Importance of DiversificationNovember 12, 2017
Debt Financing ManoeuvresJanuary 21, 2018
Image is a screen grab of the landing page of Comparefirst.sg on 2017-12-24.
At the point of writing this entry, a very important fact has to be stated to put everything into perspective:
Life Insurance provides some of the highest profit margins for Advisor Representatives in Singapore, among the variety of MAS regulated financial products..
It explains plenty. Why would most fact finds skew towards insurance companies’ products? The white elephant in the room, which no one is asking about is, what percentage of fact find retirement recommendations call for CPF Special Account top ups? Is it because there is no commission derived for the recommendation? Or is CPF Special Account top ups not a suitable recommendation to begin with? Food for thought isn’t it?
- When discussing objectivity, alignment of interest issue should pop up.
- When discussing alignment of interest, remuneration issue should pop up.
- When discussing remuneration, commission issue should pop up.
Alignment of interest is the link between commission remuneration and advisor objectivity. It is quite obvious that I am a proponent for fee-based advice. Why hasn’t that gone big scale in Singapore, is material for another write up, another day.
To improve the industry, information asymmetry needs to be broken and what better way to do this than to have proper authority deliver a web aggregator for the public to play around with.
The scales have tipped over, we have entered an era of information overload. Product developers won’t make it easy for you to compare and they will do that with competitive features that will spoil you for choice. Comparison of the major features of sum assured amounts, projected cash value amount and premium amount will be the first step. The challenge is in rationalising the best choice when there are competing good features.
If you would like better alignment of interest (nothing is perfect and I will not be so bold to use the word “best”), make an appointment with Isaac.