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Many people ask how can they retire from work earlier and be financially comfortable like me? Of course, I tell them investing for income ha...

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"E-book" by AK

Second "e-book".

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Know what is good for us.

Sunday, March 17, 2013

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.

Related posts:
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.

9 comments:

temperament said...

Hi Ak,
i know long ago nobody looks after your money better than yourself. Besides, even you look after your own money, you should always be wary of people who proclaim to be able to look after your money better than yourself. Perhaps there are a few exceptional like WB and famous fund managers. But all this stocks or funds are beyond our class.

AK71 said...

Hi temperament,

I don't know if it is always true that the best fund manager for me is myself. ;p

I also have to question my own beliefs and my own methods from time to time...

Most certainly, I was a terrible fund manager in my early days as a know nothing investor. :(

temperament said...

Ha! Ha!
AK, oops! i actually want to say nobody cares about your money more than you care about your money.

Silly me, there are of course many people who can manage their money "better" than me or you

Dividend Warrior said...

Hi AK,

The instant I read "....he put his own money in REITs....", I burst out laughing non-stop for a good couple of minutes. My family members thought I had gone crazy. >_<"

This shows that the so-called agents seldom put their money where their mouths are.

But still.....damn funny must I say. If he told me that, I would have laughed into the phone receiver and said, "Yes! I also have lots of REITs!"

AK71 said...

Hi temperament,

Oh, I am sure there are many people who care about our money. They probably care more about our money than they care about us. ;p

Anyway, I am just indulging in a bit of word play. I know what you are trying to say. :)

AK71 said...

Hi DW,

The irony of it all.

I didn't want to prolong the tele-conversation. So, I didn't offer more information than necessary. Good riddance to bad rubbish. ;)

Ray said...

I seldom last 30 seconds for these calls.

AK71 said...

Hi Ray,

I used to cut the call off within 12 seconds. It was a magical 12 seconds... ;p

AK71 said...

"Speaking at the release of the MAS annual report, managing director Ravi Menon said a reason why consumers venture into unconventional and often risky products is that simple, lower-cost products are not easily available. He added that MAS will introduce a direct channel for consumers to buy insurance products. Such products will be cheaper as there is no need to pay for distribution costs."

Source:
http://www.channelnewsasia.com/news/business/singapore/mas-to-help-consumers/1280994.html

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