My website (www.tankinlian.com) contain useful resource materials. They are kept in PDF documents under the Information tab.
I am personally the biggest user of the resource materials. I get questions from consumers and journalists on a variety of topics. I refer to the resource materials to get the information that is needed to reply to the questions.
I also use the resource materials to write my books, articles, letters to the newspapers and to prepare for the educational talks that I give on many topics.
I am able to access the resource materials when I am overseas. I just go to the website, type in the keyword and get the PDF that I need.
I encourage corporations to have an active website to contain information for their customers and employees. This will make the corporation more accessible and can help to build up the business of the corporation. It is a wonderful tool that should not be neglected.
Tan Kin Lian
Tuesday, November 9, 2010
Past general elections in Singapore
Go to SGEP, select "Resources" and view the various resource materials about the past general elections in Singapore.
Extract the key information from a webpage
I wish to write a script (i.e. computer program) that can go to a webpage, extract the HTML code, and remove all advertisements, graphics and supplementary information - leaving only the key content of that page. This script will need an understanding of the structure of the HTML page and also some artificial intelligence. I will send the URL of the webpage to this script and it should return the text contained in the webpage.
If any expert knows how to write this script or wish to give it a try, send an e-mail to kinlian@gmail.com.
If any expert knows how to write this script or wish to give it a try, send an e-mail to kinlian@gmail.com.
MacDonald's Monopoly Promotion
Dear Mr Tan,
Recently Mcdonalds is having Monopoly promotion. When we buy their value meal they will issue playing cards to us. One of the prize is a car Kia Soul 1.6L (auto) worth $50000. In order to win the car we have to collect 3 cards namely Holland Road M318, Orchard Road M319, Ardmore Park M320
I have collected two cards Holland Road M318 and Ardmore Park M320. I need the 3rd card Orchard Road M319 to win the car. I will willing to share the money from the sale of the car equally between the holders of the three cards, after making a donation of $5000 to FISCA.
I know it will not be easy to win the car, but if we join together, we will have a much better chance to win together.
HXS
My comment
If anyone has the Orchard M319, please send an e-mail to kinlian@gmail.com. But I guess that this may be the most rare card.
Financial Planning book at 40% discount
You can enjoy a 40% discount on the financial planning book and other puzzle books through the 5 book bundle promotion at www.tankinlian.com/ishop.
Two key factors insurance buyers don't know
Published in the Straits Times Forum Page
I REFER to the reply by Mr Jeffrey Tan,
president of the Insurance and Financial Practitioners Association of Singapore
('Choice of insurance plan hinges on affordability, buyer's needs'; last Friday).
In buying a product, the consumer should be aware of its price.
This is especially important for a life insurance policy,
which requires a large sum of money to be paid over many years.
For most people, this could be the next biggest financial commitment
after the mortgage on their home.
Consumers should learn to read the benefit illustration of the life insurance policy
and look for two key items: distribution cost and accumulated savings.
The distribution cost is
the amount that is subtracted from the consumer's savings
to pay for the advice given by the agent.
Typically, the distribution cost takes away one to two years of the premium.
So, if the premium is $500 a month, the distribution cost could amount to $12,000.
Is the insurance agent's advice worth that much to the consumer?
The deduction results in a portion of the accumulated savings
being taken away from the consumer.
This portion could be more than 50 per cent after 30 years.
If the accumulated savings is $300,000,
the consumer could be giving away more than $150,000.
The net yield earned on the savings is usually insufficient to cover inflation.
So, how can the agent claim to be giving good advice to a consumer
by selling this policy?
In his reply, Mr Tan stated that not all term insurance policies
pay a lower commission than traditional whole-life and investment-linked policies.
I disagree.
If a consumer buys a term insurance to cover $300,000,
the premium should be less than $400 a year.
The agent may be able to earn $400 in commission over a few years.
If the agent sells a whole-life or investment-linked policy,
the agent may be able to earn more than several thousand dollars in commission.
Unsurprisingly, most agents prefer to sell the policy
that pays a fatter commission.
They tell consumers to avoid a term insurance policy because it does not give any return.
However, consumers are not aware of how much they will be losing
in a whole-life or investment-linked policy.
Tan Kin Lian
http://www.straitstimes.com/
('Choice of insurance plan hinges on affordability, buyer's needs'; last Friday).
In buying a product, the consumer should be aware of its price.
This is especially important for a life insurance policy,
which requires a large sum of money to be paid over many years.
For most people, this could be the next biggest financial commitment
after the mortgage on their home.
Consumers should learn to read the benefit illustration of the life insurance policy
and look for two key items: distribution cost and accumulated savings.
The distribution cost is
the amount that is subtracted from the consumer's savings
to pay for the advice given by the agent.
Typically, the distribution cost takes away one to two years of the premium.
So, if the premium is $500 a month, the distribution cost could amount to $12,000.
Is the insurance agent's advice worth that much to the consumer?
The deduction results in a portion of the accumulated savings
being taken away from the consumer.
This portion could be more than 50 per cent after 30 years.
If the accumulated savings is $300,000,
the consumer could be giving away more than $150,000.
The net yield earned on the savings is usually insufficient to cover inflation.
So, how can the agent claim to be giving good advice to a consumer
by selling this policy?
In his reply, Mr Tan stated that not all term insurance policies
pay a lower commission than traditional whole-life and investment-linked policies.
I disagree.
If a consumer buys a term insurance to cover $300,000,
the premium should be less than $400 a year.
The agent may be able to earn $400 in commission over a few years.
If the agent sells a whole-life or investment-linked policy,
the agent may be able to earn more than several thousand dollars in commission.
Unsurprisingly, most agents prefer to sell the policy
that pays a fatter commission.
They tell consumers to avoid a term insurance policy because it does not give any return.
However, consumers are not aware of how much they will be losing
in a whole-life or investment-linked policy.
Tan Kin Lian
http://www.straitstimes.com/
What is "churning" ?
Dear Kin Lian
I hope you could consider publishing this in your Blog to clear the doubts as currently I personally feel that this definition is very vague.
What is the definition of 'CHURNING'
Currently it seems there is no industry standards to the definition of 'CHURNING'.
Scenario 1, if a investor purchased a unit trust paid 3% upfront and made profit of 10% in less than 1-2 months and decided to sell and reinvest in another fund, and does not mind paying another 3% to the adviser, is this "Churning"?
Scenario 2, a investor purchased a unit trust paid 3% upfront, loss 1% and sell the investments, reinvest again and pay another 3% upfront, this is definitely 'CHURNING'.
In some firms, they take Scenario 1 as 'churning'. Is this the industry practise?
Even currently in investment platforms there are 'WRAP' and 'NON WRAP' fees. 'WARP' are those which charges as invester x% annually and when they switch there is no up front whereas 'NON WRAP' there are up-front. Again, for 'WRAP' fees it can vary from 0.5% to as much as 1.5% annually. Some firms take 'NON WRAP' as CHURNING, so if this is true that why implement such facility. Must as well remove it.
As a long term investor, why should I go for 'WRAP' fees if I decide to just remain in 1 good fund. By paying 1.5% annually, it deplict my value and why should I let the adviser and firm earn it.
Banks in the past adopt 'NON WRAP' whilst FA Firms tend to discourage it and make it mandatory to go 'WRAP'. Why? Maybe they need the 'WRAP FEES' to maintain their business which is ridiculous.
Mr Tan, it will be good if you could maybe rope in industry experts or the blog members to comment on this. This issue has in the past and now, caused advisers to be forced to resign and terminated because of scenario 1.
Concerned Investor
My view
The investor has to pay an upfront fee of 3% to 5% or an annual wrap fee of 1.5% to invest in a unit trust. These charges are rather high and depletes the return to the investor. But, they are good fees shared by the adviser and the FA firm. There is now a dispute between the adviser and the FA firm in how to share the proceeds of the fees.
Churning is a term used to describe the activity of an agent giving advice to the client to terminating one insurance policy and take up a different policy. It allows the agent to earn the high upfront commission (of 1 to 2 year's premium) again. It harms the interest of the consumer.
It can be used to describe the activity of switching from one fund to another. In this case, the cost to the consumer is 3% to 5% of the premium, and not a large percentage. However, if this activity is carried out several times in a year, the harm can be quite large. So, it should be treated as churning also.
Investing in a unit trust should be a long term investment. The investor should keep the investment for a few years, before making a switch for the purpose of asset allocation. It should not be done earlier.
If the consumer wishes to speculate in the stock market for short term gains, the consumer should select the liquid blue chip shares. The cost of trading is only 0.3% of the invested sum and has to be paid on the way in, and on the way out. The speculation should not be made through a fund, which is for long term investment.
Abu Dhabi and Masdar
I have visited Dubai a few times but have not yet visited Abu Dhabi, which is the capital of the United Arab Emirates and just 1 and 1/2 hour drive from Dubai. Someone told me that Abu Dhabi is rather conservative and is quite different from the open and cosmopolitan culture in Dubai.
Abu Dhabi has a bold project to develop a new city, called Masdar. It is being marketed as what a modern city should be. It uses renewable energy and has an underground system using automated, driver-less personal vehicles. This allows the pedestrians to walk at the street level free of vehicles.
I heard that the development of Masdar is behind schedule - still, I am interested to take a look.
Abu Dhabi has a bold project to develop a new city, called Masdar. It is being marketed as what a modern city should be. It uses renewable energy and has an underground system using automated, driver-less personal vehicles. This allows the pedestrians to walk at the street level free of vehicles.
I heard that the development of Masdar is behind schedule - still, I am interested to take a look.
Win-win approach
I found an interesting example of the win-win approach in Dubai.
During the global financial crisis, Dubai needed a few billion dollars to pay off the short term credit that was pulled out by the banks. They had to turn to Abu Dhabi for help. In return for the financial assistance, Dubai agreed to rename Burj Dubai (which is currently the tallest building in the world) to Burj Khalifa, i.e. after the name of the Ruler of Abu Dhabi.
Burj Dubai was supposed to be a landmark in Dubai, so the change of name cause the loss of this iconic name. They found an interesting solution. Burj Khalifa is next to Dubai Mall, which is a prominent shopping mall in Dubai. So, the Metro station that serve this location is now called Burj Khalifa Dubai Mall, which allow the name of Dubai to be retained for this icon.
During the global financial crisis, Dubai needed a few billion dollars to pay off the short term credit that was pulled out by the banks. They had to turn to Abu Dhabi for help. In return for the financial assistance, Dubai agreed to rename Burj Dubai (which is currently the tallest building in the world) to Burj Khalifa, i.e. after the name of the Ruler of Abu Dhabi.
Burj Dubai was supposed to be a landmark in Dubai, so the change of name cause the loss of this iconic name. They found an interesting solution. Burj Khalifa is next to Dubai Mall, which is a prominent shopping mall in Dubai. So, the Metro station that serve this location is now called Burj Khalifa Dubai Mall, which allow the name of Dubai to be retained for this icon.
Capital controls to stop asset bubbles
Asian economies may need to turn to capital controls as quantitative easing by the U.S. threatens to spur asset bubbles in the region’s stock, currency and property markets, the World Bank said.
Any curbs should be “targeted,” temporary and tailored to address specific problems, Sri Mulyani Indrawati, a World Bank managing director, said in an interview. This could include countries tying up funds for as long as a year to help limit hot-money, she said.
http://www.bloomberg.com/news/2010-11-08/world-bank-says-asia-may-need-capital-controls-to-curb-fed-created-bubbles.html
Any curbs should be “targeted,” temporary and tailored to address specific problems, Sri Mulyani Indrawati, a World Bank managing director, said in an interview. This could include countries tying up funds for as long as a year to help limit hot-money, she said.
http://www.bloomberg.com/news/2010-11-08/world-bank-says-asia-may-need-capital-controls-to-curb-fed-created-bubbles.html
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