Many corporate websites have a lot of information. It is extremely difficult to navigate the website (also called a spider web) to find the right page. Each page contained a lot of information, and usually contains ambiguity which is not easily understood by the general public.
The staff handling inquiries expect the customer to know where to find the webpage and how to understand its contents. The staff usually does not understand that the general public has to deal with many other issues and understanding information from the website is not easy.
A good corporate website provides an easy way for the general public to send an e-mail or call a number to ask a question. The inquiry staff can respond with the answer. The best response is a specific answer to the question, with a link to the webpage for more details.
The corporation should know that their website is really the source of reference for their staff to get the information to send to the public. They cannot expect the public to know how to navigate or understand their spider web.
Tan Kin Lian
Wednesday, March 17, 2010
Video on Financial Education
Dear Mr Tan
The following site is conducting an ongoing series of financial lectures on video. They have added video #40 just last night. Hope you could use them, one video at a time, to educate the public.
http://marketplace.publicradio.org/collections/coll_display.php?coll_id=20216
The following site is conducting an ongoing series of financial lectures on video. They have added video #40 just last night. Hope you could use them, one video at a time, to educate the public.
http://marketplace.publicradio.org/collections/coll_display.php?coll_id=20216
Tuesday, March 16, 2010
Postings on Land banking
For investors who are caught in land banking investments or have been approached, you can read my postings on this topic by clicking on the label "Land Banking" on the right.
Postings on Benefit Illustration
I have made over 20 postings about the benefit illustration that comes with a life insurance policy. I have collected them together under the label "Benefit Illustration" shown on the right. I urge consumers to follow my tip and understand what to look for in the benefit illustration.
Life insurance - effect of deduction
When an agent tries to sell you a life insurance policy, he (or she) is required to give you a benefit illustration. It is a detailed document comprising of more than 15 pages and contain a lot of confusing information. You only need to look for 1 figure - "effect of deduction" at the end of the 20th year. Calculate this amount as a percentage of the "accumulated premium". If this percentage exceeds 15%, you should avoid the policy. For example, if the effect of deduction is $25,000 and the "value of accumulated premium" is $100,000, the effect of deduction is 25%. As this is higher than 15%, you should NOT buy the insurance plan. In this example, you are paying $10,000 more than is fair to the consumer.
For investment linked plans, you are not given the value of accumulated premium. In this case, you have to add up the "total cash value" with the "effect of deduction" to get the "value of accumulated premium. Take the figures based on 5% projection (as 9% is unrealistically high). If the total ash value is $100,000 and the effect of deduction is $30,000, the "value of accumulated premium is $130,000 and the effect of deduction is 23%, which is too high.
Do not invest in any insurance policy, where too much of the accumulated premium is taken away from you. It is your money, and you deserve a fair rate of return for your years of hard work and savings. Do not give it away. Buy a term insurance for 25 years and invest your savings in a low cost investment fund, such as the STI ETF, Read about this concept in my book, Practical Guide on Financial Planning.
Tan Kin Lian
For investment linked plans, you are not given the value of accumulated premium. In this case, you have to add up the "total cash value" with the "effect of deduction" to get the "value of accumulated premium. Take the figures based on 5% projection (as 9% is unrealistically high). If the total ash value is $100,000 and the effect of deduction is $30,000, the "value of accumulated premium is $130,000 and the effect of deduction is 23%, which is too high.
Do not invest in any insurance policy, where too much of the accumulated premium is taken away from you. It is your money, and you deserve a fair rate of return for your years of hard work and savings. Do not give it away. Buy a term insurance for 25 years and invest your savings in a low cost investment fund, such as the STI ETF, Read about this concept in my book, Practical Guide on Financial Planning.
Tan Kin Lian
Need for stronger regulation
I spoke to a professor in a UK university who was previously an actuary working in the insurance industry. He told me about the background of the regulatory environment and the mis-selling over the past decades.
For many years, the authority in the UK regulated the sales process, disclosure of information and expected financial advisers to observe ethics and professionalism. It did not work. Many agents sold bad products to their customers to earn high commisison. The regulator imposed heavy fines on the financial institutions but it still did not solve the problem.
The regulator has finally decided to ban the payment of commission to agents. This will take place in the near future.
Singapore followed the UK approach in regulation. But the authority in Singapore did not impose the heavy fines on the institutions for mis-selling. The situation is quite bad in Singapore and many consumers are offered bad products that gave them a poor return on their savings. What will Singapore do, now that they role model (UK) has found their approach to be a failure?
Tan Kin Lian
For many years, the authority in the UK regulated the sales process, disclosure of information and expected financial advisers to observe ethics and professionalism. It did not work. Many agents sold bad products to their customers to earn high commisison. The regulator imposed heavy fines on the financial institutions but it still did not solve the problem.
The regulator has finally decided to ban the payment of commission to agents. This will take place in the near future.
Singapore followed the UK approach in regulation. But the authority in Singapore did not impose the heavy fines on the institutions for mis-selling. The situation is quite bad in Singapore and many consumers are offered bad products that gave them a poor return on their savings. What will Singapore do, now that they role model (UK) has found their approach to be a failure?
Tan Kin Lian
Subscribe to:
Posts (Atom)