I have received 716 signatures asking me to stand for election for public office.
The distribution of the replies are:
> Prefer TKL for elected president 26%
> Prefer TKL for member of parliament 14%
> Prefer TKL for both or either 60%
Several people have asked for a new petition form that allows them to leave out some of the particulars. Here is the new form:
http://www.petitiononline.com/TKLFP02/petition.html
Tuesday, December 9, 2008
Survey results - consumer association for financial services
Results of survey: 154 people replied.
What is a good name for the consumer association for financial services?
FISCA - financial service consumer assocation 66 (42%)
CORE - consumer research and education 39 (25%)
SACRE - Singapore association for consumer research and educaiton 12 (7%)
No need for this association 37 (24%)
What is a good name for the consumer association for financial services?
FISCA - financial service consumer assocation 66 (42%)
CORE - consumer research and education 39 (25%)
SACRE - Singapore association for consumer research and educaiton 12 (7%)
No need for this association 37 (24%)
Monday, December 8, 2008
Financial Services Consumer Association - Survey
If you wish to serve in the pro-tem committee to set up this association, or to help as a volunteer in some capacity at a future date, or give some suggestions on the work of the association, you can participate in this survey:
http://www.surveymonkey.com/s.aspx?sm=mFi1bCabtn2VHpVrBPRuUA_3d_3d
http://www.surveymonkey.com/s.aspx?sm=mFi1bCabtn2VHpVrBPRuUA_3d_3d
Giving a fair deal to policyholders
We have to be honest in our dealings with other people. Honesty is to be transparent and fair. We have to give the relevant information to the other party, so that they can make an informed judgement.
Let us look at the opposite value, which is dishonesty or cheating. Cheating is defined as taking advantage of another person, for one’s personal benefit, at the expense of the other person.
Let us look at the example of the sale of life insurance. The policy has a high upfront charge to pay commission to the agent. The commission earned is excessive, compared to the value of the service. The policyyholder pays an average of $2,000 on a typical policy of $100 a month. This high charge is hidden from the policyholder.
It takes about 15 years for the policy to earn sufficient investment income to cover the upfront charge. If the policy is kept longer, it may show a positive return on the premium. The policyholder does not realise that the high charges take away 40% or more of the total investment income. It leaves a poor return to the policyholder, that is insufficient to cover inflation.
The policyhohlder could have inviested in other "fairer" products that have lower charges and give a better return to the customer.
The insurance agent is able to sell the life insurance contract at the high charges, because they are trained to over-sell the value of the insurance contact. It tells the customer about the importance of protecting the family from the financial loss due to the death of the breadwinner.
A more honest way is to advise the policyholder to buy term insurance, where the cost is much lower and affordable.
To prevent the excessive abuse of customers, it is important for a life insurance company to act honestly and to reduce the excessive charges. When I managed an insurance company, I observe this principle and reduce the expenses to give better value to the customers. After my departure, this organisation has increased its expenses tremendously.
In many countries, the authority sets limits to these charges, to prevent abuse of the public. In Singapore, there are no limits, so long as the commission is disclosed. Unfortunately, this approach does not work, as the public is not informed about it.
Let us look at the opposite value, which is dishonesty or cheating. Cheating is defined as taking advantage of another person, for one’s personal benefit, at the expense of the other person.
Let us look at the example of the sale of life insurance. The policy has a high upfront charge to pay commission to the agent. The commission earned is excessive, compared to the value of the service. The policyyholder pays an average of $2,000 on a typical policy of $100 a month. This high charge is hidden from the policyholder.
It takes about 15 years for the policy to earn sufficient investment income to cover the upfront charge. If the policy is kept longer, it may show a positive return on the premium. The policyholder does not realise that the high charges take away 40% or more of the total investment income. It leaves a poor return to the policyholder, that is insufficient to cover inflation.
The policyhohlder could have inviested in other "fairer" products that have lower charges and give a better return to the customer.
The insurance agent is able to sell the life insurance contract at the high charges, because they are trained to over-sell the value of the insurance contact. It tells the customer about the importance of protecting the family from the financial loss due to the death of the breadwinner.
A more honest way is to advise the policyholder to buy term insurance, where the cost is much lower and affordable.
To prevent the excessive abuse of customers, it is important for a life insurance company to act honestly and to reduce the excessive charges. When I managed an insurance company, I observe this principle and reduce the expenses to give better value to the customers. After my departure, this organisation has increased its expenses tremendously.
In many countries, the authority sets limits to these charges, to prevent abuse of the public. In Singapore, there are no limits, so long as the commission is disclosed. Unfortunately, this approach does not work, as the public is not informed about it.
Salaries of CEOs of Motor Companies
Sent to me by AT
According to Equilar Inc., an executive compensation research and data provider, the annual compensation of the following CEOs (in USD) were:
President of Toyota: $1 million
CEO of General Motor (Wagoner: $15.7 million
CEO of Ford Motor (Mulally): $22.8 million,
What’s missing is a formula for determining what is a fair salary. I suggest using 365 times 12 hours per day = hours that an executive works as the basis for an hourly rate to be paid. This gives executives the premise that they work 12 hour days, 365 days per year. hat works out to 4,380 per year. Then determine what a “reasonable” pay per hour is.
The claim that outsize income packages are necessary to retain talent is unproven be the GM fiasco. Mr. Waggoners pay package of around $15,000,000 works out to be $3, 425 PER HOUR. And what did the company get for this - leadership into insolvency?
Using the above formula, Toyota’s president earned under $230/hour and look at the great job he’s done. Did Mr. Waggoner do 20 times as well as Toyota? I leave that to the reader.
According to Equilar Inc., an executive compensation research and data provider, the annual compensation of the following CEOs (in USD) were:
President of Toyota: $1 million
CEO of General Motor (Wagoner: $15.7 million
CEO of Ford Motor (Mulally): $22.8 million,
What’s missing is a formula for determining what is a fair salary. I suggest using 365 times 12 hours per day = hours that an executive works as the basis for an hourly rate to be paid. This gives executives the premise that they work 12 hour days, 365 days per year. hat works out to 4,380 per year. Then determine what a “reasonable” pay per hour is.
The claim that outsize income packages are necessary to retain talent is unproven be the GM fiasco. Mr. Waggoners pay package of around $15,000,000 works out to be $3, 425 PER HOUR. And what did the company get for this - leadership into insolvency?
Using the above formula, Toyota’s president earned under $230/hour and look at the great job he’s done. Did Mr. Waggoner do 20 times as well as Toyota? I leave that to the reader.
Association to educate consumers on financial service
Several people have asked me to form an association to educate consumers and help them to identify and buy financial and insurance products that are of good value. This will reduce their exposure to bad products such as the credit linked notes and high cost life insurance products.
Is there a need for such an association? What name is suitable for this association? Please take part in the poll on the right panel.
Is there a need for such an association? What name is suitable for this association? Please take part in the poll on the right panel.
Sunday, December 7, 2008
SCMP:Gripes about banks double, but over what?
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=MMFLFJ67IQQ4&linkid=69b75443-86a5-4375-81d5-442df893c00f&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
7 Dec 2008
Nick Gentle
In the first 10 months of this year, complaints about banks reached more than double the figure for the whole of 2007 – and that is excluding the 10,000 complaints about their sale of minibonds that lost their value when Lehman Brothers collapsed.
While the Hong Kong Monetary Authority agreed to release the figures – 1,050 up to October 31 against 469 last year – it would not say which banks were the subjects of the complaints, nor what complaints were about.
The HKMA claims it is bound by the Banking Ordinance to keep that information secret.
However, commentators question whether withholding such information is in the public interest. David Webb, a campaigner for better corporate governance, said consumers were entitled to know whether financialservices providers were being complained about regularly.
“ Information is the lifeblood of free markets, and enabling investors and depositors to make informed choices is a good thing,” Mr Webb said. “ I think the HKMA should be much more transparent about its complaints and enforcement activities.
“I see no reason why the HKMA should not publish complaint statistics on a per-institution basis.”
To make sure larger institutions are not unfairly over-represented, the authority could state the figures as a percentage of a bank’s unique account holders.
Mr Webb noted that the Securities and Futures Commission, which regulates stockbrokers and listed companies, regularly published reports on enforcement action it has taken and complaints it has received.
“The HKMA’s traditional reason for not publicising disciplinary action has been that it might undermine confidence in the banks concerned. My response would be: ‘So what? It should’.”
An HKMA spokesman said the authority investigated all complaints to decide whether and how they could be taken further.
“Upon receipt of a written complaint, we will examine it and the written response from the bank concerned,” the spokesman said. “Our focus is on whether the bank’s complainthandling procedures are working properly.
“Should there be concerns about the bank’s handling of the complaint, we will refer the complaint to the bank for reinvestigation and a further reply to the complainant.”
If complaints related to breaches of the Banking Code of Practice, the HKMA would work with banks to address any issues, the spokesman said.
“ The HKMA has a supervisory interest in cases where a bank may have acted in a way that is improper or imprudent,” he said. “The HKMA will pursue these issues … and where necessary, require remedial action to be taken by the bank.”
But Civic Party lawmaker Ronny Tong Ka-wah, who has tabled a Legislative Council resolution asking the government to review the regulatory regime, said keeping issues between the regulator and the bank might not be in the public interest.
“ At the very least we should be able to see a breakdown of the nature of the complaints,” he said. “Otherwise, how are consumers going to know what they should be looking for and can expect in terms of service?”
7 Dec 2008
Nick Gentle
In the first 10 months of this year, complaints about banks reached more than double the figure for the whole of 2007 – and that is excluding the 10,000 complaints about their sale of minibonds that lost their value when Lehman Brothers collapsed.
While the Hong Kong Monetary Authority agreed to release the figures – 1,050 up to October 31 against 469 last year – it would not say which banks were the subjects of the complaints, nor what complaints were about.
The HKMA claims it is bound by the Banking Ordinance to keep that information secret.
However, commentators question whether withholding such information is in the public interest. David Webb, a campaigner for better corporate governance, said consumers were entitled to know whether financialservices providers were being complained about regularly.
“ Information is the lifeblood of free markets, and enabling investors and depositors to make informed choices is a good thing,” Mr Webb said. “ I think the HKMA should be much more transparent about its complaints and enforcement activities.
“I see no reason why the HKMA should not publish complaint statistics on a per-institution basis.”
To make sure larger institutions are not unfairly over-represented, the authority could state the figures as a percentage of a bank’s unique account holders.
Mr Webb noted that the Securities and Futures Commission, which regulates stockbrokers and listed companies, regularly published reports on enforcement action it has taken and complaints it has received.
“The HKMA’s traditional reason for not publicising disciplinary action has been that it might undermine confidence in the banks concerned. My response would be: ‘So what? It should’.”
An HKMA spokesman said the authority investigated all complaints to decide whether and how they could be taken further.
“Upon receipt of a written complaint, we will examine it and the written response from the bank concerned,” the spokesman said. “Our focus is on whether the bank’s complainthandling procedures are working properly.
“Should there be concerns about the bank’s handling of the complaint, we will refer the complaint to the bank for reinvestigation and a further reply to the complainant.”
If complaints related to breaches of the Banking Code of Practice, the HKMA would work with banks to address any issues, the spokesman said.
“ The HKMA has a supervisory interest in cases where a bank may have acted in a way that is improper or imprudent,” he said. “The HKMA will pursue these issues … and where necessary, require remedial action to be taken by the bank.”
But Civic Party lawmaker Ronny Tong Ka-wah, who has tabled a Legislative Council resolution asking the government to review the regulatory regime, said keeping issues between the regulator and the bank might not be in the public interest.
“ At the very least we should be able to see a breakdown of the nature of the complaints,” he said. “Otherwise, how are consumers going to know what they should be looking for and can expect in terms of service?”
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