Distributors were negligent

The distributors who sold the credit linked notes were negligent, but were not cheating.

Most of them were probably ignorant about the true nature of these structured products. They mis-represented the products, but not intentionally. In the greed to earn the attractive commission on the sale of the products, the sales representatives failed in their duty to give proper advice and information to the customers. The financial institutions also failed in their duty to supervise the sales representatives.

The negligence has caused loss to the investors. The investors deserve to be fairly compensated for the loss. The financial institution cannot hide under the disclaimers signed by the customers, as there was negligence and misrepresentation.

The compensation does not need to be full. It would be fair for the loss to be shared equally between the investor and the negligent distributor.

An honorable financial institution would recognise that it had neglected its duty and come forward to offer a fair settlement to all affected customers, and not only to certain customers based on educational level or age. Great Eastern Life has acted honorably and deserve to be commended.

But many financial institutions chose to look at its bottom line profit, and decided to use its financial power to fight these cases in court. And, sadly, they were backed by the Government.

When will Singapore return to its old values of honesty, fairness and justice?

Tan Kin Lian

Reduced air fare

A regular airline is willing to be flexible in its fare to get a business. Read this story.

New Exotic Investments Emerging on Wall Street

Read this article. The Wall Street bankers are primarily interested in earning the large fees by creating these products. They will leave it to the retail investors to face the consequences. Advice: stay away from all types of exotic products when they come to Singapore and are marketed to you.

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The future will be different

A consumer told me about his personal experience. He took an endowment policy with NTUC Income and a similar policy with another company. Both policies matured. The total premium paid was $25,000 for each policy. The Income policy returned $40,000. The other policy paid $27,000. The difference was $13,000.

Here are my observations:
a) I have heard about similar experiences from other policyholders.
n) It is possible for an insurance company to give poor returns, due to high expenses and low bonus payout
c) NTUC Income gave a good return in past years, but the future will be different

Lesson: buy term and invest the difference. Read here:

Read this FAQ:
http://www.tankinlian.com/faq/savings.html

Cheated by a lawyer

An investor told me that he has been cheated by a lawyer. The lawyer took up his case and charged him a large fee to handle it. The lawyer did not handle the case diligently and did not act in his interest.

I advised the client to lodge a complaint with the Law Society regarding the conduct of the lawyer. But, he is not prepared to do so.

Many Singaporeans are so gullible that they can be cheated time and again. The standard of honesty in our society has deteriorated to a low level.

BBC: Insurance boss attacks fat cat pay

Read this article. It explains why you get a poor return on your participating policy.