Hi Mr. Tan
I was involved in a car accident, where a Volvo slammed into the back of my vehicle.
I brought my vehicle to IDAC. After inspecition, I brought my vehicle to an NTUC authorized workshop in UBI.
I have just got my vehicle back. I would like to know:
1) Is it the usual procedure for the workshop to claim my medical expenses? The workshop I went to simply asked me to hand over all my medical bills and they will assist to "claim on my behalf".
Reply: A good insurance company will assist you to make this claim. But they prefer to have the easy way out. So, you have to depend on the workshop to do it for you.
2) Would I be able to know how much the insurer of the Volvo is liable to pay to the workshop I went to? I have heard stories from my friends that very often, the workshop will get to claim a much larger amount from the insurer and they would only pass a fraction of that money to me.
Reply: You are entitled to have your car repaired to its condition before the accident. How much the insurer pays to the workshop is a separate matter.
3) Am I also able to claim for lost allowance / hardship for the injuries caused to me? (I suffered a badly bruised right eye) What would be the procedure to do this? Can I just leave it to the workshop to claim this for me
Reply: You can make this claim by writing direct to the insurance company. But they tend to give a low amount to the claimant. So, many claimants prefer to engage a lawyer to make the claim. Try the lawyer.
4) I am upset over the transparency of the entire motor insurance claims procedure. In your expertise is there a better way to do this?
Reply: It is the duty of a good insurance company to make it easy for you to claim for your losses. You should insist on a high standard of service and assistance from the insurance company.
If they fail to do so, you should lodge a complaint. Read my blog about "Consumer complaint to MAS".
Sunday, September 21, 2008
OCBC Preference Shares
MR TAN
I believe you have saved many people, especially those who read your blog. You always educate us not to buy complicated structure products (Mini bonds, Pinnacle notes etc)
I am fortunate that I take your advice to invest only in low cost fund(NTUC INCOME Growth Fund), STI ETF Fund & many endowment policies from NTUC Income.(I bought it 15to 20 years ago)
I have about 100K from my matured policy from NTUC Income, I do not know what to invest, so I have bought 50k of OCBC Preference shares recently(It give 5.1% dividend). Now the market is so bad, I am worried about my Preference shares will become Mini Bonds.
Please advice me whether preference shares is safe to invest & also tell us more about preference shares.
REPLY
In my view, the OCBC Preference Shares are quite safe. I will be buying some of these shares for my investments. They will not be like MiniBonds - as they are entirely different types of investments.
I believe you have saved many people, especially those who read your blog. You always educate us not to buy complicated structure products (Mini bonds, Pinnacle notes etc)
I am fortunate that I take your advice to invest only in low cost fund(NTUC INCOME Growth Fund), STI ETF Fund & many endowment policies from NTUC Income.(I bought it 15to 20 years ago)
I have about 100K from my matured policy from NTUC Income, I do not know what to invest, so I have bought 50k of OCBC Preference shares recently(It give 5.1% dividend). Now the market is so bad, I am worried about my Preference shares will become Mini Bonds.
Please advice me whether preference shares is safe to invest & also tell us more about preference shares.
REPLY
In my view, the OCBC Preference Shares are quite safe. I will be buying some of these shares for my investments. They will not be like MiniBonds - as they are entirely different types of investments.
Financial Adviser Act, Section 27
I researched the Financial Adviser Act and found section 27. It describes the responsibility of the financial adviser or its representative in giving proper advice to the consumer. The adviser is required by section 2 (a) to ensure that the recommendation (i.e. to invest in the credit linked securities) is appropriate to the consumer. I believe that the adviser has failed in this duty.
Recommendations by licensees
27. —
(1) No licensee shall make a recommendation with respect to any investment product to a person who may reasonably be expected to rely on the recommendation if the licensee does not have a reasonable basis for making the recommendation to the person.
(2) For the purposes of subsection (1), a licensee does not have a reasonable basis for making a recommendation to a person unless —
(a) he has, for the purposes of ascertaining that the recommendation is appropriate, having regard to the information possessed by him concerning the investment objectives, financial situation and particular needs of the person, given such consideration to, and conducted such investigation of, the subject-matter of the recommendation as is reasonable in all the circumstances; and
(b) the recommendation is based on the consideration and investigation referred to in paragraph
(a).
(3) Where —
(a) a licensee, in making a recommendation to a person, contravenes subsection (1);
(b) the person, in reliance on the recommendation, does a particular act, or refrains from doing a particular act;
(c) it is reasonable, having regard to the recommendation and all other relevant circumstances, for the person to do that act, or to refrain from doing that act, as the case may be, in reliance on the recommendation; and
(d) the person suffers loss or damage as a result of doing that act, or refraining from doing that act, as the case may be,
then, without prejudice to any other remedy available to that person, the licensee is liable to pay damages to that person in respect of that loss or damage.
(4) In this section, a reference to the making of a recommendation is a reference to the making of a recommendation expressly or by implication.
(5) This section shall not apply to any licensee or class of licensees in such circumstances or under such conditions as may be prescribed.
Recommendations by licensees
27. —
(1) No licensee shall make a recommendation with respect to any investment product to a person who may reasonably be expected to rely on the recommendation if the licensee does not have a reasonable basis for making the recommendation to the person.
(2) For the purposes of subsection (1), a licensee does not have a reasonable basis for making a recommendation to a person unless —
(a) he has, for the purposes of ascertaining that the recommendation is appropriate, having regard to the information possessed by him concerning the investment objectives, financial situation and particular needs of the person, given such consideration to, and conducted such investigation of, the subject-matter of the recommendation as is reasonable in all the circumstances; and
(b) the recommendation is based on the consideration and investigation referred to in paragraph
(a).
(3) Where —
(a) a licensee, in making a recommendation to a person, contravenes subsection (1);
(b) the person, in reliance on the recommendation, does a particular act, or refrains from doing a particular act;
(c) it is reasonable, having regard to the recommendation and all other relevant circumstances, for the person to do that act, or to refrain from doing that act, as the case may be, in reliance on the recommendation; and
(d) the person suffers loss or damage as a result of doing that act, or refraining from doing that act, as the case may be,
then, without prejudice to any other remedy available to that person, the licensee is liable to pay damages to that person in respect of that loss or damage.
(4) In this section, a reference to the making of a recommendation is a reference to the making of a recommendation expressly or by implication.
(5) This section shall not apply to any licensee or class of licensees in such circumstances or under such conditions as may be prescribed.
Sad experience of a Minibond investor
Hi, Mr Tan
I have just started reading your blogs and find them very useful. I regretted not reading your blogs earlier.
I am also one of the unfortunate 'victims' in the Lehman Brothers case. I have bought some Mini Bond Series 6 from X last year. I did not know that my principal amount is not protected. I am actually quite careful with my money. I have always placed whatever money I have in the local banks' Fixed Deposits. This is the first time I bought a Mini bond and I may not have understood completely the nature of the Bond and that there are heavy risks involved. If I had known that, I will not have invested my hard earned money there.
I read your blog this morning and think your suggestion that more people like us should get together to lodge a complaint. I wonder will you be able to help us get in touch with common 'victim', maybe create a platform so that we can work together to 'fight' this battle, to get our hard earned savings back?
I just spoke to CASE and the officer was helpful to provide me this contact number to call for advice: FIDREC: tel: 6327 8878. I have just spoken to the officer in FIDREC and she advised me to lodge a formal complaint to X, with proofs of my allegations. I will have to go home and check out any documentary proofs before I can do that. I think it may be difficult because it could have been verbal only.
REPLY
I have spoken to a lawyer and see if they are able to take up a case on behalf of the investors who were misled into investing in these products.
My wish is that MAS will take action on behalf of the investors, to see if the financial institutions had failed in their duty to ensure that the products are suitable for the investors.
I have just started reading your blogs and find them very useful. I regretted not reading your blogs earlier.
I am also one of the unfortunate 'victims' in the Lehman Brothers case. I have bought some Mini Bond Series 6 from X last year. I did not know that my principal amount is not protected. I am actually quite careful with my money. I have always placed whatever money I have in the local banks' Fixed Deposits. This is the first time I bought a Mini bond and I may not have understood completely the nature of the Bond and that there are heavy risks involved. If I had known that, I will not have invested my hard earned money there.
I read your blog this morning and think your suggestion that more people like us should get together to lodge a complaint. I wonder will you be able to help us get in touch with common 'victim', maybe create a platform so that we can work together to 'fight' this battle, to get our hard earned savings back?
I just spoke to CASE and the officer was helpful to provide me this contact number to call for advice: FIDREC: tel: 6327 8878. I have just spoken to the officer in FIDREC and she advised me to lodge a formal complaint to X, with proofs of my allegations. I will have to go home and check out any documentary proofs before I can do that. I think it may be difficult because it could have been verbal only.
REPLY
I have spoken to a lawyer and see if they are able to take up a case on behalf of the investors who were misled into investing in these products.
My wish is that MAS will take action on behalf of the investors, to see if the financial institutions had failed in their duty to ensure that the products are suitable for the investors.
TV program on credit linked securities
An international TV station wish to interview investors who have invested in the structured products affected by the collapse of Lehman Brothers (i.e. the credit linked securities). They wish to know if the investor had been given the right advice by the financial adviser or bank officer who sold the product.
If you are affected and wish to be interviewed on TV, send your name, telephone number to me at kinlian@gmail.com.
If you are affected and wish to be interviewed on TV, send your name, telephone number to me at kinlian@gmail.com.
Investor in Minibond can seek redress
Dear Mr. Tan,
I read your blog everyday to see if there is any good news about Minibonds. I invested in this product on the advice of the bank officer. She told me that the risk is very small. I did not want to take risk.
I am told now that the Minibond may be worth nothing. I have a lot of my savings invested in this bond. Can I ask the bank to compensate me for my loss?
REPLY
There are many people in a similar situation as you are. I understand that the Financial Adviser Act require the adviser (i.e. the bank officer who sold the product to you) to ensure that the product is suitable to your needs. Clearly, a risky product of this type is not suitable.
You have a case to bring up against the bank officer. I suggest that you get many people in similar situation as you are and take up this matter collectively to the MAS or Consumer Association or other body. You can also take up a legal case.
I read your blog everyday to see if there is any good news about Minibonds. I invested in this product on the advice of the bank officer. She told me that the risk is very small. I did not want to take risk.
I am told now that the Minibond may be worth nothing. I have a lot of my savings invested in this bond. Can I ask the bank to compensate me for my loss?
REPLY
There are many people in a similar situation as you are. I understand that the Financial Adviser Act require the adviser (i.e. the bank officer who sold the product to you) to ensure that the product is suitable to your needs. Clearly, a risky product of this type is not suitable.
You have a case to bring up against the bank officer. I suggest that you get many people in similar situation as you are and take up this matter collectively to the MAS or Consumer Association or other body. You can also take up a legal case.
Lack of transparency in terminal bonus
Dear Mr. Tan,
With the problem facing AIG, is it better for me to buy insurance from NTUC? Will my savings be safe?
REPLY
It is better to buy term insurance and invest the difference in a low cost fund. Read this FAQ:
http://www.tankinlian.com/faq/fptips.html
NTUC now declares a low rate of annual bonus with a large part of the maturity benefit in the form of non-guaranteed terminal bonus. This is similar to the practice of the commercial insurance companies.
It is better not to rely on the non-guaranteed bonus, as there is a high chance that it will not be paid, even in good times. There is lack of transparency in the distribution of terminal bonus. The insurance company gets away with paying less than what is fair to the policyholder.
With the problem facing AIG, is it better for me to buy insurance from NTUC? Will my savings be safe?
REPLY
It is better to buy term insurance and invest the difference in a low cost fund. Read this FAQ:
http://www.tankinlian.com/faq/fptips.html
NTUC now declares a low rate of annual bonus with a large part of the maturity benefit in the form of non-guaranteed terminal bonus. This is similar to the practice of the commercial insurance companies.
It is better not to rely on the non-guaranteed bonus, as there is a high chance that it will not be paid, even in good times. There is lack of transparency in the distribution of terminal bonus. The insurance company gets away with paying less than what is fair to the policyholder.
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