We have heard a number of times about unethical advisers’ behavior. I would like to write about one type of unethical client’s behavior.Sometime ago, the newspaper reported that NTUC Income opened a business center for walk-in customers. This is what we called the insurer’s direct channel business. One NTUC Income insurance agent was anonymously quoted as saying that his client approached him for financial advice but subsequently went direct to NTUC Income to purchase the product concerned because the insurer was able to give a discount. The agent was furious. A couple of weeks ago, my colleague experienced the same thing in which she provided advice to her client only to discover her going direct to NTUC Income to purchase because the insurer gave one month premium waiver. Yet another adviser shared of his experience of his client going direct to another insurer (not NTUC Income) on her own accord after seeking his advice on the matter because the insurer gave discount to the insurance policy. Recently, this almost happened to me when my client wanted to exercise his free-look and go direct to the insurer to purchase when he mistakenly assumed that my quotation was more expensive then the insurer. 

I received a message from a friend about one particular Financial Advisory Firm. However, it does not appear to be an Independent Financial Advisory firm judging from its website.I replaced the name of the firm with XXX.

Their sales quota for life policy is $6000 total premium/Month & $20,000/month for investment.

1st month is 'Grace' Period, 2nd month onwards must perform the requirements otherwise the following month, every sat must report office do cold calling from 1000-1200.

When I first join Promiseland, a financial planner – who had many decades of experience – advised me the importance of “underwriting” a client before proceeding with the business proper. (Underwriting is an insurance jargon describing the process of the insurer in assessing the risk of the proposed insurance coverage and to decide whether to increase premium, impose exclusions or decline the business). Of course for myself, in this context I am not referring to medical underwriting but rather in assessing the occupation risk in doing business with a new prospect. Occupation risks associated with new prospects are:

Yesterday was such a nice day but today was a very lousy day.

A client called me up and told me that he wanted to terminate his insurance policies recently bought because of a newspaper article which eventually I found he misinterpreted. After asking me so many questions seeking my advice, I discovered that he wanted to hear what he wanted to hear which was to terminate the policy. I felt so hurt that a person could trust a journalist for financial advice rather then someone licensed by MAS to give financial advice.

9:30am - Arrived at Changi Airport T2 to meet my client. He is there for an insurance medical checkup and I was there to collect documents as part of further underwriting requirements for the insurance applications that had already been made.

10:30am - Arrived at Tampines SingHealth Policyclinic to buy medicine (I am sick!) by taking a bus from Airport to here. I am delighted that the medication is so cheap. Earned $20 for being cheapo.

11:00am - Eat my lunch at S11.

There is some confusion over the remuneration structure of financial planners and financial advisers. In response to this confusion, I made a quick survey of the most common remuneration structure model and these are what I found:

In the article, it quoted a stellar performance of HSBC GIF BRIC Freestyle M1C fund which despite its obscene 12.97% ratio returned large returns over a one year period. The obscene expense ratio is due to its performance fee. It implied in the article that in this example, high expense ratio did not mean poor performance.

I thought it is a widespread believe that many financial advisory firms impose sales quotaa on their representatives. Apparently this is supposed to be something "secretive" about it. Recently I made a remark here:

http://forums.sgfunds.com/viewtopic.php?t=3345

I am pretty disappointed with the Sunday Times' article on the evaluation of the 4 portfolio challenge. No, I am not disappointed with the returns of the portfolio but rather the nature of the article is not educational and potentially misleading. Here are the reasons why:

Today’s newspaper published a story on how insurance agents have made themselves so “low-class” by knocking on people’s doors to sell insurance. May I point out other views that were not emphasized :-