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Three questions before you commit to a long-term financial plan

Buyer remorse is real, and it grows with the sums involved. Three questions that reduce it before you sign.

By Isaac Fang, CFA First published 3 April 2022 Updated 4 October 2026

Illustration of a woman pausing with a pen above a blank page, looking out of the window

Some financial plans come with long-term commitments, and heavy consequences if you cannot keep to them. In some cases more harm is done than if nothing had been proposed in the first place. Buyer remorse is very real, and where significant sums are involved, the feelings intensify.

So here are three considerations, not exhaustive, to reduce financial planning buyer remorse.

1. Can the regular commitment be sustained?

Consider the possibility that it cannot. When that happens, what can be done? Are there contingencies for a prolonged job loss that is not caused by illness or accident? The gig economy is far larger than it was for previous generations, and long-term income stability is not what it used to be.

Where income is variable, good years may be followed by bad years that have to draw on reserves. Assuming reserves were properly set aside, that is.

Voluntary top-ups to CPF for retirement work differently. Skipping a year does not affect what is already in the account. (Note that from January 2025 the CPF Special Account was closed for members aged 55 and above, with balances moved to the Retirement Account and Ordinary Account. Check the CPF Board's current rules for your age.)

A life insurance policy can be a long-term commitment. In the words of a common phrase in benefit illustrations: early termination of the policy usually involves high costs, and the surrender value payable may be less than the total premiums paid. That is also why a review of existing cover comes before replacing a policy someone else sold you.

2. What if you learn something later that changes the picture?

Past events cannot be changed. How we look at them can.

Where returns are uncertain but costs are fixed (it helps to set a required rate of return before committing), hindsight can trigger buyer remorse, especially when the costs were not properly understood or the value hoped for did not materialise. Some might call this waking up, but by then the damage has been done. Let's just say over-promise, under-deliver is not good lah.

Some investment instruments are classed as complex by the regulators. It is better to bring financial literacy up before using, or proposing, such instruments.

3. Have the alternatives been weighed?

There may be alternatives that fit better, and they can be assessed side by side. This is where the FDM (Facilitating Decision Making) method ticks several boxes. Alternatives are considered properly, your own weightings are applied, and the reasoning is visible.

A quick recap

  1. Consider the possibility that the regular commitment cannot be sustained.
  2. Consider the possibility that new knowledge will change how you see the decision.
  3. Consider the alternatives, and do not take the decision to commit lightly.

How I try to keep these in view

Write the priorities down first. Much of the industry works on a Proposal-Acceptance Arrangement, so the client carries real responsibility for the final choice. That is why I use the FDM method: what matters to you, and how much, is on paper before any product is discussed.

Understand, not just acknowledge. Signing a disclosure form is a start. Understanding what you have signed up for is what prevents regret later.

Stuck in "reasonable basis" mode. Financial advice is far from the level of diagnostic medical advice, because outcomes are not statistically stable the way they are in medicine.

Insisting on these three considerations can help reduce buyer remorse. Alignment of interest, good prophylaxis and better decision making, woven together, make a strong rope against regret.

Questions

What happens if I stop paying premiums?

It depends on the policy. Some lapse, some use their cash value to keep cover going for a while, and some can be made paid-up with reduced cover. Check the policy terms, or ask the insurer, before you stop.

What is a surrender value?

The amount an insurer pays if you end a policy that has a cash value before it matures. In the early years it can be less than the premiums you have paid.

First published on isaacfang.com on 3 April 2022 and on LinkedIn. The CPF paragraph has been updated for the January 2025 changes to the Special Account. Lightly edited for this site.

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