I was at one point wondering if Financial Advisers in Singapore are helping people or they are helping themselves by exploiting the people. I have been compiling portfolios over the years and I seldom come across a portfolio which in my opinion, proper… I’ll like to show one classic example on the type of portfolio that I frequently compiled. I’m sure that this supposedly IFA is making a very good income by such planning for his clients…
(Ps: I’m not saying that all Financial Advisers are bad. I am far from perfect either. However I have an interesting observation which is “Many(not all) of the Star Performers sell plans like those below” and they are termed “Successful” by the company, industry and public) Those who spend time analysing and thinking what best for clients cannot even hit sales quota for promotion or even earn a simple “Senior” title to his namecard, regardless of how much experiences he/she has. They are also treated like dirt by the company because they are likely not the one who brings in the big money.
* Young Lady – 27 yrs old executive earning around $3+k/mth
* May have plan for marriage and getting a property in the near term
* In order not to get myself in trouble by posting this, I’d deleted many columns, including the insurer’s and policy names…
You are currently spending around $3,860/yr on Risk Management including ILP riders and Whole Life.
* The Insurance premium looks reasonable and kept within 10% of your income but this will keep increasing as the riders for your ILP gets higher yearly with your age. The premium can be quite amazing after 20-25 years down the road.
* This portfolio have not factored any form of disability Income coverage, Accidents and Hospitalisation coverage, which seems missing.
* In my opinion, you are on the high side for Critical Illnesses and I will prefer that you have lower Life Coverage to free up more for term and investments.
You are currently putting in around $13,315/yr on Wealth Accumulations.
* This amount is probably nearly 35% of your current take-home pay.
* Your Endowments are too long (all 25 years) and a bit too many based on your current income
* Your investments happens to be those with too high cost
* Your accumulation will get lesser over time when insurance premium for ILP increases. It is very hard to track your investment when you tag insurance with it.
* You are certainly a good saver and I commend you for it but you probably met an adviser (IFA) who cared for his own interest more than yours.
* I would have recommend a different strategy for you if I am your adviser…