I was reading the weekend edition of The Business Times and read an article which mentioned a survey done by the Monetary Authority of Singapore more than a year ago on banks and insurance companies. It was found that:
1. 50% of investors were not asked about their financial objectives or risk tolerance.
2. 48% of investors were not informed of fees and charges.
3. 40% of investors were not asked about their investment experience.
4. 30% of products recommended to investors were not suitable for them.
Have things changed? I very much doubt it.
Why do I say this? I still receive cold calls from insurance companies and tele-marketers, representing banks, promoting insurance and investment products. Usually, these callers would launch right into why a product had good features, good potential returns and was good value for money.
A call I just received last week from an insurance agent whom I don't know from Adam was a good example of this. The caller did not even make an effort to understand me as a client. He simply made certain assumptions. Although I was unusually patient with him, I finally told him that I would tell him what I was looking for in a product and if he had anything which met my requirements, let me know.
To his credit, before he put down the phone, he honestly told me that he put his own money in REITs. I guess he realised that there wasn't a chance that I would buy any of the products he proposed to me. Revelation!
Before we buy anything, we have to make sure that it is good for us and how do we know if it is good for us? We have to ask the right questions because we cannot depend purely on the goodness of others to do this for us.
1. Inflation adjusted retirement income plan.
2. Enhanced Incomeshield (H&S) for my mom.
3. A banker's advice on retirement income strategy.
4. Why a wealthy nation cannot afford to retire?
5. Build a bigger retirement fund with CPF-SA.