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Old 07-11-2016, 04:34 PM   #1501
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To be fair to the advisory agents, they earn their keep, and they work hard

We should not begrudge them for what they can potentially earn.

How and what they spend on, is really up to them.

Like I say, money must go someone's pocket.

Dun like chicken rice outside, cook yourself?

End of the day, the take up for DIY insurance is not really that high.

The Uncles and Aunties still need servicing

I have a feeling the young ones, the money the earn is spent....they are not buying insurance and neither are they investing..

That is my worry for them
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Old 07-11-2016, 04:42 PM   #1502
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However, the resignation of about 200 out of the more than 400 agents from Peter Tan Organisation (PTO), one of Prudential's largest group of agency units, has put a significant number of agents out on the job market - opening the way for smaller insurers and FA firms to enter the bidding fray for talent as well.

- See more at: http://business.asiaone.com/news/tus....qPW50h2H.dpuf

1) Is this action considered a good relationship? Is 200 considered very few?

2) Please sic which plans return guaranteed 6-8% or 4% currently.

1) I believe for this case there was a contractual disagreement. There are always inherent business risks and conflicts of interest with the commission model.

If we are all willing to pay by the hour for financial advice, then this kind of scenario would be less likely to occur. It would also reduce the large number of advisors in the market. (Singapore is one the densest with 250:1 vs 1000:1 for USA).

Unfortunately as a 2014 MAS study revealed, Singaporeans are not receptive to a fee-based advisory model. So these kind of risks are expected. In the end it all boils down to the individual advisor.

2) No one mentioned anything about guaranteed returns. It was an example of the internal rate of returns that can be generated with a proper asset allocation strategy.

I was merely addressing the mindset prevalent in this forum of minimizing costs. That is just one strategy, albeit a good one for the mass affluent market.

You dont see the high net-worth people asking for fee rebates when investing through their advisors. They pay for performance and that is that.


Personally I also feel that there are too many agents in Singapore calling themselves financial advisors when they themselves are not even savvy enough. So I understand where you are coming from. But there are good ones out there that deserve their paycheck for the work they do.
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Old 07-11-2016, 04:48 PM   #1503
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1) I believe for this case there was a contractual disagreement. There are always inherent business risks and conflicts of interest with the commission model.

If we are all willing to pay by the hour for financial advice, then this kind of scenario would be less likely to occur. It would also reduce the large number of advisors in the market. (Singapore is one the densest with 250:1 vs 1000:1 for USA).

Unfortunately as a 2014 MAS study revealed, Singaporeans are not receptive to a fee-based advisory model. So these kind of risks are expected. In the end it all boils down to the individual advisor.

2) No one mentioned anything about guaranteed returns. It was an example of the internal rate of returns that can be generated with a proper asset allocation strategy.

I was merely addressing the mindset prevalent in this forum of minimizing costs. That is just one strategy, albeit a good one for the mass affluent market.

You dont see the high net-worth people asking for fee rebates when investing through their advisors. They pay for performance and that is that.


Personally I also feel that there are too many agents in Singapore calling themselves financial advisors when they themselves are not even savvy enough. So I understand where you are coming from. But there are good ones out there that deserve their paycheck for the work they do.
1) http://dollarsandsense.sg/wp-content...-practices.pdf

SINGAPORE'S commission-based system for insurance agents has often been cited as the main cause of unethical selling of insurance products. The criticism goes that agents push particular products to land higher commissions for themselves, rather than recommend those suitable for the consumer.

2) http://forums.hardwarezone.com.sg/ea...t-5464743.html
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Old 07-11-2016, 04:53 PM   #1504
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1) http://dollarsandsense.sg/wp-content...-practices.pdf

SINGAPORE'S commission-based system for insurance agents has often been cited as the main cause of unethical selling of insurance products. The criticism goes that agents push particular products to land higher commissions for themselves, rather than recommend those suitable for the consumer.

2) http://forums.hardwarezone.com.sg/ea...t-5464743.html
While there are many things I understand from where you are coming from and for some point, I actually agree it makes sense, that thread is if not the worst insurance thread ever because apple is just instigating people to cancel policies without even understanding the need for it.

Not sure how from your posts here in this section you can support him/her stand in this.
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Old 07-11-2016, 05:02 PM   #1505
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While there are many things I understand from where you are coming from and for some point, I actually agree it makes sense, that thread is if not the worst insurance thread ever because apple is just instigating people to cancel policies without even understanding the need for it.

Not sure how from your posts here in this section you can support him/her stand in this.
That thread is to show that many pple are misled by agents to buy useless policies and losing their hard earned money while their agents get fat comms. I can show you various blogs too:

1) http://sgbudgetbabe.blogspot.sg/2016...nvestment.html

2) http://jkfund.blogspot.sg/2015/06/my...urney.html?m=1

3) http://www.turtleinvestor.net/surren...e-life-policy/

4) http://lazyreitinvestor.blogspot.sg/...xa-pulsar.html
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Old 07-11-2016, 05:29 PM   #1506
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Personally I also feel that there are too many agents in Singapore calling themselves financial advisors when they themselves are not even savvy enough. So I understand where you are coming from. But there are good ones out there that deserve their paycheck for the work they do.
I concur with this statement. Can you imagine someone completing the insurance course and beginning to sell investment product without any prior investment knowledge? Nowadays there are many "financial advisors" on the street but most of them don't even have good knowledge on the product they are selling. They have good knowledge on the commission they are collecting. I believe there are genuine good advisors out there, but not easy to find.
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Old 07-11-2016, 05:52 PM   #1507
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That other thread is so toxic that it almost gave me cancer

We all know BTIR is the most cost efficient way, but it is simply irresponsible to ask everyone to cancel their plans. Just to give a summary of the key points I would consider:

1. Break-even. Insurance is not free. A fair comparison would require subtracting the cost of the term plan (vs ILP for example).

2. Trading costs. Since the popular strategy here is to DCA and buy STI ETF, with a small budget of $200 monthly, the min. trading fee is stanchart at $10 which equals 5% fees. Of course you can pay $1000 every month or every 3-4 months then it will become 1%. Don't forget the 0.5% ETF fee as well.

3. Discipline. This method means, whether markets up or down, u gotta continue doing the same thing. Recession coming again, 2008 market crash happen again, still gotta buy the STI ETF by yourself. No excuses.

So, end of the day, assuming (1) and (2) are calculated properly, THEN we have grounds for comparison. Yes, BTIR will show a better number. So, the deciding factor is (3).

If have no discipline or expertise, gotta pay the difference for (3). If have discipline or expertise, then by all means DIY.

For the record, what does expertise mean? 2 main things.
A) Valuation - DCF, Comps, LBO, Options pricing
B) Research - Macro and micro economics, govt. policies, news etc.

Even with expertise, a retail investor is just small fish in ocean vs big banks and institutions like JP Morgan, Goldman Sachs which can manipulate markets in short run.

Pls ah, those "investors" who just depend on random hot stock tips (like some in this forum), or go for some guru investing or trading seminar, they are better off sticking with ILP assuming they find a good advisor.

This is why internal rate of return is the key metric to determine whether to engage an advisor. And not his fees.
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Last edited by eternalxiii; 07-11-2016 at 05:58 PM..
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Old 07-11-2016, 05:57 PM   #1508
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That other thread is so toxic that it almost gave me cancer

We all know BTIR is the most cost efficient way, but it is simply irresponsible to ask everyone to cancel their plans. Just to give a summary of the key points I would consider:

1. Break-even. Insurance is not free. A fair comparison would require subtracting the cost of the term plan (vs ILP for example).

2. Trading costs. Since the popular strategy here is to DCA and buy STI ETF, with a small budget of $200 monthly, the min. trading fee is stanchart at $10 which equals 5% fees. Of course you can pay $1000 every month or every 3-4 months then it will become 1%. Don't forget the 0.5% ETF fee as well.

3. Discipline. This method means, whether markets up or down, u gotta continue doing the same thing. Recession coming again, 2008 market crash happen again, still gotta buy the STI ETF by yourself. No excuses.

So, end of the day, assuming (1) and (2) are calculated properly, THEN we have grounds for comparison. Yes, BTIR will show a better number. So, the deciding factor is (3).

If have no discipline or expertise, gotta pay the difference for (3). If have discipline or expertise, then by all means DIY.

For the record, what does expertise mean? 2 main things.
A) Valuation - DCF, Comps, LBO, Options pricing
B) Research - Macro and micro economics, govt. policies, news etc.

Even with expertise, a retail investor is just small fish in ocean vs big banks and institutions like JP Morgan, Goldman Sachs which can manipulate markets in short run.

Pls ah, those "investors" who just depend on random hot stock tips (like some in this forum), or go for some guru investing or trading seminar, they are better off sticking with ILP assuming they find a good advisor.
So many pple losing money in their ILP yet you recommend ILP...

Chiu is agent?
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Old 07-11-2016, 06:04 PM   #1509
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That other thread is so toxic that it almost gave me cancer

We all know BTIR is the most cost efficient way, but it is simply irresponsible to ask everyone to cancel their plans. Just to give a summary of the key points I would consider:

1. Break-even. Insurance is not free. A fair comparison would require subtracting the cost of the term plan (vs ILP for example).

2. Trading costs. Since the popular strategy here is to DCA and buy STI ETF, with a small budget of $200 monthly, the min. trading fee is stanchart at $10 which equals 5% fees. Of course you can pay $1000 every month or every 3-4 months then it will become 1%. Don't forget the 0.5% ETF fee as well.

3. Discipline. This method means, whether markets up or down, u gotta continue doing the same thing. Recession coming again, 2008 market crash happen again, still gotta buy the STI ETF by yourself. No excuses.

So, end of the day, assuming (1) and (2) are calculated properly, THEN we have grounds for comparison. Yes, BTIR will show a better number. So, the deciding factor is (3).

If have no discipline or expertise, gotta pay the difference for (3). If have discipline or expertise, then by all means DIY.

For the record, what does expertise mean? 2 main things.
A) Valuation - DCF, Comps, LBO, Options pricing
B) Research - Macro and micro economics, govt. policies, news etc.

Even with expertise, a retail investor is just small fish in ocean vs big banks and institutions like JP Morgan, Goldman Sachs which can manipulate markets in short run.

Pls ah, those "investors" who just depend on random hot stock tips (like some in this forum), or go for some guru investing or trading seminar, they are better off sticking with ILP assuming they find a good advisor.

This is why internal rate of return is the key metric to determine whether to engage an advisor. And not his fees.
Sorry, I am the outlier, I do my own homework and analyzed stocks one

So far this year has been the most profitable year since I started investing 10 years ago, whereas my ILP which I started 5 years back is down 50%.

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Old 07-11-2016, 06:17 PM   #1510
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Some agents are actually uni students who are studying and whish to earn fast cash. They wont be bothered about their clients or their products. Strawberry agents especially sell with their easy-goging personality and pleasent faces.

Passing the insurance course isn't as tough as you may think, and the course only covers really basic (and unecessary stuff considered by most ppl) stuff which does not go indept abt financial planning or products. In the agency, agents are only trained to sell instead of being trained to provide proper advice.

You can call the successful agents very good salesmen but not very good advisors. That's the definition.
The reality is pleasant looking agent is already one step ahead of the others. Will you approach a sweet young thing or will you approach an auntie? This question should not be difficult to answer. It has happened in the past, it will happens in the future. Human nature doesn't change isn't it?

Passing should be easy which is why you see alot of young faces. I heard from insurance friend that the exam is all multiple choices. It puzzles me why exam does not have scenario based questions. Every client is unique and insurance agent should be tested on different situations not just MCQs. Exam for real estate agent does have scenario based questions and not easy to pass. Failure rate is quite high.

And yes I agree there are agents who have very good salestalk. A below par product can also become an above par product.
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Old 07-11-2016, 06:21 PM   #1511
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Sorry, I am the outlier, I do my own homework and analyzed stocks one

So far this year has been the most profitable year since I started investing 10 years ago, whereas my ILP which I started 5 years back is down 50%.
Good job and all the best for the years ahead

Most definitely ILP will be down in first 5 years. Even a well-managed one will take 10 years to break-even. You are paying one year of premium in fees and also paying for insurance. Why did you buy ILP when you had 5 years investing experience? Term is more cost-efficient.

So many pple losing money in their ILP yet you recommend ILP...

Chiu is agent?
I did not make any recommendation.

If that chunk of analysis was too dense for you, then maybe I summarize it even further for you.

"ILP may be viable for certain types of people if managed by a competent advisor who is able to generate a reasonable internal rate of return in the long run."

I am entitled to my own opinion, as are you and others.

Last edited by eternalxiii; 07-11-2016 at 06:26 PM..
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Old 07-11-2016, 06:28 PM   #1512
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Good job and all the best for the years ahead

Most definitely ILP will be down in first 5 years. Even a well-managed one will take 10 years to break-even. You are paying one year of premium in fees and also paying for insurance. Why did you buy ILP when you had 5 years investing experience? Term is more cost-efficient.



I did not make any recommendation.

If that chunk of analysis was too dense for you, then maybe I summarize it even further for you.

"ILP may be viable for certain types of people if managed by a competent advisor who is able to generate a reasonable internal rate of return in the long run."

I am entitled to my own opinion, as are you and others.
Pls sic which ilp plans, which advisor and what rate of returns are reasonable

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Old 07-11-2016, 06:41 PM   #1513
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Most definitely ILP will be down in first 5 years. Even a well-managed one will take 10 years to break-even. You are paying one year of premium in fees and also paying for insurance. Why did you buy ILP when you had 5 years investing experience? Term is more cost-efficient.
This is not true. My 10 years ILP is still underwater. Sunk cost $25k, SV $11k. Not even reach the break-even cost. Why did I buy? Can only blame myself for not being savvy and buy on recommendation by relative. I believe most of us would have buy similar product during our young days. Humans are weird. Humans care alot about money but humans are willing to let "financial advisors" especially those young faces on the street decide about their money. It's quite ironic but it is the truth from what I see.

How do we define well-managed? It is really subjective. The financial advisor manage for you? Or we manage ourself? I believe most financial advisors who sold the ILP product does not even know how to manage the policy themselves. After receiving commission from the first few years, do you seriously think they will care about the client? Don't get me wrong, I am not against any financial advisor selling ILP product, I am just sharing my opinion here. And I really feel ILP is a poor investment product.
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Old 07-11-2016, 06:42 PM   #1514
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The reality is pleasant looking agent is already one step ahead of the others. Will you approach a sweet young thing or will you approach an auntie? This question should not be difficult to answer. It has happened in the past, it will happens in the future. Human nature doesn't change isn't it?

Passing should be easy which is why you see alot of young faces. I heard from insurance friend that the exam is all multiple choices. It puzzles me why exam does not have scenario based questions. Every client is unique and insurance agent should be tested on different situations not just MCQs. Exam for real estate agent does have scenario based questions and not easy to pass. Failure rate is quite high.

And yes I agree there are agents who have very good salestalk. A below par product can also become an above par product.
The turnover rate in the insurance industry is too high. 80% of agents don't last more than 2 years. Therefore the agencies or companies can only sponsor the most basic exams.

There are higher qualifications which cost a few thousand to obtain, such as Chartered Financial Consultant and Certified Financial Planner. So if you want to have more confidence, find an advisor with these qualifications because it means they have put in time, money, and effort in their careers.

http://fpas.org.sg/

Pls sic which ilp plans, which advisor and what rate of returns are reasonable

Are u willing to pay $200/hr for consultation regardless of whether you buy anything? Depending on your needs, it may be term and not ILP as well. 6% IRR over 20-30 years is a reasonable benchmark.

Last edited by eternalxiii; 07-11-2016 at 06:47 PM..
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Old 07-11-2016, 07:05 PM   #1515
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This is not true. My 10 years ILP is still underwater. Sunk cost $25k, SV $11k. Not even reach the break-even cost. Why did I buy? Can only blame myself for not being savvy and buy on recommendation by relative. I believe most of us would have buy similar product during our young days. Humans are weird. Humans care alot about money but humans are willing to let "financial advisors" especially those young faces on the street decide about their money. It's quite ironic but it is the truth from what I see.

How do we define well-managed? It is really subjective. The financial advisor manage for you? Or we manage ourself? I believe most financial advisors who sold the ILP product does not even know how to manage the policy themselves. After receiving commission from the first few years, do you seriously think they will care about the client? Don't get me wrong, I am not against any financial advisor selling ILP product, I am just sharing my opinion here. And I really feel ILP is a poor investment product.
How much is the coverage? Factor in the cost of insurance for 10 years and it may not look that bad. Also go and look at the underlying funds performance (10-year chart), and prospectus. Some of these funds have 2-3 layers of fees. Best to switch funds if its performing poorly for a long time, or have above 1.5% management fees.

You should discuss with your advisor if you are not happy with the results. If u feel that you can invest by yourself then by all means cut losses and buy term. Or, you can treat it as a whole-life plan. Max out the coverage with your existing premium and fund switch to a higher % of fixed income.

Let me share with you an insider's perspective... the true reason why the smart advisor will want to sell ILPs is because they can get clients to put in more money. So they actually have incentives to manage the investment portion well. Then the clients will put in more money and they get more commission. If your advisor did not contact you, it means you are either too small a client, or his performance is poor lol.

Compared to whole life plans. They are fixed. You need to find more and more clients instead of building a long-term relationship with a smaller but better pool. Believe me, advisors who sell term plans will also push to recommend unit trusts and other types of investment vehicles as well. Investment management is one of the few areas a good advisor can differentiate himself.

Last edited by eternalxiii; 07-11-2016 at 07:15 PM..
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