Sunday, March 22, 2009
AUD, NZD on way of recovery
The AUD and NZD dropped by about 30% a few months ago. It stayed at that level for a few months. They are now starting to recover. I saw that NZD had increased 10% during the past week .The AUD has recovered by 5%. Perhaps, the previous drop was too sharp and it is now reaching its fair level. But interest rate in AUD and NZD are now quite modest (compared to the high rates previously).
Proposal to solve the global crisis
Here is my proposal to solve the global crisis. I hope that the US government will be considering an approach along a similar line. The strategy is to stabilise housing prices at replacement cost, less depreciation.
Buying a new HDB Flat
A Singaporean who worked in China for nearly 10 years. While in China, be bought a private property. He sold it on returning back to Singapore, after completing his contract.
He is barred from buying a new HDB flat due to the following condition. I find this condition to be unfair to him. I advised him to consult his Member of Parliament.
Ownership / Interest in Property
You, your spouse, any occupiers listed in the Application Form or their spouses must not own or dispose any other flat, house, building or land* or have an estate or interest at any time within 30 months before the date of application, or between the date of the application and the date of taking possession of the new flat.
* includes but is not limited to HUDC flats (whether privatized or not), properties acquired by gift, properties inherited as beneficiaries under a will or as a result of the Intestate Succession Act, private properties, commercial properties and industrial properties, as well as properties owned / acquired / disposed through nominees regardless of whether any of these properties are located in Singapore or overseas.
He is barred from buying a new HDB flat due to the following condition. I find this condition to be unfair to him. I advised him to consult his Member of Parliament.
Ownership / Interest in Property
You, your spouse, any occupiers listed in the Application Form or their spouses must not own or dispose any other flat, house, building or land* or have an estate or interest at any time within 30 months before the date of application, or between the date of the application and the date of taking possession of the new flat.
* includes but is not limited to HUDC flats (whether privatized or not), properties acquired by gift, properties inherited as beneficiaries under a will or as a result of the Intestate Succession Act, private properties, commercial properties and industrial properties, as well as properties owned / acquired / disposed through nominees regardless of whether any of these properties are located in Singapore or overseas.
Save money with a basic Medishield plan
Hi Mr. Tan,
I find that the premium for private Shield has become more expensive at the older ages. My father is 76 years old and my mother is 69 years old. Shall I continue to insure them under Incomeshield M Plans, or switch back to Basic MediShield? If there is a need, we can visit a private hospital and pay out of our savings.
REPLY
If your parents find the premium for private Shield to be too expensive, it is better to switch back to Basic Medishield. They can go to subsidised wards in Government hospitals, rather than private hospitals. You can switch back to basic Medishield at anytime, even after gae 70.
I find that the premium for private Shield has become more expensive at the older ages. My father is 76 years old and my mother is 69 years old. Shall I continue to insure them under Incomeshield M Plans, or switch back to Basic MediShield? If there is a need, we can visit a private hospital and pay out of our savings.
REPLY
If your parents find the premium for private Shield to be too expensive, it is better to switch back to Basic Medishield. They can go to subsidised wards in Government hospitals, rather than private hospitals. You can switch back to basic Medishield at anytime, even after gae 70.
Fraud alert - insurance claim
Dear Kin Lian,
I like to report to our motor insurer about a suspicious accident with this vehicle on 19 Mar 09; (detail provided). The driver; man aged 50 something.
I notice from my right side mirror, he approached very close towards my right side and appears to deliberately hit my right rear side and bumper.
I got down checking and finding that his vehicle already had a bad pre-existing damage on his front lefts side that supposes to collide with me (it is a deep dent and paintwork scratches) but my car was only slightly scrapped. I confronted him and he drives off after a verbal exchange.
I was suspicious because I have been in front of him all the time and keeping on a straight path within my lane. And also my vehicle slightly damaged but he and his female passenger kept blaming me for cutting into his path.
He probably attempt to induce fraudulent insurance claim for his existing damage. To protect other motorist; any similar accident claim involving this vehicle should be carefully investigated.
REPLY
I suggest that you lodge a report with the Police. It is their duty to investigate such matters.
I like to report to our motor insurer about a suspicious accident with this vehicle on 19 Mar 09; (detail provided). The driver; man aged 50 something.
I notice from my right side mirror, he approached very close towards my right side and appears to deliberately hit my right rear side and bumper.
I got down checking and finding that his vehicle already had a bad pre-existing damage on his front lefts side that supposes to collide with me (it is a deep dent and paintwork scratches) but my car was only slightly scrapped. I confronted him and he drives off after a verbal exchange.
I was suspicious because I have been in front of him all the time and keeping on a straight path within my lane. And also my vehicle slightly damaged but he and his female passenger kept blaming me for cutting into his path.
He probably attempt to induce fraudulent insurance claim for his existing damage. To protect other motorist; any similar accident claim involving this vehicle should be carefully investigated.
REPLY
I suggest that you lodge a report with the Police. It is their duty to investigate such matters.
Financial planning for newborn
Hi Mr. Tan,
I'm doing some financial/insurance planning for my newborn. I plan to purchase a Vivolife Policy (Sum Assured: $50K), with monthly premium of $86 payable over 10 years. And another term insurance (Sum Assumed: $100K), with monthly premium of $12. Is it recommended to do so?
In addition, to start a saving plan to accumulate his education fund in 20 years time. I would need some advise on which is the better option below;
Option 1: Monthly premium of $100 into Investment-Linked Product or Endowment Plan (PayMyUni under Income) ?
I'm doing some financial/insurance planning for my newborn. I plan to purchase a Vivolife Policy (Sum Assured: $50K), with monthly premium of $86 payable over 10 years. And another term insurance (Sum Assumed: $100K), with monthly premium of $12. Is it recommended to do so?
In addition, to start a saving plan to accumulate his education fund in 20 years time. I would need some advise on which is the better option below;
Option 1: Monthly premium of $100 into Investment-Linked Product or Endowment Plan (PayMyUni under Income) ?
Option 2: Initial sum of $5K for Investment-Linked Product, with yearly top-up of $1K. Btw, which is the product worth investing in?
Option 3: Lump sum of $10K into SAIL (Income Policy), with projected return of $24K in 20 years.
REPLY
I am not familiar with the Vivolife product, but I understand that it has high charges (to pay commission to the agent) and gives a poor return to the policyholder. You can search my blog for comments from people who are familiar with this product.
Read this FAQ about saving for your child's education.
REPLY
I am not familiar with the Vivolife product, but I understand that it has high charges (to pay commission to the agent) and gives a poor return to the policyholder. You can search my blog for comments from people who are familiar with this product.
Read this FAQ about saving for your child's education.
Worse than being retrenched
Dear Mr. Tan,
I was forced out by my ex-company(a listed local company) recently, without any form of compensation. I had been there for X years and the reason they gave was that the company has not planned for such exercise and even they do, they do not give it to ‘non-performing’ employee like me. While I did not agree to my ex-supervisor’s appraisal rating on me, I had no choice but to resign on my own or else my company will dismiss me!
Mr. Tan, do u think I have ground to approach MOM for help in seeking some form of remuneration package from my ex-company?
REPLY
I suggest that you talk to Ministry of Manpower and get their advice. You can also talk to your Member of Parliament.
SCMP:New bank rules should better protect customers
Asymmetric information is not an elegant phrase, but it is a useful economic concept by which to analyse situations that involve conflicts of interest - and whether, and how, they need to be regulated. A salesman who tries to promote a product is asymmetrically disadvantaged because he does not know - and can only guess - the size of your wallet. It is not so with banks, which have privileged access to clients' financial information and have often exploited it to sell risky financial products. The Lehman Brothers minibond fiasco has exposed that danger and become a catalyst for regulatory change. Hopefully, better supervision of banking activities, which will come into force this year, will bring more protection for clients and their financial information.
The banks have fought hard to resist changes, arguing at one point that knowledge of clients' finances enables banks to tailor services to their needs. Leaving aside this obviously self-serving argument, regulators around the world have been having the upper hand as a result of the global financial turmoil - and Hong Kong is no different. Instances of apparent mis-selling of Lehman minibonds have helped generate intense pressure on banks to adopt new regulations.
The new rules require banks to separate traditional banking services, such as deposit-taking and making loans, from retail securities and investment services. One of the most irritating and unfair bank practices in recent years has been allowing counter tellers to look at clients' bank books during ordinary transactions and then promote dodgy investment or insurance products. Under the new rules, they can no longer do so. Furthermore, one bank department cannot share clients' information with another to promote sales without their express consent. Recordings of investment transactions will be made and retained for at least seven years. In cases involving the sale of risky products, a third staff member needs to review the transaction. It is not clear what amounts to high-risk investments these days when the share prices of some US banking and insurance giants are behaving like penny stocks. Even the shares of locally beloved HSBC have plunged to lows most investors found scarcely imaginable.
The new rules will not ban all instances of cross-selling. That would not be desirable, because banks offer mostly legitimate investment products. But they should offer better protection to customers.
The banks have fought hard to resist changes, arguing at one point that knowledge of clients' finances enables banks to tailor services to their needs. Leaving aside this obviously self-serving argument, regulators around the world have been having the upper hand as a result of the global financial turmoil - and Hong Kong is no different. Instances of apparent mis-selling of Lehman minibonds have helped generate intense pressure on banks to adopt new regulations.
The new rules require banks to separate traditional banking services, such as deposit-taking and making loans, from retail securities and investment services. One of the most irritating and unfair bank practices in recent years has been allowing counter tellers to look at clients' bank books during ordinary transactions and then promote dodgy investment or insurance products. Under the new rules, they can no longer do so. Furthermore, one bank department cannot share clients' information with another to promote sales without their express consent. Recordings of investment transactions will be made and retained for at least seven years. In cases involving the sale of risky products, a third staff member needs to review the transaction. It is not clear what amounts to high-risk investments these days when the share prices of some US banking and insurance giants are behaving like penny stocks. Even the shares of locally beloved HSBC have plunged to lows most investors found scarcely imaginable.
The new rules will not ban all instances of cross-selling. That would not be desirable, because banks offer mostly legitimate investment products. But they should offer better protection to customers.
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