Getting into the seaplane.
Monday, May 25, 2009
Tax incentive and commission
In some countries, there is tax incentive for saving in an insurance policy or to create an educational fund for a child. People are not aware about this incentive. The adviser helps them to gain access to the incentive through a suitable plan. The commission earned by the adviser is more than covered by the tax incentive. The customer gains from the plan, after paying the commission. All parties benefit.
In Singapore, where there is no tax incentive, the commission paid to the adviser is a burden to the consumer. It reduces the net return to the consumer. Some insurance companies do not care about the consumer and are willing to sell "poor value" products to them. They train their agents to "convince" the customer to buy these products. It is enethical to take advantage of the igonorance of the consumer.
All financial products with high upfront fees give poor value to the consumer. They include investment linked products, structured products, endowment and whole life policies.
Without any tax incentive, there is no justification for high commissions to be paid to financial advisers who sell the financial products. There is a pressing need for the regulator to set limits to the commissions that can be paid, so that the consumer's are given a fair deal.
Tan Kin Lian
Online Sudoku
Try this website for Sudoku games at 4 different levels and choice of symbols. Try solving with flowers.
Subscribe to:
Posts (Atom)