4 Things To Consider During Your Financial Review With Your Adviser

Think of these when doing your financial review

To ensure that you’re in the pink of health, you pay a visit to the doctor for a body checkup. The doctor makes a few notes, asks a few questions, and makes recommendations based on his/her observation. Analogously, a financial health checkup involves going to your financial adviser for a financial review. Financial reviews often get a bad rep for being an opportunity for financial advisers to sell more products. How would you know if you’re in the pink of financial health if you don’t do a checkup? In this article, fundMyLife proposes things to consider when you are doing your financial review with your financial adviser. Having these things in mind will help you maximize your session with your financial adviser.

#1 Updating your adviser on any short-term/long-term life changes

As cliched as it sounds, your financial needs do change over time. Typically, entering new life stages require a financial review because of cash-flow changes. For example, if you got into a relationship and are considering marriage, you will need to work with your adviser to come up with a plan for it. Another example is that you might want to start a business, which means your personal cash-flow will change. In short, as you proceed in life your goals will change as well. You are not the you from the year before – you’re wiser, smarter, and have more perspective than before.

It’s better to inform your financial adviser early, than to wait until it’s too late before informing him/her that you’re in financial trouble.

#2 What else do I need to watch out for/How can I do better?

Experienced financial advisers typically have clients who may experience the same life stage as you. As such, they are in the best position to prescribe not just financial advice, but life advice in general.

If you find yourself in want of more cash, a financial adviser can also sit down with you and examine how you’ve been spending. Furthermore, an outsider’s pair of eyes into your finances provides fresh perspective on how you’re spending your money. It’s hard to figure out where your money went, if you did not track it properly. You might also want to see if you’re on track to saving your emergency fund, for rainy days.

#3 How are my investments coming along?

If you’re a hands-off kind of person, it is all the more important that you ask about your investments when you are doing your financial review. Doing a regular financial review helps you keep a bird’s-eye view on whether your money is doing what it is supposed to be doing. If your returns are unsatisfactory, it’s a good time to get advice on where to allocate your money to next.

Note: for those who purchased investment-linked products, it is useful to look at your current sub-fund returns. If it’s performing well, all is good. However, if it isn’t, it might be time to choose another sub-fund. Another thing is to balance out your investment and protection components, since the protection component increases in cost over time. The worst thing about ILP is that sometimes you notice the signs too late and your returns have already disappeared.

#4 Am I on track to retirement?

In our previous article on retirement planning, we mentioned that the journey to retirement is fraught with many roadblocks. As such, it is important to identify existing roadblocks and anticipate future ones early. During your financial review, you should ask your financial adviser if you’re on track to retirement. You will probably need to review your current debts, e.g., credit card debts, loans, mortgage, etc, to identify any possible signs of danger.

Connect with fundMyLife financial advisers today!

We hope this article helped in setting a level of expectation when it comes to reviewing your finances with your financial adviser. And if all goes well, congratulations! Time to carry on for another year, and maintain your financial discipline.

What’s this? You don’t have a financial adviser yet?

Gosh, it’s time to connect with one! Worry not – fundMyLife has your back. You can connect with our panel of experienced and awesome financial advisers, curated by us. If you want to engage more financial advisers, or if you haven’t found the right one, why not consider advisers of fundMyLife? You can head on over to fundMyLife and ask our awesome financial advisers questions. Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

5 Expensive Mistakes People Make When Choosing A Financial Adviser

Mistakes people make when choosing a financial adviser

George is a kind man, who had many friends over the course of his life. Sometimes, they reappear suddenly to reconnect. And also enlighten him on the importance of financial planning. George, being the kind man that he is, supported them by purchasing products from these people, even though he didn’t need them. Over time, he realized he bought too many policies because each time he had a hard time saying no. Worse still, most of them eventually left the industry but he maintained his policies as he had spent a considerable sum on already. Those individuals are friends no longer, as George has come to resent them (but mostly himself). If this story sounds typical, it is. Engaging the right adviser is hard, and on the other hand engaging the wrong one is easy. In this article, fundMyLife reveals expensive mistakes people make when choosing a financial adviser.

#1 Choosing friends and family

One of the users of fundMyLife we spoke to admitted that he had bought over 5 insurance products to help a close relative to meet her targets. It’s quite a common phenomenon, to see someone purchase a plan just to help friends and/or family. While the intention to support them is understandable, bear in mind that these products that you purchase are long-term commitments. Sometimes, these commitments last longer than your relationship with these people. You should also purchase these products if and only if they benefit you in the long run, not the other way round.

On the flip side, because these people are your friends and family, you’re at a greater liberty to ask them really tough questions that you should be asking a potential adviser. For example, you are at a greater liberty to ask them what the commissions are, their plans to stay in this career, etc. We wrote a list of questions that you can ask your potential adviser. Choosing friends and family as an adviser because they are friends and family is one of the most common mistakes people make when choosing a financial adviser – do avoid that!

It is tough, but you must say no if the reasons for taking up a plan with them are not well-justified.

#2 Buying from a complete stranger

On the other spectrum of relationships, one of the common mistakes people make when choosing a financial adviser is engaging a stranger straightaway. Bear in mind, we’re not saying that buying from a complete stranger is bad. We’re saying buying from a complete stranger whom you do not have any information on is bad.

There are three usual ways to encounter a complete stranger that wants to sell you a financial product. Firstly, you may encounter one from roadshows in shopping malls and MRTs. Another way is to get messaged online randomly, be it via Facebook and Instagram. If you attend networking sessions often, you will also encounter advisers on the prowl to know more people/potential leads.

When you buy from a complete stranger, you will need time to ascertain whether the adviser is credible or otherwise. Ask this complete stranger for strong client referrals, or even better – the client’s contact. If he/she is doing a good job, the clients are more than willing to vouch for him/her.

Does it mean all strangers that you meet are bad? Not at all. We’ve seen amazing advisers opting for roadshows, as personal preference. It only means you should ask more questions when if you want to engage this particular adviser.

#3 Focusing too much on products

Products are but one half of the equation. Every company has its fair share of suitable and unsuitable products. As such, you should not be too fixated with getting a product over choosing a good adviser. Neither should any advisers that you engage. Be careful of advisers who are more interested to talk about their company’s products and features than understanding your finances, needs, and future goals.

Good advisers are knowledgeable about competing products, and can advise you accordingly based on your needs. The best ones may even recommend their friends in other companies, if you’re adamant about getting another company’s products.

#4 Letting their image of success blind you

One of the mistakes people make when choosing a financial adviser is choosing it based on their image of success
Standard starter pack for those who choose to flaunt their success on social media. Source: SGAG.

Scroll your social media, and you might see what the starter pack above is describing. Some advisers flaunt their success on social media in order to portray that they are successful. The idea behind that is that potential clients view an adviser’s success as a reflection of their expertise.

Chances are that an adviser you met talked about how he/she got into the Million Dollar Round Table (MDRT). Getting into the MDRT is a prestigious thing, but it only reflects the sales volume of him/her for the company. It does not indicate whether the adviser is good or otherwise for you. What you should be looking out for are industry certifications, such as Certified Financial Planner (CFP), estate planning certification, etc.

[HOT TIP] You might also want to ask about a different but often overlooked metric – persistency ratio. It’s a metric used to measure the performance of an adviser. It shows the total number of policies that an adviser retains during a period without the policies sold lapsing or losing the premium to other insurance companies. Good advisers have high persistency ratio (think >95%) because it means no clients cancel their policies, reflecting the quality of the advice that the adviser gives.

#5 Falling for sales tactics

Another one of the most common mistakes people make when choosing a financial adviser involves sales tactics. Giving free gifts to get a yes is an age-old tactic, where the adviser tries to get you to agree by dangling a carrot in front of you. It can be a voucher or a physical object. It is not worth saying yes to a product just because you’ll get a free gift from it. The mistake will cost way more than the voucher or gift you receive, in more ways than one.

Another tactic is the bait-and-switch tactic. The adviser piques your interest with a small, low-cost product at first. However, the conversation later switches to a different product altogether, one which is potentially more lucrative for him/her. Last tactic is one that involves talking repeatedly for a long period of time. Long talks will wear you down mentally and eventually you’d say yes when your willpower is low.

Financial planning begins with uncovering your needs, financial situation, and goals. Only with a clear understanding of where you are, and where you want to be in the future do products come into the picture, so falling for sales tactics is one of the worst mistakes you can make.

Connect with fundMyLife financial advisers today!

We hope this list of mistakes people make when choosing a financial adviser will help you avoid make the same mistakes again. It’s serious business, choosing the right financial advisers. You two are in it together for the long haul and as such it’s important to find the right adviser.

Where to find them? Worry not – fundMyLife has your back. You can connect with our panel of experienced and awesome financial advisers, curated by us. If you want to engage more financial advisers, or if you haven’t found the right one, why not consider advisers of fundMyLife? You can head on over to fundMyLife and ask our awesome financial advisers questions. Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

Want To Pick The Right Financial Adviser? Ask These 5 Questions (And A Bonus Tip)!

How to pick the right financial adviser?

If you had to pick someone to handle your finances, how would you assess whoever who comes your way? It’s tough, isn’t it? After all, you’d have to be sure this person is both competent and is in this for the long haul together with you. In this article, fundMyLife shares several questions that you can ask a potential adviser, to pick the right financial adviser. While it may not be 100% fool-proof, these questions will give you better insight into the potential adviser.

#1 “How Long Have You Been In The Business?”

The financial planning industry is notoriously competitive, and the turnover rate is high. As such, it’s important to determine whether the adviser you’re engaging intends to stay in the long run. The worst thing that can happen is when you want to file for insurance claims but your original adviser is nowhere to be found – leaving you in the dark. Does it mean all young advisers will quit on you? We’re not saying that, but an adviser of many years’ experience is definitely a better bet than someone who just finished his/her training and wants you to give him/her a chance to do your finances.

There are advantages and disadvantages of engaging a financial adviser who has been in the business for long. For one, an experienced adviser who is in the industry for a long time is not likely to quit any time soon. On top of that, an experienced adviser has probably met plenty of people with a profile similar to yours, making it easier to advise. On the other hand, there’s the age gap to consider and if the age gap is too large you two won’t “click”, or connect on an emotional level. Of course, if you don’t care about that then you can keep it strictly business-like and not discuss shared interests.

#2 “Can you tell me why you recommended this to me?”

On top of advising you on how you should do your finances, your potential financial adviser should also be educating you on his/her recommendations. This is so that you, the client, will have complete understanding of what you’re spending your money on monthly. Communication should be clear and transparent, and you should be confident that you know what you’re getting into.

Chances are the inexperienced advisers will regurgitate whatever they learned, and do not know any better than what they were taught.

#3 “Do you have referrals to your existing clients?”

There are various ways to assess whether the financial adviser you encounter is good. Firstly, the best way to assess is to ask someone else who engaged this adviser in the past. Secondly, financial advisers sometimes have their own Facebook pages or websites where you can get more information about them. You should look out for detailed reviews of how this adviser helped the reviewers. The good thing about Facebook is that if you’re bold enough, you can message these clients of the adviser to get more information.

#4 “What’s your experience in this area?”

Make sure he or she has the right experience and/or qualification to advise. For example, you’d want someone who is experienced in doing his/her own investments to advise you on investments. It will be good to engage someone who has advised other clients with similar profiles as yourself. If the adviser says he or she achieved a sales volume-based awards like the MDRT (Million Dollar Round Table) award, ask for other awards since sales volume is not an indication of expertise and experience.

#5 “Can I trust you?”

This is something you should ask yourself. Your inner voice is one of the most powerful forces. The financial adviser you engage will hopefully be with you for a long time. You would want someone whom you can trust along the way. You can also ask your potential adviser this question to see what he/she says. The good ones will be convincing. Whereas the untrustworthy ones may just stumble over themselves trying to convince you that they’re trustworthy.

Bonus: #6 “Are you doing anything else besides advising?”

At the risk of ruffling feathers of advisers who have side hustles, you should ask your potential advisers this. They should be 100% committed to helping you with your finances. And any other side hustles that they have serve to divide their attention from what matters the most – their clients and their relationships.

Ask fundMyLife financial questions today!

We hope this article is useful to you if you’re wondering what you can ask to pick the right financial advisers. If you don’t know who to ask or where to find amazing financial advisers, we got you.

If you want to engage more financial advisers, or if you haven’t found the right one, why not consider advisers of fundMyLife? You can head on over to fundMyLife and ask our awesome financial advisers questions. Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

Advisers’ Take: Biggest Misconceptions About Financial Advisers?

Advisers of fundMyLife share the biggest misconceptions about financial advisers

Financial advisers have an important job to do – plan your finances, provide advice on insurance and investments, etc. The best ones will be your lifelong friends as you move through different stages in your life. However, the bad ones are the ones that leave the strongest impressions on consumers – news, viral social media posts, angry word-of-mouth, etc. In fact, members of the public may have different ideas about who and what financial advisers are. In this article,  fundMyLife asks three of its financial advisers – Kennard Lee from AIA, Winifred Tan from Great Eastern, and Ryan Teo from AXA – about the biggest misconceptions about financial advisers.

Kennard Lee, AIA

Misconception #1: All advisers are the same

Consumers think that all advisers are the same. As such, they end up buying policies from friends and family. While relationship is important, it is more important to take into account the quality of the person providing the financial advice.

One of my clients bought several plans from her aunt. Upon finding out more information, I realized that she spends less than $200/month on insurance. It turned out that her combination of plans did not provide adequate coverage. For example, her hospitalization plan was at the lowest grade. She also purchased an endowment plan which she thought yielded 4%, but was only a projected yield as shown in the benefits illustration. I succeeded in redoing her plan and building a portfolio that best suited her. The financial planning jackpot is a friend or relative who is also competent at his/her job at advising. However, it is more important to choose someone who can advise well first and foremost.

People think that products are different across different insurance companies. But based on my calculations, the difference between insurance products of the same profile and type is only 5%. This means it’s never about the product. It is more about the adviser who is serving you and how much they care about your financial success. These advisers will always make sure your portfolio is never out of date, and make sure it is updated according to your life stage.

Misconception #2: Insurance agents can only sell insurance

Insurance agents are not just for selling insurance only, but also sell investment products. Competent agents will help their clients achieve good returns, and conversely those agents who are not as competent will achieve poor returns for his/her clients. Apart from being competent, good agents also truly cares for his/her clients as well.

My personal policy is to buy the same sub-funds that I recommend to my clients. By recommending what I myself use, I have skin in the game.

Misconception #3: Advisers from banks are the same as the ones from insurance companies

The products you purchase from an adviser from a bank is different from products you purchase from an adviser from an insurance company.

For example, purchasing a mutual fund from a bank is different from a investment-linked sub-fund. Consider this scenario: you purchase a $100k fund product from either a bank or an insurance company. The following day, a catastrophic financial event like the bankruptcy of  Lehman Brothers. The stock market collapses, and your $100k becomes $40k. The next day, you die of an accident. If you purchased the $100k fund from a bank (a mutual fund), your family will only receive the $40k. However, if you purchased the $100k fund from an insurance company (a investment-linked sub-fund), your family will receive $100k back. That’s a great safety net to have.

Winifred Tan, Great Eastern

Misconception #1: Financial advisers are the same as insurance agents

The financial planning industry has evolved since the past. With a population that is better educated, and a society that faces more problem that it did today, there’s a need to make sure that someone stands by you to help you.

Financial advisers are not just insurance agents, where we sell or take orders from clients. For us, we are qualified consultants – some even have Chartered [fML: professional bodies] or Masters – and know finance and insurance/investment related knowledge and applying them to your lives. We also know retirement planning, estate planning, tax planning, and we have advanced certifications in theses specialized areas!

Misconception #2: All financial advisers are the same

Regardless of the good or bad experience that you had with the advisers you met, there are so many different advisers out there that you should not generalize them. There are very good/responsible/ethical ones out there, and this is how you tell them apart.

Firstly, you usually know the good ones via referrals. Secondly, the good ones have good resume, experience, and qualifications that set them apart from others. Thirdly, advisers who conduct seminars and other forms of educational events are usually more credible.

Misconception #3: Advisers will sell me policies for their own gain

As mentioned, not all advisers are the same. There are very passionate ones who love to add value to their clients’  lives. The best ones are reliable, and clients love them and like to discuss not just financial issues but life issues as well.

Some advisers have better qualification like ChFC, Masters, CFP, etc, so they know matters that the members of the public do not. The number of years in the industry would show that if they are really the type to seek personal gain rather than clients’ interests.

Ryan Teo, AXA

Misconception #1: Clients should just leave everything to the adviser

When you have a financial adviser, you should not leave everything to them to handle. There are clients who let their adviser figure everything out by themselves without giving them enough information about themselves. Both parties should actively participate and play a role in the financial planning journey.

For example, you need to let the adviser know of any major changes in your life, such as marriage. Clients should also have a quantifiable goal to work towards, so that the adviser knows how to plot the route to get there. A lot of clients fear that if they reveal too much information, the adviser may sell them more things. This is detrimental to the client if he/she withholds information.

For investments, clients need to articulate the % returns that they want so that advisers can advise accordingly. There are clients who hand everything off to the adviser, but get upset when their expectations are not met because of a lack of communication. You have to help them help you by communicating your expectations. I suggest that clients and advisers engage each other quarterly to review the investments and discuss strategies.

Misconception #2: All advisers that you see in roadshows are bad

One of the biggest misconceptions about financial advisers is that only bad advisers go on roadshows. However, good ones still go for roadshows because it is one of the many ways to meet potential clients. In road shows, there’s a fear that advisers whom you meet will sell you a plan straightaway. But, the best ones will first take a look at your finances before doing anything else.

fundMyLife Summary

Hate them, love them, financial advisers are here to stay. We hope you learned about the biggest misconceptions about financial advisers, from the advisers themselves. In their own ways, all three advisers emphasized the fact that not all advisers are the same. It seems that the public tends to hold a single impression of advisers, which is wrong since individual adviser has their respective edge.

Kennard emphasized the importance of competence over familiar relationships when it comes to financial planning, i.e. pick a good planner over supporting a friend or family. He also makes the case for insurance agents being able to advise on investments and not just insurance since the best agents can obtain the best returns from investments because good agents care about their clients. Winifred talked about the difference between advisers, and shared some tips on how to find the best ones. Ryan noted that it takes two hands to clap and that clients must work closely with their advisers to reap most of the benefits of the advisers’ advice.

Ask fundMyLife financial questions today!

If you don’t know who to ask or where to find amazing financial advisers, we got you. If you want to engage more financial advisers, or if you haven’t found the right one, why not consider advisers of fundMyLife?

Intrigued about any of fundMyLife’s advisers in this article? You can connect with either Kennard Lee from AIA, Winifred Tan from Great Eastern, and Ryan Teo from AXA, just click on the link in their names and you can ask them questions directly from their profile pages. Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

Pros And Cons Of Getting Insurance From Just One Financial Adviser

Pros and cons of getting insurance from just one financial adviser

There is a saying, that “diversity is strength”. While this is true on many fronts, can we say the same financial planning and insurance? Throughout our lives, we inevitably meet a lot of financial advisers, and there is always a question of whether to engage more advisers. This is especially true when we move from one life stage to next. In this article, fundMyLife explores the pros and cons of having just one financial adviser for financial planning.

Pros of having just one financial adviser

#1 No need to repeat yourself

Having just one financial adviser, especially if he/she is great, is all you need. He/she understands all of your financial needs and advises on suitable products. In this case, you do not need to keep repeating your financial situation to different financial advisers – it can be repetitive and tiring. Furthermore, if you have just one financial adviser, you just need to update him/her in cases of changes in life stages, e.g., life stages, occupation, financial situation, etc.

Furthermore, if you have any private matters you do not wish to talk about often, it’s easier to have a single person to handle everything. The less people know, the better.

#2 No redundancy

While being under-insured is a big problem, being over-insured is also an issue that is less discussed. Being over-insured poses a problem because you’re paying more than you should, limiting cash flow for other purposes like investments. This happens commonly when you buy policies from multiple people, who are not aware of what existing policies you have. Typically, the policies you own sit in drawers, untouched for a while. This is worse when you get them for reasons other than personal, e.g., to “support” a friend or family who has gone into the financial planning industry.

By sticking to a single financial adviser, you avoid this possible redundancy. Speaking of being over-insured – you do not want to be in a situation where you’re more valuable dead than alive to your dependents.

#3 Single point of contact

Picture this: you bought a life insurance from A, health insurance from B, and a personal accident policy from C. After that, let’s say you get into trouble, e.g., accident, sickness, etc, you’d have to recall who can help you with your incident. During claims situation, you’d want a single person who has access to your entire insurance portfolio. The last thing you want to do when disaster strikes is needing to figure out handles which policy.

Cons of having just one financial adviser

#1 All eggs into one basket

While having a single point of contact is convenient and useful, it also exposes you to risks as well. For example, a common issue consumers face is their financial advisers leaving the industry. Your policies would become orphan policies, a term that refers to policies without any servicing adviser. At best, if your adviser is responsible, he/she refers you to a reliable colleague. At worst, you’re left hanging and when it is time to make claims you’d have to take extra steps to contact the representative the company assigned to you.

Another possible risk is that your adviser becomes unwell and has to take a break from his/her job. It would be a bad timing if you need to make your claims during their downtime.

#2 Limited range of products

Unless your financial adviser is from an independent financial advisory, your choice of plans depends on the company your adviser is from. As such, it might not be a bad idea to engage multiple advisers to obtain specific products from different companies. With apps such as PolicyPal, IOLO, and TrueCover, it’s much easier nowadays to keep track of all your policies.

However, this does not imply that sticking to one company’s products is a bad thing. Products are competitive across the board. Most of the time, the differentiating factors lie usually in gimmicks. For example, wellness programs like AIA Vitality, or partnerships between Prudential and genetic testing company MyDNA. On a related note, the debate of tied adviser vs independent financial adviser is a completely separate issue, which we will explore another time.

Ask fundMyLife financial questions today!

With this article, we hope that you have a better idea of how having just one financial adviser can be a boon or bane. However, no matter whether it’s just one financial adviser that you engage, or several of them for different products, it’s definitely way more important to have the ones you can trust.

If you want to engage more financial advisers, or if you haven’t found the right one, why not consider advisers of fundMyLife? You can head on over to fundMyLife and ask our pool of financial advisers questions. Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

Ask fML Advisers: What Are The Most Common Questions On Personal Accident Plans?

fundMyLife FAs talk about common questions on personal accident plans

[5 min read]

A personal accident plan is a plan that pays out when you are injured, resulting in either death or permanent/temporary disabilities. While it is seemingly simple, there are many considerations to keep in mind when deciding what plans to purchase. As such, there are plenty of questions on personal accident plans.

Where better to hear about these questions and get answers, other than asking financial adviser themselves? We ask the financial advisers of fundMyLife on what they are often asked when it comes to this plan. In this article, Roshan Belani from AIA, Winifred Tan, and Melvin Liu from Manulife share their thoughts on common questions on personal accident plans and their perspectives.

Roshan Belani, AIA

Roshan from AIA
Roshan Belani, AIA

Before I share the most common questions on personal accident plans that clients ask me, I would like to share a personal accident claims story of my own. I was in a team bonding trip in Desaru with my colleagues, and in one of the games I fell. The fall did not hurt me, but two colleagues landing on my foot did. A colleague sent me back to Singapore, where I sought treatment in Mount Elizabeth hospital.

I suffered a hairline fracture in my 4th metatarsal but I did not stay in a ward since I did not need to undergo surgery. In total, I paid around $3,000 for:

  1. MRI scans
  2. X-ray imaging
  3. Digital imaging
  4. Follow-up treatment
  5. Crutches

The Great Eastern Personal Accident Plan helped in defraying the treatment costs. I was out of action for 2-3 months, during which I had to was fortunate enough to have my colleagues’ help with my clients. In retrospect, I would have gotten a plan that provided a weekly payout during the period when I was unable to work. A plan with a weekly payout as a result of lost income would have helped with lifestyle maintenance.

“Is my accident plan on an annual basis or per accident basis?”

This is a question that clients often ask, that whether the accident plan they purchase is on an annual basis or per accident basis. The Great Eastern plan I was on when I was injured in the team bonding exercise had a $10,000/year cover. In contrast, the personal accident plan in AIA has a $4,000/accident cover. As such, the question might arise on which plan is better than the other.

Neither are better than the other – it just depends on your own injury patterns. Ideally, you should have both as these two forms of personal accident plans as these two kinds complement each other. A per-annual basis plan helps to cover what a per-accident basis plan cannot. After all, personal accident plans are generally affordable and are designed to not hurt your budget. However, if you have to choose between either, you have to decide whether you’re clumsy or accident-prone. It would be more beneficial if you anticipate frequent injuries.

Winifred Tan

Winifred Tan, Great Eastern
Winifred Tan

“What’s the coverage like?”

Most people have the impression that personal accident plans are for serious things like car crashes or loss of certain body parts, etc. However, it also covers for temporary injuries like sprains and cuts.

“Does it cover medical expenses?”

Yes, even for Traditional Chinese Medicine (TCM), chiropractor for some policies under Great Eastern.

“Does it cover dengue and zika?”

Yes, for Great Eastern’s case.

“What kind of accidents are considered accidents?”

Anything that is external, violent, and visible means and are not self-inflicted.

“What are the common exclusions?”

Personal accident plans typically exclude jobs such as sports coaching, military, professional motorcycling. Why? It’s because they take on higher risks! Accident plans are not to be take for granted. It requires you to take precautions as well before going ahead with dangerous activities.

“How long does it take to claim?”

2-3 weeks, if everything – documents in general – is furnished in order for claims.

“What is the claim period from the date of accident?”

Within 90 days after the accident, and normally we allow follow-up claims up to 365 days form the accident.

Melvin Liu, Manulife

Melvin Liu's picture
Melvin Liu, Manulife

“Is personal accident plan the same as life insurance, etc?”

There are two groups of people when it comes to personal accident plans. The first are people who know what they want and why they are getting this plan. The second group of people are relatively more clueless, and confuse personal accident plans with other plans. Personal accident plans are useful because they complement other insurance plans for out-patient treatment and consultation.

“Is it useful to renew the personal accident plan?”

People ask this because they need to renew the plan annually even though they did not claim anything. I would encourage them to do so, since the premiums are affordable and it is truly useful when they need to claim for something. Even I myself have a personal accident plan for my own daughter.

I notice that consumers often do not have questions about personal accident plans, and are receptive to whatever I share with them.

fundMyLife Summary

Roshan first recounted a story on how he got hurt, and how his personal accident plan helped. He also discussed the differences between plans that have an annual limit, and plans that have a limit per accident. Winifred shared common questions on personal accident plans that she encountered with consumers, and provided useful clarification for each of those questions. Finally, Melvin mentioned a common misconception that consumers often have – mistaking personal accident plans with other plans – and encouraged yearly renewal of the plan due to benefits.

In general, from our conversation with some of the advisers, we had an impression that consumers ask many questions on personal accident plans. In addition, they commented that consumers often reply on their company’s group accident plans and do not scrutinize the details unless they need to claim for something.

Actionables:

  1. For freelancers, consider getting a personal accident plan as it will immensely help you when you injure yourself.
  2. If you have a corporate group personal accident plan, read the fine print and see if you have adequate coverage.

If you’ve more questions on personal accident plans or any other insurance plans, head on to our main site and ask our curated pool of financial advisers! Alternatively, if you’d like to connect with either Roshan Belani from AIA, Winifred Tan, or Melvin Liu from Manulife, just click on the link in their names and you can ask them questions directly from their profile pages.

fundMyLife is a platform that aims to empower Singaporeans to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

fML Case Study: Aligning Expectations With The Right Financial Advice

fundmylifestories

[3 min read]

Sometimes, getting professional financial advice can be tough – it requires the right expertise, the right experience, and most importantly the right adviser him/herself. Without any of the three, things may go awry when financial goals are not achieved, which does happen.

In this article, fundMyLife follows fML user James* who asked a burning question on our site on an AIA plan. Our AI engine connected his question with one of our fML advisers, Roshan Belani of AIA. After connecting with Roshan on fundMyLife, James and Roshan met up for an appointment. Roshan first spent some time acquainted with James on their first meeting, and they bonded over investing – something that Roshan is an expert of.

Unmet expectations in plan bought

Upon conversing, Roshan discovered that James’ initial goal was to accrue a set amount of savings for a particular financial goal. However, the plan which he was sold by another adviser turned out to be an ILP, and was unsuitable for two reasons:

  1. The plan protected him more than he needed
  2. The premiums he paid in the first two years went to protection first, instead of investments

The plan was not going to deliver what he wanted – savings – in the long term as a large chunk of the premium went to insurance component. As such, his goal was unmet. The initial premium was $500/month, which he reduced to $300/month in the past already.

Weighing the options

James was faced with a dilemma:

  1. Keep the plan going and not reduce the premium
  2. Reduce the premium to $100/month and free up more money for investments

Roshan noted that each of the options had their pros and cons. While the plan wasn’t what James originally wanted, the protection offered by the plan under $300/month was adequate and sustainable. Furthermore, the plan served a purpose by locking down on his health from two years ago – future insurance plans may be slightly more expensive. On top of that, reducing it to $100/month would also result in less insurance coverage. However, the second option provides James with more freedom to do with what he wants to do with the money.

In addition, Roshan also looked at other areas of James’ risk management and gave his perspective on those as well. For example, critical illness coverage, personal accident plans, etc. Impressed by Roshan’s professionalism and expertise, James immediately requested for Roshan to take over his AIA portfolio. Currently, it is an ongoing conversation where Roshan will further assess James’ future needs and identify gaps in finances be it investments or insurance.

Conclusion

It is important to engage the advisers who can give the right financial advice. James found himself in a quandary when the plan he bought did not align with his goals due to unsuitable advice. fundMyLife was pleased to have been able to connect the question James had to Roshan and we are committed to making sure more users like James have access to the right financial advice, by the right financial adviser.

If you find yourself in the same situation as James, or you’ve questions on financial planning, head on to our main site and ask our curated pool of financial advisers! Alternatively, you can also browse our individual advisers’ pages – just click on their profiles and you can ask them questions directly from their profile pages.

fundMyLife is a platform that aims to empower Singaporeans to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

*name was altered for privacy

Ask fML Advisers: What Are Your Opinions on Endowment Plans?

[5 min read]

Usually marketed as a form of “forced savings”, endowment plans are long-term plans designed to help you achieve a certain financial goal over a time period. We have written at length on endowment plans, and what to do if you ever think of selling them. However, while we hear a lot of stories from friends and family about endowment plans, what do financial advisers themselves think?

In this article, we asked three financial advisers of fundMyLife – Melvin from Manulife, Jonathon from Prudential, and Ryan from AXA – on what they think of endowment plans, such as interesting case studies and common misconceptions. Without further ado, here’s what they have to say:

Melvin Liu, Manulife

Melvin Liu's picture
Melvin Liu, Manulife

What is your opinion on endowment plans?

At least half of the people I encountered have the general impression that the returns are guaranteed, that they are safe and likely to hit the projected returns. They forgot that they were told that the projections are not guaranteed, only to remember when I reminded them.

When I look at endowment plans, I study three things:

  1. Guaranteed Cash Values/Projected Yield to Maturity
  2. Liquidity/coupon paying features
  3. Intention and suitability of clients for considering endowments as an option

In general, I noticed that endowment plans have evolved over the past five years and not all endowments are the same since each may differ in features such as premium-paying periods, liquidity options and protection features. The plans nowadays are competitive and the guaranteed amount upon maturity aims to be on par if not higher than total premiums paid.

My personal opinion is that people really need to understand why they are purchasing endowments in the first place. In addition, people generally should not plan to withdraw cash benefits (where applicable) from their endowment plan before maturity, unless its necessary.

What are some interesting stories that you’d like to share with us? 

There were two cases I was involved in.

In the first case, it involved a 21-year old lady who was seeking my advice on an endowment plan she recently purchased which she was having 2nd thoughts about her choice. She was contributing a substantial amount of her monthly income, i.e. $750/month, to a 25-year premium paying endowment plan. She got this particular endowment plan from someone she met at a roadshow. Moreover, she was a Malaysian working in Singapore, and having to sustain her premiums for a good 25 years here might sound challenging due to many potential uncertainties, to which she agreed. After consideration, she deliberated between keeping it for another 2 years or so when she could surrender it to take back some cash, or to surrender it straightaway after paying for about 6 months. I showed her objectively the difference in the amount she would lose if she hung on for another 2 years vs surrendering immediately, i.e. $16k+ vs $4.5k respectively, and let her make the call. She eventually managed to resolve it with the agent, and I didn’t probe further on her decision.

In the second case, I was advising a 50-year old lady on her plan to have a regular stream of income in about 2 years time for her retirement. She was surprised that I advised her that she did not need any plans after I reviewed and advised that she was ready to retire with the sum of money she already had. However, she nonetheless was keen to see what options she had to put her in a better financial position while meeting her income needs with a lower risk. We worked out a few options and suggested that she could prepaid an endowment plan in a lump sum so that she can start getting guaranteed cash coupons as retirement income from the second year onwards while maintaining her desired lump sum balance for security and/or legacy.

Endowments are generally more suited for those who wish to take on a lower risk, prefer having a guaranteed cash value component and have a specific time period to save and cash out for their needs.

However, endowments are often promoted also because they are easy to sell and easily positioned as forced savings e.g., for young adults who are starting to work. Like any financial plan, endowments should be recommended as an option only if it meets the client’s needs and not just simply a way to save money.

Jonathon Han, Prudential

Jonathon Han's picture
Jonathon Han, Prudential

What is your opinion on endowment plans?

A major misconception that people have regarding endowment plans is that they think that these plans are lousy. People often compare endowments with investments, which is like comparing apples with oranges – they are different asset classes with different risk categories.

Endowments are good to grow money at a secure rate for timed events, for example an education fund for children or a retirement fund. If you choose to invest in the stock market instead, the time horizon involved, e.g., 20 years, means that you risk a situation where you disappoint your children because the markets are not doing well.

Important point: besides using endowments for retirement and children’s education, it can also be used to build capital towards buying a second property. The advantage of using endowments over investments is that endowments are less susceptible to market fluctuations. On the other hand, property prices and the stock market are correlated; in the event of a market downturn, both stock and property prices fall which defeats the purpose of investing for a second property in the first place.

The second major misconception is that endowments have poor returns. The perceived low rate of returns is due to the financial adviser allocating too much percentage of the premiums to protection instead of investments. Ideally, you should find someone who can advise and allocate the investment-protection proportion correctly. In fact, it is possible that certain endowment plans can beat Singapore Savings Bond and fixed deposits.

Currently, most insurance companies have endowment plans where you can withdraw money after 2 years. However, if you choose to withdraw the money instead of re-investing for further compounding, the returns might be much lower at maturity. As such, I advise clients to take up fixed endowments but pay less premiums for a relatively higher rate of return compared to those cashback endowment plans.

The third misconception is a lot of practitioners introduce the projected 4.75% investment rate you see in the Benefits Illustration as interest, THIS IS NOT ACCURATE. The effective annual interest rate is also something consumers might find it hard to calculate unless they have an access to a financial calculator.

What are your thoughts on picking a good endowment plan?

I believe 80% of people who buy endowments are happy because they serve a good purpose for their needs. Please note that not all endowments are designed to be withdrawal before their maturity. There might be a serious misconception among customer who buy endowment plans from banks that these endowment plans are fully liquid, please bear in mind that endowment plans are never as liquid as compared to your current account.

Secondly, it is important to study the performance of the insurance companies selling the endowment. Endowments are paid of out a participating fund and if it does well, insurance companies have more funds to allocate to policyholders, i.e. 90% surplus to policyholders and 10% to shareholders. As such, it is useful to pick major insurance companies with good track-record of participating funds – you find the information online. Note: past performance is not indicator of future outcomes.

Lastly, decide whether you want the endowment plan to be fixed or flexible. Don’t ask for flexibility unless you need it since it reduces returns in the long term. You should decide also if you need to add on riders for the protection component. However, keep in mind that the cash value of the protection does not increase over time.

Ryan Teo, AXA

Ryan Teo's picture
Ryan Teo, AXA

What is your opinion on endowment plans?

People often have the misconception that the returns are guaranteed. Another misconception that people have is that they mistake returns in the Benefits Illustration with interest rate which are two completely different things.

In general, endowments are pretty standardised. I take into account the length of the policy when it comes to endowments. What I advise people looking into savings plans but have concerns about liquidity, is to invest 1/3 of their funds into the Singapore Savings Bond and the remainder into an endowment plan. This arrangement provides liquidity.

Endowments generally have a trade-off between returns and flexibility. For example, for plans with cashback, the total maturity may be higher but guaranteed sum may be lower than premiums paid.

A thing to take note: inflation should be considered when it comes to endowment plans. At the break-even point, i.e. the point where the surrender value is the same as premiums paid, the duration of the plan also implies that technically the consumer loses a bit of money due to inflation.

fundMyLife Summary

The major misconception that the public have for endowment is that the sum assured is, well, 100% assured. The advisers caution the importance of understanding what you’re in for when it comes to endowments and know exactly why you’re getting what you’re getting.

Melvin shared what he looks for in endowment plans and recounted two interesting client stories – one who benefits from getting an endowment and the other, not so. Jonathon listed three major misconceptions that the consumers have regarding endowments and provides his thoughts on picking a suitable endowment. Finally, Ryan Teo noted the tradeoffs when it comes to flexibility and returns in endowment plans.

If you’ve more questions on endowment or any other insurance plans, head on to our main site and ask our curated pool of financial advisers! Alternatively, if you’d like to connect with either Melvin from Manulife, Jonathon from Prudential, or Ryan from AXA, just click on the link in their names and you can ask them questions directly from their profile pages.

fundMyLife is a platform that aims to empower Singaporeans to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

Ask fML Advisers: What Are Your Opinions On Critical Illness?

Critical illness insurance can be a lifesaver, since you are paid a lump sum if you are diagnosed with any of the 37 critical illnesses. We have written quite a bit of this topic, but why not hear it from the advisers themselves?

We asked three advisers of fundMyLife (check out their profiles!) – Jennifer from Manulife, Roshan from AIA, and Winifred – on their thoughts regarding critical illness insurance and what they think are common misconceptions. Here’s what they have to say.

Jennifer Neo, Manulife

Jennifer Neo's picture
Jennifer Neo, Manulife

What are your thoughts and perspectives on critical illness insurance?

In the past, I took up two orphan clients – clients without a servicing adviser – referred to me by a friend from a different company. They owned two plans: Living Choice and Universal Care, taken up in 1997. 20 years later, in 2017, the wife was diagnosed with Parkinson’s disease, a long-term degenerative disorder of the central nervous system that mainly affects the motor system. It could reach a stage of paralysis where the legs are stiff frozen, limiting mobility.

At the time of her claim, she was a 53-year old housewife. She was mentally shaken but physically she was still fine. Naturally, one would be worried or scared after knowing what the stages of this sickness are and how it could eventually cause difficulties, such as swallowing and even talking or expressing herself. At this point, when one is physically disabled, he/she would need a caregiver to assist in their daily living.

The couple was very thankful that I helped them in the process of checking the claims status. I could sense their gratitude, expressed in simple terms of gifting me a box of CNY biscuits and angpao as it was during CNY period last year.

For critical illness, you should buy it when you don’t need it, so that when you need it, you will have it. When you are young, you should prepare whenever you can. When you take responsibility for yourself in your younger days, your dependents will be free from the financial responsibility of taking care of your medical bills. Otherwise, they might be the one shouldering the bills on top of supporting themselves.

I would urge young adults to think and look into your critical illness coverage. For example, do you have $50,000 in your bank account? If you don’t, it’s a good time to look into covering yourself with a critical illness plan that can cover you with a lump sum to take care of yourself when the critical illnesses strike.

Two facts to share:

  1. When you buy it at your younger age, you pay lesser! And most likely you would have the good health to buy it. There is a cost of waiting –the older you are, the higher the premiums will be.
  2. And the second cost is there is no guarantee of coverage. A health issue could strike any time leaving you not being eligible for coverage. Waiting just a few years to buy could result in not getting coverage at all. Don’t wait until your health changes because when that happens, the insurance companies might not want to take you on.

Roshan Belani, AIA Financial Advisers

Roshan from AIA
Roshan Belani, AIA

What are your thoughts and perspectives on critical illness insurance?

The wife of a good client of mine was diagnosed with Stage II cancer. The client’s family was quite big, with 4 daughters. Fortunately, they had a hospitalization plan that covered most of the medical fees and an early critical illness plan that provided a lump sum payout. While the wife of the client was a stay-at-home mother, they came to know of an experimental drug that was being used in a clinical trial. Experimental drugs are usually not covered by hospitalization plans.

The cost of the drugs for the entire duration of the treatment was between SGD$150-200,000. The family was willing to fork out the money as the lump sum from the early critical illness plan was able to defray some of the costs – they later found out that this drug was indeed covered by insurance, providing much relief to them and their finances. In this case, the early critical illness payout worked as a peace of mind to engage costly treatment.

One misconception that I’d like to address is that people think that critical illness plans are just for working adults. However, it is not meant to be an income replacement. After all, someone has to bear the costs of medical treatment and aftercare in the household. In the client’s family that I shared above, if the drugs were not covered by MOH, the cost of the treatment would have put a huge dent in their financial plans – retirement plans, investments, and even the education for the four daughters.

Fortunately, the wife is currently receiving treatment and is getting better day after day.

Winifred Tan

Winifred Tan, Great Eastern
Winifred Tan

What are your thoughts and perspectives on critical illness insurance?

Over the years, I have observed that underwriters are quite strict. Even if the applicant is young and has not been diagnosed with any of the 37 critical illnesses, he has a chance of exclusion or extra loading (higher premiums) if there is any prior medical history. A few things that I’d like to share:

  1. Terminal illness coverage refers to a conclusive diagnosis of an illness that is expected to result in death within 12 months
  2. HIV infection is usually excluded, whereas occupationally derived HIV is covered in our hospital plans
  3. Diabetes is NOT considered a critical illness, but diabetic complications are considered
  4. Critical illness (CI) usually covers 37 conditions for later stages unless the policy is a specific early stage policy. Normally, early stage CI covers about 29 illnesses
  5. There may be a maximum amount payable for CI on all policies e.g. $2.5M
  6. Angioplasty & other invasive treatment for coronary artery do not pay out 100% of the sum assured (SA). Usually only 10% of SA
  7. Waiting Period: CI coverage usually needs a waiting period of 90 days from the day of purchase BEFORE any claims can be made (which is why it’s one of the first core components of insurance that people usually get for themselves and loved ones)
  8. Survival Period: A claimant must usually live beyond 7 days, which is also the survival period, for a CI policy to pay out (regardless of early or major stage CI coverage)

In addition, people often confuse critical illness plans with hospitalization insurance! They think it pays out for hospitalization, but it is not. Normally, I’d say that hospitalization insurance as “reimbursement of bills” and CI insurance as a complement to hospital insurance for income replacement! People also think that critical insurance looks “critical”, that is the illnesses are too major/serious to get it at a young age. That’s because they do not know about early CI as well.

fundMyLife Summary

The misconceptions that the public generally have is that critical illness plans are seen as income replacements, which should not be the case. Instead, they advise us to view the plan as a form of illness aftercare, when we need the resources to recover.

Jennifer advocated to start buying a critical illness plan early because firstly it’s cheaper and secondly there’s no telling when the consumer may not be eligible for it. Furthermore, critical illness plans can be seen as a way to reduce financial burden of recovery. Roshan’s story about his client’s wife agrees with that sentiment and he said that there’s always going to be someone in the household to bear the costs of treatment. Winifred shares important facts that one needs to consider when purchasing critical illness insurance, e.g., possibility of exclusion due to family history, survival period, waiting period, etc.

If you’ve more questions on insurance, head on to our main site and ask our curated pool of financial advisers! Alternatively, if you’d like to connect with either Jennifer from Manulife, Roshan from AIA, and Winifred, just click on the link in their names and you can ask them questions directly from their profile pages.

fundMyLife is a platform that aims to empower Singaporeans to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

3 Ways A Relationship Can Sour in Professional Financial Planning

Purchasing insurance can be quite a scary affair. After all, you’re putting a part of your hard-earned money into protecting yourself from an event that may or may not occur.

Given the fact that clients and their financial planners have to maintain this professional relationship over a long time, it is inevitable that there is a chance that the relationship can sour. How so? fundMyLife explores various ways how things can go awry in client-planner relationships.

Financial Planner Quits

It’s hard being a financial planner in Singapore. Turnover rates are extremely high because of the sales-oriented nature of the job. Apart from the general public’s wariness of financial planners, it’s also quite demoralising to see a low salary for the initial part of the career.

In our own data analysis of LinkedIn profiles and personal accounts from our network of friends, attrition rates are the highest in the first two years. What does this mean for the consumer? It’s a classic story for a client to purchase a policy from someone, e.g., a friend fresh in the industry, and the friend happens to quit afterwards.

In such a case, the client is then left hanging after the company assigns him/her random planner. It is understandable why adopter planners are hesitant to take up orphaned clients. There is little incentive in servicing clients whom you do not earn commissions from. However, it is also heartening to find that there are planners out there who choose to take these orphaned clients out of duty to their calling.

In addition, unless the adopted client makes the effort to contact the assigned planner, the next time he/she requires the help of a planner it’d most likely be when it’s time to make claims. It’s a pain for both the consumer and the financial planner as both would be meeting under times of crisis, e.g., an accident or illness.

Financial Planner Goes to Another Company

Good financial planners are hard to find, and talent recruitment can be quite aggressive. In June 2016, 200 out of 400 financial planners from the Peter Tan Organisation – one of Prudential’s largest group of agency units – resigned, with a group of them joining Aviva’s financial advisory firm. In Sept 2017, around 300 financial planners from Great Eastern joined AIA Financial Advisers.

Under such cases, either of the two things can occur. The first case is the same as a client’s personal financial planner quitting, i.e. be assigned another financial planner from the company. The second case – various government and consumer bodies have expressed this concern – is when the jumpshippers convincing their clients to drop their original plans from the old company and buy new ones from the jumpshippers in their new companies to fulfill their quota.

Bank-Insurer Relationship Ends

Ever received a call from your bank, asking if you were interested in their insurance? That’s bank insurance, or bancassurance, right there.

In theory, bancassurance is not a bad idea. After all, you get both banking and insurance done at the same time. However, what happens when the partnership ends? A member in the Insurance Discussion Group, Chan KH, commented that in these partnerships the bank acts as an agent. The banks work as distribution channels in this partnership, offering bank clients insurance products as well.

Once the partnership ends, the insurer will then take over the portfolio of business servicing from the banks and assign the client to an agency or a group of financial planners. He also recounted how his own client messaged him about a Prudential plan he bought via Maybank in the past; it was not performing, but since the partnership ended the client had to call Prudential itself to inquire more.

Is it all terrible? Not exactly. Especially if you don’t sweat the details and would like to get all of your finances done at the same time. In addition, banks like DBS are getting innovative; DBS incentivizes consumers to purchase/transact their insurance under the DBS Multiplier account to enjoy higher interest rates (we wrote an analysis on it, btw).

You just have to be prepared to be on your own after the bancassurance partnership ends.

What Should I Do As A Client?

If you find yourself under such cases, the best thing you can do is make sure you make contact with the person who is in charge of you as early as possible. Responsible planners, upon leaving the company or industry, will do a proper handoff to the assigned planners. However, in the case of sudden disappearance of planners, your best bet is to contact the main companies’ offices to find out who your assigned planner is.

Hindsight is 20/20, but for those who haven’t found a financial planner yet, it’s important to engage someone whom you know will stay in the industry for a long period of time. Where to find such responsible planners?

At the risk of tooting our own horns, fundMyLife takes pride in conducting numerous quality control measures to ensure that the financial planners that join us are capable, credible, and client-oriented.

If you find yourself in a rut or have a burning financial planning question, come to our site and ask away!

fundMyLife is a platform that aims to empower Singaporeans to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.