How to go on strike

http://singaporemind.blogspot.sg/2012/12/recent-strike-action-through-kids-eyes.html

To punish or not to punish?

For those who insist on harsh punishment to the 4 SMRT drivers, let me share this story with you.

Forty years ago, I was driving at 90 kpm on a motorway in the UK. A police car stopped me. The policeman said, “Sir, do you know that you are exceeding the speed limit?”

I replied, “Sorry, I thought that there was no speed limit on the motorway.”

He said, “Sir, you are wrong. There is a speed limit of 65 kpm. As you are a visitor to our country, do be aware of our law when you drive along our roads”. He did not book me.

For the rest of my life, I know what is a civilized, considerate and fair society.

If he had fined me, I would have paid the fine, and would not feel that this have the same respect for that society. If I had been sent to jail, I would probably hated that society and their people, for mistreating other people.

So, to those narrow minded and bigoted fellow citizens (which I hope is the minority), reflect on this carefully. Yes, you want to enforce your law harshly, including laws that are unjust. When you are go to another country and are sent to jail for a law that you are not aware of, you should not expect to be treated with compassion.

You will face another risk. For people who were badly treated in Singapore, they and their friends will hate us. When you meet them in other countries, be careful and be ready to face their hatred and retaliation.

Better stay in your own country, where you can be safe

Do not show the ugly side of Singaporeans

Many Singaporeans have expressed their anger and hatred of foreigners working in Singapore. This hatred is especially directed to the foreign workers from China. The recent "strike" by the SMRT drivers has given them the opportunity to vent their anger again.

I like to ask these Singaporeans to consider the following points:

a) The words that they use, and the manner of their expression, reflect badly on their personal character and show them to be narrow minded, uncivilized and acting like hooligans.

b) Their manners and hate mongering reflect badly on Singaporeans in general

c)  If we hate other people, we should be aware that other people can also hate us. Just watch the internet websites of other countries to see their opinion of Singapore and our people.

d) The number of people who hate us can outnumber us by hundred of times.  Do we want to travel to other countries and meet people who have reasons to hate us, due to the way we treat their fellow men?

My request to fellow Singaporeans is to reflect on these points and be civilized in the manner that they express their views. Be considerate and respectful to other people. Build goodwill. Find reasons to like other people, rather than to hate them. Be helpful to other people, especially those who need our help.

I also ask other Singaporeans who agree with me, to come in and help to tell these rude people off. Do not stand by idly and be silent and allow them to show a bad image of Singaporeans to the world.

Personally, I do not like the big influx of foreign workers into our country, but the fault is with the policy of our Government. We should not vent our anger on the foreign workers; many of them have made sacrifice to come to Singapore; were misled about the wages and living conditions in Singapore and are now suffering as much as the local Singaporeans that they have displaced.

Tan Kin Lian

Arrest of SMRT bus drivers for instigating a strike

The authority decides to charge 4 SMRT bus drivers for instigating an illegal strike involving an essential service. http://www.channelnewsasia.com/stories/singaporelocalnews/view/1240133/1/.html

The Chinese embassy in Singapore has expressed concern about the arrest action being taken against their nationals working in Singapore. http://www.straitstimes.com/breaking-news/singapore/story/chinese-embassy-expresses-concern-about-arrests-four-smrt-bus-drivers-

This is likely to lead to a diplomatic row that could turn quite ugly, if it is not being handled properly. Here are the issues at stake:

1) There is a law involving an illegal strike and disruption of essential public service, which the Singapore authority has to enforce.

2) The 4 "instigators" could feel that they are expressing their grievance over pay and working conditions and unfair discrimination.

3) It is possible that many of the foreign bus drivers could have paid a large sum of money to come and work in Singapore. They probably found the cost of living and the terms of employment to be unsatisfactory and they are now stuck with these terms, and they have no avenues to express their grievance.  Their government would probably be required to take their side to protect their "human rights".

4) This incident could probably put the employment and other practices in Singapore in an unfavorable light, especially the weak bargaining position of not only the foreign workers, but the local workers as well. It would also show some of the laws in Singapore to be unjust.

5) It is probable that the 4 "instigators were initially not aware about the law in Singapore and have not been advised. It might be possible that they were warned and they did not care anyway, as they have "nothing more to lose".

Whatever is the situation, it will be difficult for the Singapore authority to enforce the law harshly, considering the circumstances. A better way is for the authority to get the help of the Chinese embassy to solve this issue. A good outcome is for these 4 "instigators" to be let off and even allowed to return home with passage given by the government or their embassy. After that, we will have to review our practices and some laws that are perceived to be unjust.

Tan Kin Lian

Population woes

I am surprised that PM Lee was not aware of the seriousness of the population woes. It has been getting from bad to worse over 25 years. The measures adopted during the previous Prime Minister and during his time did not work, but they refused to see the flaws in their policies.
http://singaporedesk.blogspot.sg/2012/11/no-country-for-old-men.html

Singapore shares, 23 Nov 2012

Here are the blue chips and REITS in Singapore, sorted by dividend yield.
http://tankinlian.com/admin/file.aspx?id=707&IID=711

The authority has a duty to perform

Some people have argued that the public should be alert and be careful of being cheated by crooks. We should not expect the Government to be able to stop all the crooks from operating.

I agree with this reasoning, up to a point. If  a crook has been going around to cheat people and and complaints have been lodged to the "authority", it is the DUTY of the "authority" to take pro-active measures to stop the crooks from continuing their operations, especially as their identity is already known. It is NOT ACCEPTABLE for the "authority" to sit by, do nothing and let other people be cheated by the same crooks.

There are so many cases where complaints were lodged, and the crooks were allowed to continue their operations for a few more years. In the process, more people were cheated.

I do not understand why some people want to speak on give excuses on behalf of the "authority" which is neglecting its duty.

SIA website

I booked for a ticket to go to KL on 4 Dec. The website keeps changing my departure date to 5 Dec. Fortunately, I spotted this mistake and did not proceed with the booking. I tried again and got the same mistake.

I suspect that this could be a browser issue and changed from Chrome to Internet Explorer. This time, it got the correct date. When I proceeded, it showed "Processing request" and continued there for a long time. The website probably hang.

I know that SIA website had been giving trouble a few months ago. I am surprised that they have still not resolved this issue after a long time. I sent my feedback to the had of the call center in Singapore Airlines.

Beware of another investment scam

Mr Low (not his real name) made an investment with an asset management company X with an office in Bencoolen Street. They promised him monthly dividend payments but the payment stopped after two months. He did not receive the payment due for the past three months.

The representative of X told him that the investee company in Kazakhstan was taken over by another company and had stopped making the payment. He refused to respond to further questions from Mr Low.

Mr Low told me that he came to know of X because they offered to buy over his time share investment of $28,000, provided he put in another sum into X to make a total investment of $60,000. 

This sounds like another investment scam. I checked the MAS Investor Alert List and found that the company was not listed there.

Fair dealing outcome

MAS encourages financial institutions to make a corporate statement about their goal to achieve "fair dealing outcomes" for their customers. Here is an example of a statement issued by Citibank,
http://www.ipb.citibank.com.sg/global_docs/pdf/fairdealings.pdf

Educate our children

There is a big difference in the approach towards education adopted by several countries and Singapore. Which system do you prefer?

http://www.tremeritus.com/2012/11/26/difference-between-finnish-education-system-and-ours/

PM Lee and Singapore

PM Lee said that it is not easy to get another group to make Singapore work.
http://www.tremeritus.com/2012/11/25/pm-lee-not-easy-to-put-together-another-group-to-make-sg-work/

The Government is made up of idiots

If you make this statement, you will not be sued.
http://www.tremeritus.com/2012/11/25/govt-wont-sue-you-if-you-say-it-is-made-up-of-idiots/

Negative aspect of Singapore system

This person wrote about the negative aspect of the Singapore system - where people in "the authority" neglect their duty and push responsibility from one agency to another. The root cause of the problem is not solved. http://www.tremeritus.com/2012/11/24/i-have-enough-of-singapore-system/

I agree with his views and have experienced this bad environment. The Government needs to "wake up", recognize this problem and find a solution. It is their duty. If they cannot carry out their duty, they should step down from the government.

PAP counter-insurgency strategy

Seah Cheang Nee wrote about the PAP counter-insurgency strategy in cyberspace. I have experienced this activity in my blog and Facebook. Several of the members of this group have been making attacks on me in a dishonest way. They just want to provide their propaganda, to argue for the sake of argument, rather than engage in an honest discussion.

http://www.tremeritus.com/2012/11/24/pap%E2%80%99s-quiet-counter-insurgency-in-the-cyberspace-front/

Presidential Election 2005

Read Siew Kum Hong's comments about the lack of contest in the Presidential Election 2005
http://mindbloggingstuff.blogspot.sg/2004/07/lee-kuan-yew-that-very-few.html

I want to post his article because many people did not realize that the 2011 election could also have been a walkover, if I did not enter the contest. My friend urged me to stand as a candidate, so that there would be a contest, and not another walkover. This was one key reason for me to stand in the election.

Get Value from your Life Insurance

A new insurance portal likes my book on Life Insurance. They bought 100 copies to give to their customers. There are many examples in the book about what are good and bad insurance products.
http://easyapps.sg/ishop2/ProductInfo.aspx?id=35

The portal is also keen to distribute a PDF copy of my book and are willing to pay me a royalty (to be discussed).

The book can be ordered here:
www.tankinlian.com/ishop

Those who are too lazy to find out are destined by lose a few ten thousand dollars, or more, on bad insurance products.

Guarantee to IMF - Appeal by Kenneth Jeyaretnam

Kenneth Jeyaretnam has filed the appeal. Here is his statement.

http://sonofadud.com/2012/11/22/press-release-on-the-possibility-of-an-appeal-of-the-imf-loan-judgement/

Beware of financial traps

Most consumers are not aware that an investment linked policy or an universal life policy can be a financial trap. Beware!
http://tankinlian.com/Admin/File.aspx?ID=703&Frame=1

Moon represents my heart (4 languages)

Here are the lyrics of the popular Chinese song "The moon represents my heart" sung in four languages
http://tankinlian.com/Admin/File.aspx?ID=540&Frame=1

And here is the video of this song, http://www.youtube.com/watch?v=NwF7mShS0po

Letter sent on Government Service

I receive letter sent "On Government Service" without any postage. Does this mean that Singapore Post, which is now a privatised body, is delivering the letters free, or does it charge the Government for the mail delivered at a bulk special rate?

Government policy and private sector

The Government tendered the land for Executive Condo development to the private sector, because they do not want to deal with the demands of the citizens. They prefer to let the private sector deal with the conflicting demands. This does not seem to work, because the problem does come back to the Government in another form. Read this:
http://www.todayonline.com/Singapore/EDC121123-0000123/Khaw-reminds-developers-to-exercise-flexibility-within-spirit-of-EC-policy

I prefer the Government to deal with the policy issues directly, rather than pass these issues to the private sector. This approach seems to produce quite conflicting results.

Vivo Life Policy

Here is an analysis of the Vivo Life policy, based on the start of the policy and after two years (for a policyholder who wishes to know if he should continue or terminate the policy).
http://tankinlian.com/admin/file.aspx?id=704&IID=708

Transparency and interpretation of policy conditions

An insurance company is advertising about the transparency of their insurance policies. While this is commendable, consumers should be aware that there are other important matters that need to be considered, such as interpretation of policy conditions and exclusions.
http://tankinlian.com/admin/file.aspx?id=697&IID=701

A company's reputation in honoring claims and treating customers fairly is probably more important than the transparency of their policy wordings.

Beware of financial traps

A successful entrepreneur, who had made a lot of money, asked for my advice about a universal life policy that was recommended to him. He had to put in $1 million in savings to get $5 million of insurance protection for his family. I told him to send the benefit illustration for me to take a look but advised him to be cautious, as there is a trap waiting for him.

I recall a case, described in my book "Get Value from Your Life Insurance" where the customer was not aware about the trap in a universal life policy (see case #16 in my book). The book is available at www.tankinlian.com/ishop

High income earners should also be aware of another trap in an investment-linked product that was designed to hide the high charges, until it became too late, causing the customer to lose $50,000.
http://tankinlian.com/admin/file.aspx?id=703&IID=707

A sensible advice on coping with high medical bills

I told an American friend, who had lived in Singapore for many years, that many elderly people are concerned about the high cost of health care in Singapore and had approached me to find out the "best medical plan" to cover their risk. I told my friend about the advice that I gave to the elderly. When he heard it, he remarked, "This is very sensible and yet many people do not realize it. It is nice for you to put it in simple terms." Here is my "sensible advice". http://tankinlian.com/Admin/File.aspx?ID=698&Frame=1

Threat of legal action

Is it really necessary for a Government Minister to get a lawyer to write to the websites over a mistake of fact, when an assistant could have pointed out the correct facts to the webmasters?
http://www.tremeritus.com/2012/11/22/two-websites-apologise-to-defence-minister-ng-eng-hen/

This type of heavy handed approach, while instilling fear, will cause the Government to lose the respect of the citizens.

Check on billing arrangement first

Dear Mr. Tan

My girlfriend was admitted to Raffles Hospital to do a MRI and subsequently remove a ostheoma from her forehead that was causing sharp pains and tension headaches. We went to Raffles Hospital because we wanted to have a second opinion after seeing a neurologist at TTSH that suggested my girlfriend be put on long-term pain medication which, in my opinion, does not solve the root cause of the problem and might in fact cause more problems in the future.

My gilrfriend is covered under Prudential's PruShield Premier Plus plan  with the Shield Extra rider that covers all deductables and co-insurance. As a former Financial Planner, I have always presumed that the difference between going to Government Re-structured Hospitals and Private Hospitals, with MediShield cover, is the payment of deposits during admission (i.e no need for deposit at Re-Structred Hospitals), and the rest of the bill will be billed directly to the insurer.

So imagine my shock when we were preparing for discharge from the hospital and the billing department informed us that we would have to clear the bill of $9606 (after $1250 has been deducted from her Medisave for deposit) before she can be discharged! According to Raffles Hospital, they will collect full payment from us before submitting a claim to Prudential, and only when Prudential has disbursed the claim will Raffles Hospital reimburse the amount back to us.

Luckily I was able to get a loan in the short time to cover the bill or I dread to imagine the consequencces. Now it got me thinking, what about others that might have been caught out in a similar situation but was unable to raise the amount needed? Is there a possibility of a standard practise across all hospitals regardless of Re-Structured or Private in cases where the patient is covered under a Shield Plan? As it stands now, the difference in practises between hospitals is extremely myriad and confusing even to active Financial Planners selling Shield Plans, let alone the layman.

I would love to hear your insight on this issue and what are possible ways for Insurers and Hospitals to work closer together to make seeking treatment less daunting than it already is in Singapore. 

REPLY
It is better to check with the hospital on their billing arrangement, prior to admission.

Wrong classification of hospital claim

The policyholder was shocked that the private Shield plan paid out only $150 from a hospital bill of $6,200 in a subsidized B2 ward. This was due to a wrong classification of a large item called consumables, and the insurer did not notice it. Fortunately, a friend helped the patient to get a larger payout
http://tankinlian.com/admin/file.aspx?id=702&IID=706

Inconsiderate customer survey

I received many requests to participate in customer survey that were created by inconsiderate people. They ask 100 or more questions, but do not tell you in advance. You have to go through several webpages before you find out.

Recently, Paypal invited me to do their customer service survey. I replied to the e-mail asking someone to reply to me, to confirm that there is a person who monitors the replies. They did. I followed up with this e-mail:

QUOTE: Can you tell me how many questions are in the questionnaire?I have been invited to answer questions that show me, one page at a time, and goes on for more than 100 questions.
I did not know after going through 5 pages, that there are many more pages to go. UNQUOTE

Instead of replying to my question, Paypal got someone to call me by telephone. He started with this message, "Before we continue, I like to tell you that this call is recorded for training purpose, etc ... "

I replied, "This is rubbish" and put down the telephone. I hope that this message goes to the survey companies. They have to understand that they are wasting customer's time with their methods and damaging the goodwill of their clients.

Make it easier for people to live closer to workplace

17 November 2012

Editor, Forum Page

Straits Times

The Strategic Planning Director of the Urban Redevelopment Authority said that

more commercial and industrial hubs will be developed out side of the Central 

Business District to provide more jobs "closer to the homes" and to "reduce traffic

congestion" ("Commercial nodes distributed islandwide, ST 17 Nov 2012).

I suggest that a more holistic approach be taken to deal with the challenges 

of accommodating a larger population within a small island. Apart from 

providing jobs closer to the homes, we should make it possible for people to 

live closer to their workplace, so as to reduce time and expenses

of commuting.

For decades, the government policy was to encourage people to own their 

homes. After investing in their homes, many people have to commute long distance

to their workplace. This adds to the congestion on our public transport and roads.

Why not make it easier for people to rent their homes, by making more rental homes

available and reduce the fiscal disincentives towards renting? It will be easier for the tenants  

to move their homes closer to their workplace on the expiry of the lease. 

We can look at the example of Switzerland, where a high proportion of their citizens rent, 

rather then own, their homes.

For those who have already bought their homes, we can make it easier for them to sell their

homes and buy a new home closer to their workplace, by waiving the stamp duty and 

reducing the cost of legal and other cost of transaction.  

While this may not suit all families, some families who find this approach to be workable. We need 

various measures to work together to solve the problem holistically.

Tan Kin Lian

Stem cell therapy

This video explains how stem cell therapy is used to reverse the aging process and improve your health. It is a marketing video by a company that sells a product called Purtier. I find the video to be quite educational, but it is rather long (more than 1 hour).
http://www.youtube.com/watch?v=kNSVOLMcql0&feature=related

This product, which is sold through multi-level marketing, is probably quite expensive. If you have personal experience on the use of this product (either positive or negative), share your views here
https://docs.google.com/spreadsheet/viewform?fromEmail=true&formkey=dFNmcUxWVzhEU2VyREZqTHAzRDlzdUE6MQ

Misleading statements

Here are some statements made by some life insurance agents to convince their clients to buy their expensive insurance policies that give a poor return. Have you been misled by these statements?
http://tankinlian.com/admin/file.aspx?id=170&IID=430

IMF Pledge

I have made a donation to the fund for Kenneth Jeyaretnam to take up the issue of the IMF Pledge. He is doing it on behalf of all Singaporeans and deserve our support. Please donate generously.
http://sonofadud.com/2012/11/12/statement-on-the-imf-loan-judgement/

Kenneth Jeyaretnam made a good summary of my views on this matter.
http://sonofadud.com/2012/11/19/1131/

Review the underwriting requirements for Medishield

NOT PUBLISHED BY TODAY PAPER

14 November 2012

Editor, Voices

Today Paper

I support that approach by the Ministry of Health in 

encouraging the uninsured people, especially the elderly, to apply

for coverage under Medishield (Today, 14 November).

The main obstacles faced by these uninsured people is passing the

underwriting requirements for acceptance under the Medishield scheme.

Many of the elderly people do have some chronic conditions or

other ailments that bar them from getting the cover. We cannot expect them 

to be in the same state of good health as young people.

I suggest that the Ministry of Health should have a moratorium on 

their current underwriting requirements for a period of six months 

to allow the uninsured to join the scheme. During this moratorium, they 

can be accepted without any medical examination or health

declaration.

It would be acceptable to exclude any claims for a period of three or six months 

from the date of joining. After the "waiting period", they should be allowed

to get the full benefit of the insurance.

As the elderly people are already paying a higher premium, compared to 

young people, the higher incidence of claims should not have any 

significant adverse impact on the insurance pool. 

I hope that the Ministry of Health can consult the insurance practitioners, 

especially those that do not have any vested interest, to find out the right 

approach to this challenge.

Tan Kin Lian

Mistaken about the yield

Mr. X posted in my Facebook that he is happy with his Manulife policy that gave him a return of 6% p.a. On my request, he sent the details to me. I checked the calculations and found that he was mistaken. Here is my reply.

You are paying $376.64 in annual premium each year on this policy. The surrender value, at the end of 20 years, including the bonus, is $8,434. The yield for the 20 year period is 1.06% p.a. It is a poor yield. It can hardly keep up with the rate of inflation over this period.
Although the insurance policy does provide some life insurance protection, the cost of this protection is extremely small.
Most life insurance policies offer a yield of 2% to 3% p.a. and is still considered to be a poor yield. In my talk on insurance, I advised that the benchmark for a good yield is 4% p.a. on a life insurance policy.

Choosing a good life insurance policy

Choosing a good life insurance policy is the same as choosing a good consumer product. Shop around. Compare prices, Take your time. Do not make a hasty decision. Be clear about what you want and make sure you pay the right price. Do not take the trust the statements of the sales person blindly (as they want to close the sale and earn the commission).
http://tankinlian.com/admin/file.aspx?id=701&IID=705

Helping small entrepreneurs

This article is well written and convey correctly, the problems faced by small entrepreneurs in Singapore.
http://www.tremeritus.com/2012/11/18/the-establishment-should-stop-saying-that-theyre-helping-local-entrepreneurs/

Half truths about life insurance

The insurance agent makes a lot of money by selling investment-linked policies using half truths. What are these half-truths? You hear them from your agent and they sound convincing. But, if you are discerning, you can see the flaw in these half truths.

Read this article and avoid being conned. http://tankinlian.com/Admin/File.aspx?ID=170&Frame=1

I want to clarify that there are many insurance agents who show concern for their clients, and offer products that are suitable for the clients. Some of them are helping me in Financial Services Consumer Association (FISCA) and provide advice for a modest fee (say $100 per hour).

Some of the agents selling the "bad products" are newly trained agents, and are not personally aware that these products are bad for consumers. They are trained by their agency managers to sell the benefits, but they did not realize that these are "half truths".

They sell these "benefits" to their family members, classmates and friends, without realizing that they are locking them in a bad investment that will make them poor, while giving big profits to their insurance managers and big income to their agency managers!

Listed property firm in Germany

Will you invest in this listed property firm in Germany? There are many risks that you may be unaware of. Do not just believe the statements from the marketing agent; you have to verify them from independent sources.
http://tankinlian.com/admin/file.aspx?id=700&IID=704

Desire for a happy life

Here are excerpts of the speech from the new leader of China. Pay special attention to the following statement, 

"Our people have an ardent love for life. They wish to have better education, more stable jobs, more income, greater social security, better medical and health care, improved housing conditions, and a better environment.

They want their children to have sound growth, have good jobs and lead a more enjoyable life. To meet their desire for a happy life is our mission."

Our Singapore leaders can pay attention to this goal as well - not just in hollow words, but in true belief.

http://www.todayonline.com/World/EDC121117-0000018/Xi-Jinping-wins-over-Chinese-online-community

Giving up power

I give full respect to President Hu Jiantao for being willing to give up full power and make it easy for the new leader to take charge.
http://www.todayonline.com/World/China/EDC121117-0000097/Chinas-Xi-praises-Hu-for-voluntarily-giving-up-power

Unjustified voiding of motor policy

While driving in Malaysia in 2007, Mrs Lee’s car churned out black smoke at the engine bay. She stopped at a motor workshop and was advised to replace the extractor. She was assured that many cars from Singapore had made similar replacements at the workshop and they did not have any problem.

She agreed to the replacement of the extractor and was able to pass the annual vehicle inspection test, required by the Land Transport Authority, for the next four years.

In August 2012, she gave permission to her 32 year old son to drive the car. The son hit the rear of another vehicle. After lodging the accident report, Mrs Lee’s insurer discovered the replaced extractor and voided the insurance cover on the grounds that it was an unauthorized replacement. Mrs Lee was previously insured with another insurance company and had changed to the new insurer in June 2012.

The insurer rejected the repair of Mrs Lee’s car and also repudiated liability for the claim from the third party, which amounted to $9,500.

I found the voiding of the policy to be unjustified as the repair was carried out by a proper workshop in Malaysia and was necessitated due to a problem with the engine at that time. Furthermore, it had passed the vehicle inspection test conducted under the Land Transport Authority rules for the following four years.

It seemed to be quite common for an insurer to repudiate liability on questionable grounds, leaving the motorist in a difficult position.

Improve information on bus services

14 November 2012

Editor, Forum Page

Straits Times

Mr. Noel Low said that the tinted windows in buses make it difficult for

commuters to ascertain their locations on overcast days and at night

(Problems posed by tinted bus windows, ST 14 Nov).

I agree with his suggestions that the bus should contain a digital 

display to show the location of the next stop. I saw this system in the

buses in London.

My friend told me that the buses in Hong Kong and Shenzhen have the

display in English and Chinese and also the sequential stop number. They

also provided free Wi-fi service!

With the GPS system already installed in the buses for the fare system, it

should be easy to incorporate the software to provide this digital display at a

minimal cost. 

Another useful service is to provide the bus arrival time at each bus stop. This

can access the data on the locations of the all buses, that are now captured 

for the fare collection. 

I hope that the Land Transport Authority can install a tablet at each bus

stop to display the bus arrival times.

We need to improve our the use of our bus services to complement the

trains that are now over-crowded. This will encourage more people to take 

buses, and relieve the congestion on our trains and roads.

Tan Kin Lian

Terrible survey form

I had good experience travelling on Thai Air during my recent trip to Bangkok. Their customer service department sent a survey form to me. I looked at the e-form and as it seemed to be just a handful of question, I decided to oblige.

It turned out to be many pages, each of which contained countless questions. The total questions must be more than 100. I sent this message in reply to Thai Air.

I find this survey to be TERRIBLE. You asking me to answer MORE THAN 100 QUESTIONS. I got fedup with the number of questions and decide TO ABANDON THE SURVEY. BE CONSIDERATE!!

But, to be fair to Thai Air, this type of inconsiderate survey is standard practice. The people who design the survey must be mad, besides being inconsiderate!

Bad advice from financial adviser

A financial adviser said, "Investment-linked policies are not design to benefit insurers or agents, as reported by Tan Kin Lian, but is an option for those willing to take higher risks (hoping for higher return, so you have to decide yourself".

Here is my reply to his comment. 

For those who wish to invest in shares, buy the STI ETF, which is an index fund. The fee charges is only 0.3% per annum. If the shares earn 6% per annum (my estimate for the future), you get 5.7%. If you buy a ILP, the insurance company and the agent takes away 4% from what you earn. So, the gross of 6% becomes 2%. 

If you earn 2% per annum (on ILP) over 30 years, compare to 5.7% p.a. on the index fund, the difference at the end of 30 years is 40% (after allowing for the cost of the life insurance protection). You get 40% less from the ILP. 

If the accumulated savings is $500,000, the ILP pays you $300,000. The $200,000 goes to make the agent and the insurance company rich and the consumer poor. 

I do not know why the financial adviser, who was supposed to look after the interest of the client, can advise the client  to invest in such a bad financial product, i.e. ILP?

The financial adviser can continue to give misleading and bad advice, but I will continue to point out their mis-statements. Consumers, beware!

User Guide for Facecard

Learn how to create your facecard and use its various features.
http://tankinlian.com/Admin/File.aspx?ID=699&Frame=1

Win a prize (Get Value from Your Life Insurance book) for creating a complete facecard. One prize will be given out each day (up to 30 November) to be selected from all the new facecards created or updated during the day.

Full picture of BTO flats

The Minister said that the price of BTO flats is affordable, as it require 23% of monthly income to service it.

http://www.todayonline.com/Singapore/EDC121117-0000023/First-timers-use-23-of-monthly-salary-to-pay-for-flat

Can the minister give the full picture?

a) What is the duration of the loan?
b)  What is the interest rate used in the calculation?
c)  What will be the ratio of loan repayment to income, if interest rate were to increase to 4% at a future rate?\
d)  What is the ratio of the flat price to the family income?
e)  What is the chance of any of the bread winner losing the job during the duration of the loan?

It is more risky to be safe!

A policyholder invested $42,000 in 3 annual premiums in a life insurance policy 15 years ago. He was given a benefit illustration that showed an illustrated maturity benefit of $82,000. The illustrated yield was 5% p.a.

According to the benefit illustration, the surrender value up to 14 years showed a yield of less than 1.5% p.a. He kept the policy to the maturity date and was shocked to receive a lower payout of $72,000, as the original $82,000 was "not guaranteed".

The reduced payout reflected a yield of 4% p.a., which is quite acceptable, in my view. However, if he had to terminate the policy earlier, he would get a poor cash value - allowing the insurer pocketing the difference. By keeping to the maturity date, he should get back closer to what he was promised, rather than take a cut of more than 10% on the promised amount. This is the case of - tail you lose, but head, you do not win.

If he had invested the same money in the STI ETF for the past 15 years, the average yield was 9% p.a. The accumulated amount would have been $123,000. Even if the stock market had dropped one third from the current level, say STI index of 2,000, the policyholder would still get more than what was paid by the life insurance policy.

This is another example of why consumers should not trust the "non-guaranteed" values shown in life insurance projections. The insurer has been making promising projections and cutting back on the promises too often. Do not trust these projections!

Note: these figures are based on an actual case that was presented to me.

Police told break-in victim to seek legal recourse

If there has to be legal action against every culprit,

wouldn't our courts be over-burdened by ceaseless litigation?

 

Second,

what are we to make of the police

and their duties and responsibilities

in crime prevention and deterrence?

http://www.straitstimes.com/premium/forum-letters/story/police-told-break-victim-seek-legal-redress-20121116

 

Views from Tan Kin Lian
I agree with the writer. Things are getting very bad in Singapore, when the Police neglect their duty to the citizen.

How much did Singaporeans invest in Genneva Gold?

Dear DPM and Finance Minister
Please report in Parliament, how much savings have Singaporeans put into Genneva Gold? The newspaper report from an unnamed official said that Malaysians have invested 10 billion ringgits in this company. Why is there no news from Singapore? http://www.straitstimes.com/breaking-news/se-asia/story/4b-pumped-genneva-gold-scheme-20121031

Buy from bank or insurance agent?

Someone asked me if there is a difference between buying an endowment policy from an agent and from a bank.

There is no difference. The endowment policy is offered at the same price. When the bank sells the endowment policy, the bank keeps the commission. The service provided by the bank is usually not the same as the personal service provided by the agent.

The distribution cost that is suffered by the consumer is usually quite high, so the return on the endowment policy is quite bad, compared to more suitable types of investments.

To find out how to invest your savings to get a better return, you should attend the educational talks organised by FISCA (http://easyapps.sg/assn/Org/Event.aspx?id=5).

Many people claim that they are too busy and cannot find the time. This is highly risky as their financial future is at stake. They are likely to make a bad investment offered by a sales person, and they get stuck for the next 30 years!

Tighten rules on advertising of investment schemes

I am disappointed at the reply of the DPM cum Finance Minister in Parliament. After so many people have been "cheated" in bad investment schemes, he still does not want to get MAS to be more active in policing the suspected schemes. I do not expect MAS to catch every bad scheme, but the high profile schemse can be stopped much earlier, if MAS were to ask the promoters to visit MAS for a "discussion".

http://www.todayonline.com/Singapore/EDC121116-0000049/MAS-looks-to-tighten-ad-rules-for-investment-schemes

Struggle for the middle class

Read this article by Lucky Tan about the harm caused by high housing prices and health care cost.
http://singaporemind.blogspot.com/2012/11/professor-warren-struggle-for-middle.html

World's poorest President

Here is the world's lowest paid President
http://www.bbc.co.uk/news/magazine-20243493

Who is the world's highest paid?

Promoting gold bar schemes

Recently a friend of mine received this SMS from company X dealing
with Gold Scheme.

"Before you spend your bonus on holiday and shopping, please reserve
your gold bar to enjoy our limited year end offer with total cash
payout of 12% for 6 months"

This is too good to be true in view of the current 'poor' bank interest rates.

He asked me: Mr Tan, I am just wondering what is our authorities doing?

Talented individuals or team players?

Steven Sinofsky is a highly talented person, who was regarded to be the key person responsible for the success of Office and Windows 7 in Microsoft. He has unexpected left Microsoft. Some people commented that he could not get along well with other key executives. 
http://buzz.money.cnn.com/2012/11/13/microsoft-stock-sinofsky/

Without going into details of the Microsoft episode, I like to pose this general question. For a large organization like Microsoft, what is more important - talented individuals or the ability to work in a team?

What about the public service in Singapore. Should more emphasis be given to individual KPI or the ability to see the bigger picture, of the public good?

Bring existing systems of banks into authentication framework

12 November 2012

Editor, Forum Page

Straits Times

The Infocomm Development Authority has replied that the "authentication framework for online transactions is already in place (ST, 12 Nov). This framework allows for multiple authentication providers to be registered.

Its strategy appears to be promoting the OneKey security token issued by Assurity Trusted Solutions and to persuade the banks, which are the biggest users of online authentication now, to switch to this system.

My suggestion was to find a way for the existing authentication systems of the banks to be brought into the national framework. This will allow the existing security token issued by a bank to be used for authentication of online transactions from third parties, such as security firms and government agencies.

This will save on the heavy cost of issuing and authenticating new tokens to existing bank customers and to the general public. It also bring in a large number of existing users to the national framework, at minimal cost to the country.

The banks should be allowed to collect a fee that is adequate to cover their additional cost of providing the authentication service and provide a small margin to recoup their investment. Their customers will also appreciate this service.

I look forward to a positive approach from IDA to this suggestion.

Tan Kin Lian

Loss on ILP after 7 years

An airline steward, who is in his early 30s, told me that he invested his regular savings in an investment-linked policy for the past seven years. The "investment" is still showing a loss of about 20%, i.e. the value of his investments is lower than the premiums that he has paid.

I told him that his loss is probably due to the following factors:
a) The high distribution cost, i.e. up to two years of his savings is taken away to pay commission and other marketing expenses
b) The spread, i.e. up to 5 percent of the invested sum is taken away up front
c) The expense ratio, which would probably be close to two percent of the accumulated savings each year

He did not realize that the ILP policy has been designed to look after the interest of the agent, agency manager and insurance company, before looking after the interest of the policyholder! Many consumers did not realize this, and when they do, it is too late.

This is why the life insurance companies are making hefty profit now, while their customers have to wait for ages to see a small appreciation in their investment - which hardly keeps up with inflation.
.

Losses due to spread and churning

A friend, who used to work for a multinational life insurance company operating around the Asean countries told me that the company made a lot of profit on their investment linked products.

There is a 5% spread between the bid and offer price of the units, They agents sell large volume of the product when the stock market was doing well. The customers were not aware about the spread.

When the unit prices went above the spread, the agent advised the customers to sell their units to take profit. When the market came down, the agents advised them to re-invest and they earned the commission again. The insurance company and the agent shared the 5% spread.

If the market does not come down, the agent will convince the customers to reinvest anyway, and incur the spread again. The agent and the insurance company made their commission and profits on the "churning".

If the market does not recover and goes down, the policyholder will be taking a big loss on the invested amount. They have to suffer the loss on the spread, on the churning and on the market.

Many investors had approached me about the losses of 20% to 50% on their unit trust that is being held over 5 to 10 years. I wonder if the losses were due to the factors described above? It is sad that many consumers are so naive, and were taken for a ride by the so called "financial advisers".

Facecard - on mobile apps

You can learn more about this app:

https://itunes.apple.com/us/app/cfacecard/id568334627?mt=8

Reimbursement of discount on policy

Dear Mr. Tan,
I consulted with last year regarding a life insurance policy with critical illness rider. It has been a burden to me every month that I decided to surrender. My agent was very upset saying it tarnished her reputation and she also demanded me to reimbursed her the discount. I have taken several policies for my family members under her. What should I do?

Reply
You are not required to reimburse the discount to her. You have already suffered a loss when you surrender the life assurance policy. If the agent harrass you, you can report her to her insurance company or to the regulator (MAS). You can ask the insurance company to remove her as the servicing agent for your other policies.

Tackle the root cause of inflated motor claims

ACCORDING to the General Insurance Association of Singapore,

regulations introduced in May last year

require motorists making property damage claims

to give other motorists or their insurers the opportunity to inspect

the damage to the vehicles before repairs are undertaken

("Pre-repair inspection rule for accident vehicles"; last Friday).

The association should state

the percentage of third-party claims that follow this regulation.

In my consulting work in the region, I know that

the cost of motor repairs in Singapore is several times that in neighbouring countries.

While this can be partly explained by the higher cost of doing business here,

the scale of the difference indicates that there are other contributing factors.

http://www.straitstimes.com/premium/forum-letters/story/motor-insurers-should-tackle-root-causes-inflated-claims-20121113

Name card in the cloud

Create your name card in the Cloud, so that your friends can search for you and get your latest contact and other details. You can download your contact details in your mobile device. (iPhone/iPad).
www.cfacecard.com

FISCA talk on investments

39 participants have applied to attend the FISCA talk on investments. This talk will advise the participants on how to select investments that can give a good return, and to manage the risk. This talk is free to FISCA members. Non-members pay $30. This is the last free talk for members.
http://easyapps.sg/assn/Org/Event.aspx?id=5

Happy Diwali

Medical insurance for the Elderly

What is the best medical insurance plan for the elderly in Singapore? Read my recommendation here. Share it with your elderly parents or, for elderly people, share it with your adult children.
http://tankinlian.com/admin/file.aspx?id=698&IID=702

An issue of justice and conscience

A number of academics and research economists,

including establishment figures,

have recently criticised the PAP,

mostly in modest language but sometimes rather strongly.

Their main criticism is

the continuing mass intake of “cheap” foreign workers

and the adverse impact it has on Singaporeans.

Another area they seek to speak up on is

the public accusation of unequal job treatment in favour of the newcomers.

Some of these academics may feel compelled to take a stand now

for fear that the problem will become even more serious.

Ambassador-at-large Tommy Koh

is the latest to add his voice

to speak up for the little guys, the poor and the needy.

Several months ago,

the former state economic adviser, Prof Lim Chong Yah,

had a dramatic proposal to narrow the economic gap.

Next,

Prof Tan Khee Giap of the Lee Kuan Yew School of Public Policy

hit out at the state’s foreign recruitment policies

and called for better protection of locals.

Another surprising critic was Yeoh Lam Keong,

former chief economist at the GIC headed by Lee Kuan Yew.

Prominent commentator Chua Chin Leng

praised these elites for speaking up.

“It must be a matter of conscience, of a sense of justice.”

http://thestar.com.my/news/story.asp?file=/2012/11/10/focus/12294005&sec

Misleading disclaimer notice

Retailers are putting up notices on "no refund, good not returnable". This is illegal in Malaysia.
http://thestar.com.my/news/story.asp?file=/2012/11/10/nation/12301773&sec=nation

We need to check on the law in Singapore.

Telling lies

My friend in Indonesia told me this story. He met an insurance agent working for a multinational company. The agent said, "Don't buy insurance from the local companies. They will not pay your claims. They are financially weak."

My friend told her, "I will report you to the Government. You are telling lies. How do you know that all local companies are weak? Have you made any research to back up your statement?" The agent was scared and never see him again.

I told my friend, "The insurance agents from a multi-national company in Singapore has been making similar statements like this over the years. This is how they can sell their high cost, low return product. They just spread lies".

A newly recruited agent working for this multi-national company recently told me that his agency manager has trained him to tell the same "marketing  line". I call it a "plain lie".

Insuring against medical cost for the elderly

Is there a good insurance plan to protect you against the high medical cost for the elderly?
http://tankinlian.com/Admin/File.aspx?ID=618&Frame=1

Get a return higher than inflation

The life insurance companies are doing a roaring business because their product offer a better return, compared to the low interest rate paid on fixed deposits. Consumers may not realize that they are locking up their savings for a long period, sometimes up to 30 years, for a return of 2% per annum. This will not cover inflation.

Consumers should invest in a low cost index fund, such as the STI ETF, and earn a much higher return, that is likely to be much higher than inflation. The difference over a 30 year period can be about 40%. Do you prefer to collect $500,000 or $300,000?

Transparency of insurance contracts

Do you want to know clearly what is covered or excluded under your insurance policy? It is not just a matter of the use of simple language in the policy contracts. The application of insurance principles and the interpretation of the claims officer play a bigger part.

http://tankinlian.com/admin/file.aspx?id=697&IID=701

Humor on politicians

http://tankinlian.com/admin/file.aspx?id=696&IID=700

Over-insurance and moral hazard

What is an appropriate amount for a person to insure him or herself? Why does a life insurance company refuse to accept an application for insurance for an amount that they consider to be excessive? How does the insurance company decide on what is this limit?
http://tankinlian.com/admin/file.aspx?id=695&IID=699

Structured investments

Dear Mr. Tan
My friend Alice recently attended a property fair at Marina Bay Sands. She was approached to join Company A which do structured investments for clients with guaranteed capital gain of 115% annually, i.e. if you put in $100,000, you will get $115,000 annually.  Alice was surprised and was informed that the money collected is used to purchase properties in USA to generate the yields.  Her question was whether such form of investments are legal and are endorsed by the regulator? What is your 'feel' of such products, Mr Tan?   

REPLY
This product is not regulated. You give $100,000 to a company who gives you a piece of paper and do what they like with your money. If the company does not pay back your investment, what can you do? Never trust this type of unregulated investments.

Risk Management and Insurance

Here are my points to students towards the end of the term. I want them to take away more than just the technical aspects of risk management. They should also be confident about making decisions.
http://tankinlian.com/admin/file.aspx?id=694&IID=698

www.tankinlian.com/ishop

Starhub Roaming Service

I travel to Indonesia and Thailand regularly. I refuse to use Starhub roaming service as the charges are too high. Starhub charges $15 a day for data access. I bought a data card from Indonesia that is a valid for use for 1 year for about $30.

Starhub sells a prepaid card for $17 with 100 MB of data, SMS and talk time. I assume that their local partners provide the service at similar charges to their customers on their pre-paid card.

I am willing to pay $8 a day for data access (up to a certain limit), local calls and SMS. If Starhub partners can make it available at this price, I will buy the service. This can be shared between Starhub and the local partner.

If Starhub and its Conexus partners continue to charge unrealistic rates, consumers like me will continue to find other channels. I refuse to take incoming calls and will buy a local data card, even if it is a little inconvenient.  Starhub should be realistic and charge reasonable rates.

Beware of this type of financial trap

Ms. Kim (not her real name) is a foreigner who come to Singapore to teach in our local university. She save a large part of her monthly salary to be used for her husband to start a business in a few years time in her home country. She was approached for an independent financial adviser who recommends to her an investment plan.

Being trained in financial matters, she asked carefully about the charges from the investment plan. She was told that the charges are less than 1%, which was acceptable to her. She received a monthly statement that showed the monthly savings, the modest charges, and the investment units purchased from her savings. It looked quite satisfactory.

She bought the investment plan because of the attractive bonus given to her upfront, which was subject to certain conditions - which she found to be acceptable.

After 18 months, the monthly statement started to show the charges to be 4% of the monthly savings. She was shocked. She approached the financial institution and was horrified to learn the following:

a) She had bought an investment-linked policy that have high distribution cost.
b) The 4% monthly charge would apply for 20 years, taking away a large part of her future gains and giving a poor return on her savings
c) If she terminate the plan now, she would have to pay a penalty that took away almost half of her accumulated savings, giving her a loss of about $50,000.
d) The page that was supposed to contain the charges was deliberately removed by the financial adviser. She could not prove this fact, and had signed a statement "I am aware about the terms and conditions of the policy".
e) The 18 month delay in applying the high charges was a deliberate design of the policy to get her to commit a lot amount of savings before discovering the nature of the contract.

Ms. Kim complained to the insurance company - which pushed the responsibility to the financial advisory firm. The firm investigated her complaint and said that she could not provide the evidence of being misrepresented.

She was very sore and felt cheated by "the system". She never imagined that she could be cheated in this manner in Singapore. Her faith in the integrity in Singapore was badly shaken by this event.

The insurance company and the financial advisory firm is still offering this investment product to the public. A few other high net worth individuals have been caught by the same trap.