Author Archive

Posted on August 23, 2010 - by Wilfred Ling

94% “voted” against CPF Life

I read with dismay from Straits Times article “CPF Life: Some want to be given a choice” dated 18 August 2010 that out of 700,000 of CPF members who are eligible for opt-in, only 40,000 took up CPF Life and committed S$2 billion to the scheme. This means that the remaining 94% said “no”. This is shocking to me. I think the government should listen to what the ground is saying and review why the take up rate is so low. Do bear in mind that the CPF Life will eventually be compulsory.

Straits Times Singapore, 18 Aug, 2010, Wednesday
CPF Life: Some want to be given a choice
Not everyone is keen on auto-inclusion, say MPs and financial advisers.
Read more…

Posted on August 3, 2010 - by Wilfred Ling

The lousy NTUC Income Vivolife

Today I decided to do some calculation on Vivolife. Why? Because I’ve been hearing that this is a very lousy whole life that gives poor value for money. But Vivolife is a whole life policy that is never meant for savings and yet people continue to calculate its yield like as if it is a saving plan. Anyway, I decided to calculate the yield if it is treated like a saving plan (when in reality it is NOT).

Parameters: Last age 0, female, limited premium 15 years of $1427 annual premium for sum assured $120,000 with $150,000 as the minimum death benefit for the first 15 years. Read more…

Posted on June 9, 2010 - by Wilfred Ling

Not knowing what you do not know is most dangerous (Type I & Type II ignorance)

There are two types of ignorance. The first type of ignorance is: Knowing what you do not know. For example, I know I do not know anything about sailing. Don’t ask anything about sailing because I know I am completely ignorant about it. I label this as “Type I” ignorance. For Type I ignorance, if someone ask me about sailing, I’ll confess I am ignorant. The other party knows I am ignorant. If one day I need to do sailing, I’ll immediately seek help from someone who knows sailing. There is no pretence of knowing about the subject matter because of being self-aware of ignorance. Read more…

Posted on May 22, 2010 - by Wilfred Ling

Man lost almost his entire property to siblings due to poor financial planning

I want to tell a story of how a person lost his entire HDB flat due to poor financial planning. No, it isn’t another property agent who rented his HDB illegally. The purpose of this blog article is to highlight the importance of financial planning but it is not meant to make fun of any persons. The story goes like this:

1. Mr. Cheong (his real name) bought a HDB flat under joint-tenants with his mother in 1983. Mr. Cheong paid the downpayment, mortgages, conservancy charges, utilities bills and property tax. Read more…

Posted on May 12, 2010 - by Wilfred Ling

There is always a choice

There is no law in Singapore that prohibits financial advisers from recommending other products that are not carried by their own principal. There is also no law prohibiting the financial adviser from charging a fee.

However, many insurers and IFA firms prohibit their own advisers from charging a fee. Why? There are two main reasons.

First reason: If advisers can charge a fee, they would have less motivation to sell products. Do you know that insurance advisers earn commission based on 3 – 6 years on a declining basis but product manufacturers earn perpetual revenues as long as their clients do not terminate the product? Are not these advisers fools to keep on selling when the one who ultimately benefits are the product manufacturers? Read more…

Posted on April 25, 2010 - by Wilfred Ling

Silent Pain From an Insurance Agent

I received the following email from a disillusion insurance agent. What the person described below is very real but it is an unspoken “pain” that all insurance agents go through.

“I am currently a new insurance agent with one of the big companies in Singapore. I am probably getting a bit disillusioned now, what with the huge focus on sales rather than financial planning. Read more…

Posted on April 10, 2010 - by Wilfred Ling

No Product Pushing For Me, even in estate planning

Recently I have been writing and focusing on estate planning. My articles on the subject appeared not just on this website but on CPF Board’s IM$avvy and INVEST magazines. I found this topic to be interesting and the market to be completely untapped. So far, I haven’t come across anyone who has done estate planning in accordance to the professional standards. For those who wanted to do estate planning, they are often confused with all the jargons and the parties involved. Read more…

Posted on April 8, 2010 - by Wilfred Ling

The entrepreneur financial adviser

Many newbie financial adviser joins the industry without really knowing what they are going into. Prior to joining a firm, they are often given many promises but what they do not know is that a financial adviser is an entrepreneur providing professional service.

Why entrepreneur? It is because many financial advisers are self-employed and they are to run their own business like a businessman. They need to watch for business cost such as rental, marketing, advertisements and perhaps evening hiring staff to do the administrative work. Financial advisers “sell” professional service namely in providing financial advice to their clients. Read more…

Posted on April 3, 2010 - by Wilfred Ling

Commoditization Trapped X (April Fool’s joke?) – Fundsupermart to Impose Platform Fees

On 1st April 2010 12:02 AM a seemingly April fool’s joke was mass emailed out from one of the most popular online retail unit trust distributor. But it is already 2 April at this point of writing and it appeared it is no April’s fool joke. It appears to be real. We now witnessed the Commoditization Trap in ACTION.

This unit trust platform provider is imposing a new platform fee ranging from 0.2% pa to 0.5% pa on unit trusts invested through them. This is unheard off in Singapore because normally such additional fees are only imposed by financial advisers – known as “wrap fee” – for the purpose of providing on-going advice (although this is often not the case but that’s another story altogether). The new platform fee is in response to increasing operational cost such as increasing regulatory compliance and decease margins due to decreasing upfront fees. Read more…

Posted on March 31, 2010 - by Wilfred Ling

Husband died one year after twins were born

Like any other ordinary family, Ms Tan Mei Mei, aged 35 and her husband Hwee Chye had a happy family of three children. Two of the children were twins born in 2004. Like any other family like yours and mine, they must have similar aspirations. Tragedy struck in 2005 – her husband died just one year after the twins were born leaving the widow to take care of herself and the three small children. Her story was published by WiCare website at this link HERE. Her article will move you to tears when you read about a widow’s struggle with life from then onwards.

In the article, I noticed many lessons which we can identify and learn from. Here are some things we can learn: Read more…