advisers who wants to be a good and honest will be encouraged by what I wrote below and strive to be better in the year ahead…

Habit 1 – Always be positive
* Your client reflect you, if you smile, so will yr client
* Magnify the good, justify and combat the bad
* use client relationship management programs
* Focus on the good things, everyday is a good day, …

Habits of a Successful Advisor (1)

Adrian Khiat — Fri, 15 Apr 2011 05:21:27 +0000

I have been going through a rough and frustrating patch since end of 2010. The long hours I spent with my work had taken a toll on my health, family and relationships. I couldn’t explain to my family on why I spend so many hours outside and yet not bringing home the desired income. I know that with way I conduct my business and how I position myself, I will still be the same or probably worse years down the road.

A lot of advices have been poured over me but find it hard to implement. They suggested me to either leave the industry, reduce my time in analysing for my clients or change the plans I recommend to them. I find it hard to leave the industry because I felt obliged to all who had trusted me over the years, they are like my children and I want to walk with them. I find it hard to reduce my time analysing because …

An insurance portfolio that makes my blood boil.

Adrian Khiat — Sun, 03 Apr 2011 18:10:18 +0000

I was at one point wondering if Financial Advisers in Singapore are helping people or they are helping themselves by exploiting the people. I have been compiling portfolios over the years and I seldom come across a portfolio which in my opinion, proper… I’ll like to show one classic example on the type of portfolio that I frequently compiled. I’m sure that this supposedly IFA is making a very good income by such planning for his clients…

(Ps: I’m not saying that all Financial Advisers are bad. I am far from perfect either. However I have an interesting observation which is “Many(not all) of the Star Performers sell plans like those below” and they are termed “Successful” by the company, industry and public) Those who spend time analysing and thinking what best for clients cannot even hit sales quota for promotion or even earn a simple “Senior” title to his namecard, regardless of how much experiences …

Difference between Financial Sales & Financial Planning

Woman and Financial Planning

Adrian Khiat — Tue, 08 Mar 2011 16:27:42 +0000

It is the 100^th anniversary of the International Women’s Day today and I like to write a bit more about woman on this special Day.

I always feel that woman is a very special creature. My observation is that they are a very hardworking, determined and meticulous when we compare them to man. I also admire their spirit in going through the ordeal of child bearing and motherhood. In today’s society, they also carry the burden of bringing additional income for the betterment of the family.

In term of Financial Planning, woman tends to have some disadvantages compared to the men. I will like to share some of my observations with you.

Longer Life Expectancy and keep rising
Based on statistics, Singapore men are expected to call to the Lord at the age of 77 whereas women at 82. The life expectancy age is expected to increase further and …

Wisdom on How to Live Life

Adrian Khiat — Mon, 28 Feb 2011 06:30:35 +0000

For those who knows me will know that I’m not someone who are keen in reading except financial reports and occasionally motivational books. One series of books that actually caught my attention sometime early last year was by Dr Tommy Wong S.W. The name of the 3 books are “Wisdom on How to Live Life”… I just like to share a few note about these book and perhaps it might interest you.

Dr Wong uses conversations between Tom and 2 Gurus named Dick and Harry to convene his message in all his 3 books. Tom is a young man seeking to understand how the world works and ways to be happy. Guru Dick is a very successful man in term of power and money. Guru Harry is a very spiritual man who view success in other angles and explain why so many people remains unhappy.

Guru Dick first opened up our eye in realising the type of money and power …

Enquiry on Term or WL plan

Adrian Khiat — Mon, 21 Feb 2011 05:29:04 +0000

From Mr T, whom I will be meeting to understand his financial needs and direction soon…

++ QTE ++
Hi akhiat

I’m XXX, i read your blog online.
I would like to seek advice from you, currently i’m having a whole life insurance policy under TM asia legacy plus 20yr plan – cover S$100k plus S$100k dread disease rider, annual payment of $2294.

I took up this policy under my friend agent, i read your articles and find out that term policy are more affordable than whole life. for my case this coming jun 2011, my whole life policy under TM asia will make deduction from my giro account. i opt for annual payment thus save abit of money compare to monthly payment.

My issue is that, after reading articles comparing term and whole life policy, i am not sure should i hold on to TM asia policy or sign-up for a term policy …

Distribution of CPF monies on death

Adrian Khiat — Wed, 09 Feb 2011 02:29:10 +0000

As I was helping with my client’s death claim recently, I got to recap on some of the issues arising from CPF monies on death. I was surprised that many people had so many different versions on how CPF monies are distributed upon death. The common misconceptions are: CPF monies will only transfer to beneficiaries CPF accounts, Medisave monies cannot be withdrawn, CPF monies goes back to government, CPF monies are equally shared between Parents and Spouse regardless with Children or not…

If valid CPF Nomination was made prior death
* CPF Board will invite the beneficiaries to come forward to file a Claim. Monies need not go to Public Trustee…
The following will be distributed to your nominees in the proportion as stated in your nomination upon your death:
(a) Savings in the Ordinary, Special, Medisave and Retirement Accounts;
(b) Discounted SingTel (ST) shares.

The following are not covered by CPF Nomination and will …

Too Little, Too Late…

Adrian Khiat — Thu, 27 Jan 2011 17:19:27 +0000

On 23rd January 1:02am, I received an sms from one of my policyholder’s brother-in-law. He informed me that MG had passed away in Tan Tock Seng Hospital due to a sudden cardiac arrest. MG was 33 years old, perfectly healthy and fit, active in Lion Dance. He left behind his elderly mother, 3 years old son and his wife. MG was referred to me in 2006 through his brother-in-law, who also happens to be my policyholder. Back then, MG was a storeman, working in a logistic firm, earning around $1,300/mth.

He was interested to get a medical insurance for himself. After 2 meetings in 2006, he purchased an incomeshield plan Basic. Half a year later, he told me that he wish to start some savings with a budget of $50+. I told him that he might as well get a basic Life coverage with Critical Illnesses first than to save a mere $50 …

Papaya measures to curb property prices

Adrian Khiat — Fri, 14 Jan 2011 05:39:31 +0000

This is a good piece of news to me as a concerned Singaporeans and probably to many of our fellow friends who are looking towards buying their first property and yet being deprived by the speculators. The measures taken in September last year are too soft which in my opinion are not effective. The measures taken back then only reduce the crazy mode to a less crazy mode.

Previously it rose at a rate of 30% a year and it reduces to around 20% a year. Back then, the private housing market had resisted rounds of cooling measures and surged 38.2% in June last year, exceeding the historical peak of 1996. Property, in my view is best to grow at a moderate rate near to the overall inflation of the country. So what are the changes?

1) The holding period for imposition of Seller’s Stamp Duty (SSD) will be raised to four years from the current three. …

Will the government introduce more cooling measures?

3 minutes investment updates – 01/2011

Adrian Khiat — Mon, 03 Jan 2011 08:58:04 +0000

First of all, I’ll like to wish all of you a very happy new year. May 2011 be a blessed and fruitful year for all of you.

In my first day at work back in office, I’ll like to give you some updates on the indices movement for this year and my personal views for 2011. Pls note that whatever I wrote will be my personal opinion and not from any firm that I may represent. Pls regard me just as a member of public, innocently giving opinion..

First Minute – Let me summarise on the indices that I monitor on regular basis.

1) December is generally a positive month for most economies with Russia and Korea rising strongly and closed the year with a 20.8% and 22.5% increment respectively. They are the best performers among the indices I monitor.
2) Emerging Markets and Asia Ex-Japan did relatively well especially …

CPF Life, MSS or Annuity?

Adrian Khiat — Tue, 21 Dec 2010 17:47:39 +0000

I was approached by one of my client to do some calculation on the difference between CPF Life, MSS and Annuity. She is currently 57 yrs old and wants me to use $100,000 as a basis for comparison.

Assumptions
1) Mrs X – Female (16th Aug 1953)
2) Has exactly $100,000 when she was 55 yrs old in her Retirement Account
3) With interest of 4%p.a, she probably have around $108,160 in her Retirement Account now
4) Property Annual Value – $6k to $11k / Annual Income – $24k to $54k (for calculation of bonuses given for taking up CPF Life before end Dec 10)
5) Assuming house are not used as pledge at 55 yrs old
6) Will withdraw the money at age 64 (DDA – Draw Down Age)

How much will she get per month?
==> Under her current MSS, she will $858 at age 64 for about 20 years

==> …

The problem about regular investments (RSP)

Adrian Khiat — Mon, 13 Dec 2010 07:48:03 +0000

I received an email from one of my policyholder recently asking if he should stop and sell his RSP investments as his current investment is giving him over 10% of profits at the moment. Such is a common request even in good and bad times. He is not wrong to stop and redeem all his investments when he is already on 10% profits, especially if he has the need to use the funds now. However, I don’t remember that he have any specific short term need of the fund and hence I had advised against the termination and the should probably review on the purpose of this regular investments.

An RSP stands for “Regular Savings Plan”. It is a way of investing whereby we put in a fixed amount of money on a monthly, quarterly or any fixed regular period. For example, putting in $500/mth into a Asia Ex-Japan fund every month. Such investment technique is to …

Covering our needs with Term Insurance

Adrian Khiat — Tue, 07 Dec 2010 02:56:38 +0000

During the NTUC Income 40^th Year anniversary dinner held in October this year, Senior Minister Mr Goh Chok Tong encouraged the insurance industry to place more emphasis on term insurance plans while he addressed the protection needs of Singaporeans. His words came timely because according to a research conducted by Nanyang Technological University in 2009, Singaporeans has an average cover of only $165,628 upon death, after taking account of mortgage insurance payout and CPF savings when their average needs should be $494,851. It was revealed in separate surveys that Singaporeans have the perception that getting insurance protection is costly and beyond their affordability.

If cost is really a concern, then term insurance can be a good way to address this problem. Through term insurance, we can get our immediate needs covered at affordable premium which means freeing up more financial resources towards other needs such as saving for retirement …

The “WANTS” of Investing

Adrian Khiat — Thu, 11 Nov 2010 01:00:09 +0000

Photo by darkpatator

Prior constructing an investment portfolio for my clients, I will normally access the “WANTS” for them. This “WANTS”, not only implies what they wants in their life, it is actually my Acronym for their
“Willingnesss”,
“Ability”,
“Needs”,
“Time Horizon” and
“Suitability”

Only after determining the WANTS, will I be able to ensure what I recommend will be suitable for them in their long term financial interest.

Willingness…
I often hear how my clients lament on how they lost in their previous investments and swear to themselves that they will never invest again. It is also not uncommon to see people putting all their money in banks and cite the need for emergency use. Everyone have different experiences and upbringing with regards to investments and hence we cannot put all in one single category in term of Willingness to take risk.
“Willingness” is more of a psychological part of investing. Some people need to be counselled on why they have to be more willing to take sime risk. They either have to see the needs or they have to understand why investing is not that risky all the time. Contrary, some people are too willing to take risk when they don’t have the ability or the need. Read more…

3 minutes investment update – 10/2010

Adrian Khiat — Tue, 26 Oct 2010 09:59:10 +0000

First Minute – Lets look at the indices
1. Emerging Markets and Asia-ex-Japan index rose about 11% for the month alone. The Kopsi did well with 11.3% rise.
2. Year to date, Asia-ex-Japan and Emerging markets did well with an increase of 11.3% and 9.8% respectively.
3.Gold is the best performer of the year so far having appreciate 19.2% to a high of 1,309 at end of September. It reached US$1,364/oz on 8th Oct, which translate to an increase of nearly 25% Year to Date. It is also the more consistent and less volatile than equities in performing such a feat.
4. China, surprising did relatively badly for 2010, having rose a mere 1% for the HS Mainland 100 Index compared to its fellow emerging markets.
5. Developed economies like USA and Europe rose 1.4% and 2.8% YTD so far and Japan dropped a whopping 11.2%.
6. Oil prices remain stable, Baltic Dry fluctuates within a fair range, VIX indexs looks stable, US Consumers are not getting much confidence with their starting their purchasing plans as yet… Read more…

Good news? Bull?

The misunderstood profession

Adrian Khiat — Sat, 18 Sep 2010 01:00:31 +0000

Photo by kwerfeldein

Mr X is a property agent. He acts as the middleman between a buyer and seller of a property by negotiating the price between the two interested parties and transacts the deal. He can get as much as 2% of the total purchase price of the house which means that for a $800,000 property, he can get as much as $16,000. Subtracting the cost of business, he probably makes $12,000. When all the paperwork is done and owner moved in, that’s probably the end of the story. If there is something wrong with the house after some time, the owner will look for their own repairman or solve their own problems. The Property Agent is usually out of the picture…

Mr Y is a Vacuum Cleaner seller. He tries to generate interest of the consumers by telling him how good the vacuum cleaner is. He will spend time demonstrating to the consumers on the functions of the vacuum cleaner and using sales pitch to make a living. He can earns probably about 25% from each sale after factoring cost. Assuming each vacuum cleaner cost $1,000 and he sell 10 each month, he will make $2,500. If he is a wholesaler, he can sell 10 vacuum cleaners to 10 retailers and in returns gets $25,000. If there is something wrong with the vacuum cleaner after some time, the owner will take the warranty and look for the manufacturer directly. The vacuum cleaner seller or wholesaler is usually out of the picture as well…

Mr Z is a financial adviser. He tries to tell people how important it is to save and to protect their wealth. He, like Mr X and Mr Y, has to spend money and time to prospect for a client. He also must possess certain sales capabilities in convincing the client the need to act on various financial solutions. It seems like Mr Z is not much different from X and Y but Mr Z is holding on to a very challenging job out of the three. Why? Read more…

Power of a Roadshow Agent

Adrian Khiat — Wed, 08 Sep 2010 10:00:44 +0000

Photo by Anonymous9000

I have a colleague, Mr Senior Seow, 20 over years in the financial advisory industry. He has 2 sons and the younger one (Junior Seow) had finally graduated from NTU and found a job in the oil & gas industry. He has not received his first salary yet.

One evening, the Seow family had dinner at Bishan Junction 8. Senior Seow left earlier as he have to meet some clients. Junior Seow then went shopping alone after dinner and passed by an insurer ”P” roadshow booth. He was probably attracted by the pretty girls and colourful booth and eventually sat down to hear about their savings plan.

Junior Seow’s older brother knew that he was at the roadshow booth and alerted Senior Seow. Senior Seow then tried to contact Junior Seow but he did not pick up the call. He then sms Junior Seow not to commit anything on the spot and bring whatever he need back for discussion first. Read more…