Some financial advisers are worried that the changes being considered by the Financial Advisory Industry Review (FAIR) might lead to a severe drop of their earnings.
There is a silver lining.
I hope that the outcome of the review will allow the financial advisers to play a more constructive role in helping the public to better manage their financial planning and to get a better yield on their savings. This would require the finance ministry and MAS to recognize the importance of tax incentives to get people to make additional savings for their retirement - which is much needed in Singapore today, due to inadequacy of the Central Provident Fund.
In many countries in the developed world, the tax regime is skewed to encourage the people to make additional savings for retirement, such as the 401(k) in the USA or the superannuation schemes in Australia. They usually take the form of deferral of tax to a future date.
If similar incentives are allowed in Singapore, the potential savings in tax to the consumer can more than offset the remuneration paid to the financial adviser. It achieves an outcome that is good for consumers and allows the advisers to earn a living by performing a useful role for which they have been trained. The government benefits when more people make adequate personal savings for retirement and rely less on state welfare.
The financial advisers can put up a case for the review panel to recommend tax incentives for long term savings in life insurance. This will allow financial advisers to find a new role and reduce their fear of loss of earnings arising from the likely changes in the remuneration structure.
Tan Kin Lian
There is a silver lining.
I hope that the outcome of the review will allow the financial advisers to play a more constructive role in helping the public to better manage their financial planning and to get a better yield on their savings. This would require the finance ministry and MAS to recognize the importance of tax incentives to get people to make additional savings for their retirement - which is much needed in Singapore today, due to inadequacy of the Central Provident Fund.
In many countries in the developed world, the tax regime is skewed to encourage the people to make additional savings for retirement, such as the 401(k) in the USA or the superannuation schemes in Australia. They usually take the form of deferral of tax to a future date.
If similar incentives are allowed in Singapore, the potential savings in tax to the consumer can more than offset the remuneration paid to the financial adviser. It achieves an outcome that is good for consumers and allows the advisers to earn a living by performing a useful role for which they have been trained. The government benefits when more people make adequate personal savings for retirement and rely less on state welfare.
The financial advisers can put up a case for the review panel to recommend tax incentives for long term savings in life insurance. This will allow financial advisers to find a new role and reduce their fear of loss of earnings arising from the likely changes in the remuneration structure.
Tan Kin Lian
:.
0 comments:
Post a Comment