Financial Advisors ?
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You are right in a way. Of course, the banks and the advisers are aggressive in their selling as it is their livelihood. They earned commission for a living. There is no free lunch in this world just as you won't work for a company for free, would you? Of course, if you dislike the idea paying them for their time and service, you can always do it on your own. But somehow or rather you will still incur some form of charges too.Originally posted by edenboy:Do you think they act on your interest or their own?
When you walk into a bank, what they try to do is to SELL you a financial product rather than ADVISE you. The financial Fact finder is designed to always show a need for some knid of financial product.
Even if you have all the products and all the money in the world, you are definately short of something...
So beware when you meet these people, either as individuals or at Banks.
Remember, you need to have money before they are your friends.
If you don't believe me, try this.
When you are approached to buy insurance, try to steer towards Term insurance.... (Term insurance has very low commission to the seller.)
They would most probably cite that Life insurance has a return and etc etc.
(Also better for them because they get better commission).
Once you sign, you sign for life.
Buy only what you can afford, not based on what you are projected to earn.
You should be comfortable with your monthly payments. In today's world, I would suggest less than 3%.
Any comments"The financial Fact finder is designed to always show a need for some knid of financial product."
There is definately a need for financial protection against death, disability and Illnesses as majority of the population is not adequately covered. The fact finder is just a tool to help you to identify these areas."Even if you have all the products and all the money in the world, you are definately short of something..."
If you REALLY have all the money in this world, you will not be short of anything financially. There is no need for you to buy any product."you need to have money before they are your friends."
Partly agreed on this. You need to have enough cash flow in order to invest in financial instruments. The fees is paid to them for their services to you (I mean the competent and responsible kind). You cant expect them to do it for free as they have a family to feed too."When you are approached to buy insurance, try to steer towards Term insurance.... (Term insurance has very low commission to the seller.)
I agreed that term insurance has a low commission payout. Although Term plan is cheap, the main purpose of term is to complement your basic plan to cover your protection shortfall for a affordable price within your budget. Besides, all term plan won't cover you over age 65. I believed that the advisors you met are incompetent kind. The competent advisors would advise you that you buy a term to cover for your shortfall of coverage. But again, there is some ppl that don't feel comfortable to pay for the term for a long period of time without any cash value. It is up to each individual's choice and you make the DECISION not the advisors whether or not to take up the plan.
They would most probably cite that Life insurance has a return and etc etc.
(Also better for them because they get better commission).
Once you sign, you sign for life."Buy only what you can afford, not based on what you are projected to earn. You should be comfortable with your monthly payments. In today's world, I would suggest less than 3%.
I totally agreed on this statement. The realistic projected return (depending on which investment instruments) currently now (not the future) is ard 3% or more. As the economy turns to blooming, the return will definately be higher than 3% just as the bank would increase their interest rate which is currently 0.125%. During the good old days, when our economy is blooming like mad, the bank interest rate is ard 3% i think. -
Right now the FA, either independent or tied they are been paid by the commission from the product they sell. For independent FA, some of the plans they sell pay higher comm than the other. The rest up to you to figure. The important thing is you need to find a competent FA.Originally posted by Qitai:Anyway, don't think it make sense from a business point of view to just advise. It does make a lot of sense to also help you with the actual paper works.
Issue is do they define what is the best product for you, then help you with the buying or do they start with a product and try to fit you into that product no matter what.
In singapore context, fee by advise is still impossible to implement as our majority of the population is not financially 'matured' enough. Just ask yourself, would you pay to the advisors for just only financial consultation? How many ppl will do that? I think only the very wealthy would do that.
What I know is that there is fee-based FA in advanced nation like US and UK but not all. Some FA there is still on comm-based.
Bottom line is, singaporeans basically is still financially 'immatured' for us to have totally fee-based FA. -
Yup I totally agreed that ppl should acquire such financial knowlegde and if possible invest on your own in stocks, shares and futures (Options) if you have the time, huge capital ($$) and wide investment knowledge. But remember that invest online or thru brokers you will still incur sales charges and the risk of losing all you have is basically very much higher than the UT that the bank and other Financial insitutions offers.Originally posted by Peppermint:i prefer self directed investment esp if u do not have high enuff net worth...
there are tons of information on investing out there which most people can find out if they take the time to do it...
once u are in possession of such knowlegde, you would never ever want to buy any of the products that banks offers or insurance agenets offer
if anyone need help can post them here we can share with each other -
wat abt stuff online?Originally posted by Qitai:Currently, there is fundsupermart which is a unit trust fund magazine. Also, there is this smartinvestor magazine. Go to the bigger bookshops. You will find a lot more variety of magazine than those neighbourhood magazine stands. Not sure if there is any others. Try look around more.
do u visit any websites or sth? -
the sales charge and fees are still incurred through UT in the form of expense ratios, annual management fees, sales charge which is a RECURRING expense. esp those with monthly saving plans or investment linked insurance policiesOriginally posted by audix:Yup I totally agreed that ppl should acquire such financial knowlegde and if possible invest on your own in stocks, shares and futures (Options) if you have the time, huge capital ($$) and wide investment knowledge. But remember that invest online or thru brokers you will still incur sales charges and the risk of losing all you have is basically very much higher than the UT that the bank and other Financial insitutions offers.
if u are just buying solely stocks...with the intention of holding it for long term then you only incur a 2 time charge..once when you buy and when u sell...
as with all things there are risks but it can be minised with knowledge.
actually u dun really need huge captial....i started investing with only us$5,000 a pittance... -
Yup I understood your point of view and indeed there is recurring expenses for those UT or ILP.Originally posted by Peppermint:the sales charge and fees are still incurred through UT in the form of expense ratios, annual management fees, sales charge which is a RECURRING expense. esp those with monthly saving plans or investment linked insurance policies
if u are just buying solely stocks...with the intention of holding it for long term then you only incur a 2 time charge..once when you buy and when u sell...
as with all things there are risks but it can be minised with knowledge.
actually u dun really need huge captial....i started investing with only us$5,000 a pittance...
But both of these has it pros and cons if you look closely enough. Both of these instruments cater for different kind of investors' profile.
As for the charges, of course, Stocks wont have the recurring charges as you are doing every thing your own and at your own risk. ILP/UT on the other hand, is generally for part coverage and part investment and should be invested for med-long term growth and is managed by Full time - fund managers (monthly charges) (they need to feed their family too) and one time sales charges is paid to the advisors for their services and doing the paper work for you. If you met with mishap (death) at any investing period, for ILP a full amt plus profit or full amt (if u make a loss for your fund invested in) you invested will be paid out to your immediate family unlike stocks.
I'm not saying stocks is not good for investing in but it is generally too complicated and higher risk than UT or ILP.
As for savings plan, it is cater for long term (20-35 yrs) and for a specific purpose in order to make a better return than putting your cash in banks. If you really study, the proceeds (return) from these plan is generally very much higher than the bank savings account... -
These are the website I go to for unit trust.Originally posted by shinta:wat abt stuff online?
do u visit any websites or sth?
www.fundsupermart.com
www.dollardex.com
There is also fanatiq, POEMS, Aviva etc for different needs.
Suggest you go www.sgfunds.com to ask around more. That forum is made by individual investors for individual investors. It is primary for unit trust though. But it is evident the people there are also very good in other areas of financial management. -
ah thanks!!Originally posted by Qitai:These are the website I go to for unit trust.
www.fundsupermart.com
www.dollardex.com
There is also fanatiq, POEMS, Aviva etc for different needs.
Suggest you go www.sgfunds.com to ask around more. That forum is made by individual investors for individual investors. It is primary for unit trust though. But it is evident the people there are also very good in other areas of financial management.
will go there to have a look later on