As I was walking in a shopping center toy department, there was a Playstation2 demo set. We went to the station and tried to play the game. However, the game was in Japanese. Without understanding Japanese and plus the salesperson uninterested to help us (he was fiddling with his phone), my son & I lost interest in the game.

The incident is kind of trivial but this is a reflection of the financial industry at certain times.

Firstly, not everyone is keen in financial matters but for those who are keen they will definitely “look” interested. If they approach a financial adviser, I am very sure the financial adviser will be absolutely keen to help them. But some financial adviser will only be keen to help in certain areas and will not be helpful in other areas. For example, some financial advisers are specialized in life insurance, hence they will not be so excited about investment. Instead, they will end up recommending an ILP and market it as an “investment” although technically an ILP is a whole life policy linked with the performance of a chosen few funds without any smoothing in returns. On the other hand, some financial advisers specializes in  investment and hence they tell the whole world that the one and only “right” way to do financial planning is to purchase a cheapest term insurance and they should “invest” the rest with the financial adviser. Some financial adviser goes to the extreme even to rebate all commissions from the term insurance to the client – of course this is no big deal since commission from a term insurance is so little. The client will be enticed by this rebate.

Secondly, certain financial products are just plain unsuitable and yet they continue to be marketed aggressively. Just like a Japanese language game is of no use to a non-Japanese speaking person, thus a financial product that has not be designed to meet the needs of a person is not much of a use. For instance, there is a product that is designed for 3 generations. It is a whole life policy that covers a child for death (no critical illness!) and after X years of premium payment, the plan will pay a perpetual income to the policyholder. Initially the policyholder is the parent but when the child grows up, he or she will take over and becomes the policyholder and thus will receive a perpetual income until he dies. The next generation will receive the death benefit. Sounds so good but I really want to ask – under exactly what circumstances would a person need this kind of product? I cannot think of any. In fact, if the adviser does a Full Disclosure fact find, there is likely no circumstances that this product can be found to be suitable.  In the first place a whole life policy without critical illness coverage is already flawed. We can forget about the 3 generation thing. By the way, as a parent myself I always feel it is morally important to teach my children to support themselves. This will be through teaching good values and they having a good education. Thus I doubt I will buy a financial product that gives them a perpetual income. If they know they have a perpetual income, they might become lazy and as the saying goes – an idle mind is a devil’s workshop.