1. finance
2. investing
3. funds
4. exchange traded funds

May 2015
Financial
PLANNING
6 Budget 2015
8 Exchange Traded Funds
24 Retiring on “Just” a Property Portfolio
Excellence in Holistic Planning
CONTENTS
F MESSAGE _______________________________________
4
President’s Message
5
Chief Editor’s Message
F PRACTITIONERS _________________________________
On the Cover:
As Singapore celebrates 50 years of
independence this year, this issue looks at
how one can be financially independent
by 50, retire on just a property or invest in
Exchange Traded Funds. With incentives
abound for babies born in 2015, first-time
parents can learn how to plan your finances
optimally to provide for the family.
EDITORIAL BOARD
CHAIRMAN
Mr Ben Fok, CFP®
CHIEF EDITOR
Ms Yash Mishra, CFP®
MEMBERS
6-7
Budget 2015
8-11
Exchange Traded Funds (ETFs)
12
Book Review – Invisible Hands
F CONSUMERS ____________________________________
13-15 Financial Independence by 50?
16-19 Financial Planning for First-time Parents
20-23 Critical Illness Insurance – What’s New?
24-27 Retiring on “Just” a Property Portfolio
28-30 Planning Right till the End
F NEW INITIATIVES ________________________________
31 Membership Events
Mr Andy Chiok Gay Shing, CFP®
Mr Derek Liang Aik Kwan, CFP®
Mr Isaac Fang Chung Ngee, CFP®
Mr Joseph Paul Kennedy, CFP®
Ms Kee Siew Poh, CFP®
Mr Sammy Chiu Sung Kee, CFP®
Mr Shawn Yap Khoon Juay, CFP®
CONTRIBUTORS
Mr Ben Fok, CFP®
Ms Yash Mishra, CFP®
Mr Christian Obrist, BlackRock
Ms Jolene Han, BlackRock
Mr Derek Liang Aik Kwan, CFP®
Mr Shawn Yap Khoon Juay, CFP®
Ms Kee Siew Poh, CFP®
Mr David Lee, AFPCM
Mr Sammy Chiu Sung Kee, CFP®
Mr Joseph Paul Kennedy, CFP®
Mr Ching Kwang Weh, AWPCM
Financial Planning Association of Singapore
146 Robinson Road #04-02, Singapore 068909
Tel:
(65) 6372 1030
Fax:
(65) 6372 0121
Email:
[email protected]
Website: www.fpas.org.sg
CFP®, CERTIFIED FINANCIAL PLANNER ™ and
are certification marks owned outside
the U.S. by Financial Planning Standards Board Ltd (FPSB). Financial Planning Association
of Singapore is the marks licensing authority for the CFP marks in Singapore, through
agreement with the FPSB. AFPCM, AWPCM, ASSOCIATE FINANCIAL PLANNER, ASSOCIATE
WEALTH PLANNER are registered certification marks of the Financial Planning Association
of Singapore.
Financial Planning is edited, designed and printed by Ray Media Pte Ltd and published
by the Financial Planning Association of Singapore. Although every reasonable care has
been taken to ensure the accuracy and objectivity of the information contained in this
publication, neither the Financial Planning Association of Singapore, Ray Media Pte Ltd nor
the magazine’s contributors shall be held liable for any errors, inaccuracies and/or omissions
and no liabilities shall be attached thereto. Copyright of the materials contained in this
magazine belongs to the Financial Planning Association of Singapore. Nothing in here shall
be reproduced in whole or in part without prior written consent of the publisher. All rights
reserved.
MCI (P) 074/09/2014
FPAS’ VISION
The FPAS vision is to ensure that all Singaporeans have
access to responsible and appropriate financial planning
advice, by raising the professional standards of the
industry through education and shared code of ethics. In
support of this vision, FPAS provides a range of services to
consumers and to member individuals and organisations.
In particular, FPAS aims to:
F Educate and inform the public of the need for objective
professional advice in making secure financial decisions.
F Ensure sufficient professional and ethical standards
to maintain the confidence and trust of existing and
prospective customers.
F To provide members with education, training and
information to enhance their provision of objective
professional financial advice.
F Develop and maintain high ethical standards for
members.
F Represent the industry and its members to ensure an
operating environment which is conducive to providing
high quality financial advice.
3
MESSAGE
PRESIDENT’S MESSAGE
Dear Members,
Like a bird singing in the rain, let grateful memories survive in time of sorrow.
Robert Louis Stevenson
W
ords of solace from Singapore and the world provide a healing touch to the family of the late Mr Lee Kuan Yew.
Happiness and grief are integral to life as they make us resilient and commiserative. We are blessed to have our great
Founding Father who made Singapore a land of opportunities for the past 50 years and into the future 50 years in
multiples.
FPAS rides on the prosperity of the financial industry since its establishment and evolves over time to embrace the future. Besides
the official website and FP publication, members and the public can follow us on various social media for the latest news and
events. The member CRM is modernised to coordinate data management. The curriculum is enriched to align to the market and
regulatory changes. Events are organised to outreach to the consumers and peer associations. Many more…
The EXCO and committees volunteer time and effort to make things happen and possible. There is only one vision: a brainier you,
a better CFP® professional, a brighter future.
“
Kimmis Pun, CFP®
President
Financial Planning Association of Singapore
4
We are blessed to have our great
Founding Father who made
Singapore a land of opportunities for
the past 50 years and into the future
50 years in multiples.
May 2015 Financial Planning Association of Singapore
Dear Members,
MESSAGE
CHIEF EDITOR’S MESSAGE
A
s Singapore celebrates 50 years of Independence, and remembers in gratitude the strong foundation laid by its founding
father, Mr Lee Kuan Yew, we join the nation in remembering his enduring legacy.
In this issue, we discuss the salient points from the ‘Budget 2015’ that did a commendable job in focusing on solving
tomorrow’s issues today. The Budget encourages innovation, enhances competitiveness whilst securing the revenue base and
significantly strengthens social security. The four pillars of social security are highlighted i.e. Home ownership, CPF, Healthcare
Assurance and Workfare. To buffer our retirement adequacy the enhanced CPF and Silver Support Scheme were introduced.
As the residential property market in Singapore continues to rationalise, we help you understand what are the real issues in ‘Retiring
on a “Just” a Property Portfolio’. The financial markets and products continue their innovation and we get the expert‘s viewpoint from
Blackrock to weigh in on the evolution and use of ‘Exchange Traded Funds’ and continue to track the recent developments in the
insurance sector with the new definitions of Critical Illness.
After the Pioneer Generation and the millennials, we move our focus to the financial challenges of the first-time families in ‘Financial
Planning for First-Time Parents’ and as SG turns 50 we discuss how you can strive to be financially free at 50 .
Finally, if you are headed out when school breaks in June and are looking for a good read, try Steven Drobny’s ‘Invisible Hands’ which
we feature in our Book Review section.
Happy reading!
“
Yash Mishra, CFP®
Chief Editor
www.fpas.org.sg
After the Pioneer Generation and
the millennials, we move our focus
to the financial challenges of firsttime families in ‘Planning for FirstTime Parents’ and as SG turns 50,
we discuss how you can strive to be
financially free at 50.
5
2015
Mr Ben Fok, CFP®
The 2015 Budget was a very forward looking budget. In essence,
it focused on Singapore’s need to build for the future by trying to
address “Tomorrow’s Problem Today”. The main areas for this year’s
budget were as follows:
•
Encouraging Innovation
•
Enhancing Competitiveness
•
Securing the Revenue Base
•
Strengthening the Social Security
The Budget continues with the government’s twin focuses
on economic restructuring by promoting productivity and
strengthening the social safety nets. The former is done through the
skills future development with an emphasis on lifelong learning and
planning by Singaporeans. This formed the core of the issues needed
to transform our society.
Social safety nets were strengthened through the ‘Silver Support
Scheme’, together with the increase in the CPF contribution ceilings
and rates for older workers. This will help the most vulnerable with a
better safety net.
The current CPF contribution rates for workers aged 50
Enhanced CPF Contribution Rates For Older Workers
Age Band
Current Position
New Position
19%
16%
20%
17%
Employee
13%
13%
Employer
13%
13%
Employee
7.5%
7.5%
Employer
8.5%
Above 50 to 55 years
Employee
Employer
Above age 55 to 60
Above 60 to 65
9.0%
Source: KPMG Service Pte Ltd – Singapore Budget 2015
The increase in employer contribution rates will go into the Special Account and the increase in employee contribution rates
will go into the Ordinary Account.
6
May 2015 Financial Planning Association of Singapore
Current Position
The current CPF salary ceiling is
$5,000 per month and
$85,000 per annum for total wages.
The SRS contribution caps are as follows:
Singaporean/Singapore Permanent Residents
(SPRs):
S$12,750
Foreigners: S$29,750
New Position
The CPF salary ceiling will be raised to S$6,000 per month and
S$102,000 per annum for total wages.
In line with the above, SRS contributions will be raised to:
Singaporean/SPRS: S$15,300
Foreigners: S$35,700
Silver Support Scheme:
The scheme’s aim is to provide support to the bottom 20 to 30% of Singaporeans
aged 65 and above.
PRACTITIONERS
CPF Salary Ceiling and Supplementary Retirement Scheme ( “SRS”) Contribution Cap
It is a permanent scheme to supplement incomes in retirement and will apply to
current and future senior citizens.
Eligibility will depend on factors such as one’s lifetime wages, household support
and housing type.
Payouts will be made for life as long as the qualifying factors are met.
Payouts of between $300 to $750 will be made quarterly and begin from the first
quarter of 2016.
Personal Income Tax:
A personal income tax rebate of 50% ,capped at S$1,000 will be granted to all
resident individual taxpayers for YA 2015.
The S$1,000 cap is to ensure the benefit goes mainly to middle income and upper
middle income tax payers.
CLAIMING EXPENSES AGAINST PASSIVE INCOME FOR INDIVIDUAL TAX PAYERS- ALTERNATIVE METHOD
Current Position
An individual who derives passive rental
income from residential property can claim
actual deductible expenses incurred in
producing the income.
New Position
Effective YA 2016, individual taxpayers can use an alternative method in lieu
of claiming the actual amount of deductible expenses incurred against rental
income.
An individual can claim 15% of the gross rental income as rental expenses. In
addition an individual can claim interest paid on the loan taken to purchase the
rental property.
TAX DEDUCTION FOR APPROVED DONATIONS
Current Position
Qualifying donations made in calendar years
2009 to 2015 would qualify for a 250% tax
deduction.
New Position
For qualifying donations made in the year 2015, the tax deduction would be
increased to 300% of the amount donated.
The 250% tax deduction has been extended for approved donations made during
the period from 1 January 2016 to 31 December 2018.
Highlights to the most impactful changes on the retirement portfolio for
individuals. We encourage that you read the detailed budget commentary’s for
more information.
1 Singapore Budget 2015 Commentary KPMG http://www.kpmg.com/SG/en/SingaporeBudget/budget2015/Pages/singapore-budget-2015-KPMG-budget-Seminar.html
2 Singapore Budget 2015 Commentary PWC http://www.pwc.com/sg/en/budget-commentary/
3 Singapore Budget 2015 Commentary Deloitte http://www2.deloitte.com/sg/en/pages/tax/articles/singapore-budget-commentary-2015.html
www.fpas.org.sg
7
Exchange Traded Funds (ETFs) –
Innovation driving popularity
Christian Obrist
Jolene Han Exchange Traded Funds ( ETFs)- Innovation driving popularity
BlackRock Christian Obrist/ Jolene Han
E
xchange Traded Funds (ETFs) have
Mutual funds typically fall into an active and which corresponding ETF to buy.
Exchange
havecategory,
turned out
to be the
onefund
of the most popular and innovative financial produc
turned out
to be oneTraded
of the Funds
most (ETFs)
management
meaning
from thefinancial
financialmanager
industry tries
in recent
times.
the launch
of the
ETF
1990,
instruments
popular emerge
and innovative
to “beat
theSince
market”
as While
the first
US has
ledinthe
rapidthese
growth
of
opened up a new world of investment opportunities for all kinds of investors. As open-ended index funds that a
to emerge from the measured by a particular benchmark via Exchange Traded Products (ETPs), Europe
and traded on exchanges, ETFs have enabled investors to gain broad exposure to global equity markets, secto
financial industrystyles,
in recent
times.
Since income
active securities
decisions, such
as stock selection,
and Asia
are and
catching
up. US-listed
as well
as fixed
and commodities
with relative
ease
at relatively
lowerETPs
cost than
the launch of the
first
ETF
in
1990,
these
buying
and
selling
individual
securities
at
the
contributed
$246.1
billion
in
2014,
threetraditional mutual funds.
products
instruments have opened up a new world
right time, gauging exposure to particular quarters of all flows globally and passed $2.0
1
Mutual funds
typically
into an active
management
category,
fund
manager tries
to “beat the ma
Europe-listed
ETPs finished
of investment opportunities
for all
kinds offall countries
or sectors
or via an overall
portfolio meaning
trillion in the
assets.
as measured by a particular benchmark via active decisions, such as stock selection, buying and selling individ
2014 with $61.4 billion in net flows, three
construction process.
securities at the right time, gauging exposure to particular countries or sectors or via an overall portfolio constru
timesexactly
the total
2013 stocks
and bringing
total
process. Passive management on the other hand seeks to purchase
theforsame
and bonds,
and i
under management
to $457.3 billion.
As open-ended index
that are listed
Passive management,
on the simple
other hand,
samefunds
proportions,
as a particular
index – delivering
marketassets
exposure.
The decision-making
process lies
the end-investor,
in termsseeks
of which
markets
or sectors
they
want exposure
and which
corresponding
Meanwhile,to
Asia-Pacific
listed
ETP net flows ETF to
and traded on exchanges,
ETFs have enabled
to purchase
exactly
the same
stocks
investors.
investors to gain broad exposure to global
and bonds, and in the same proportions, as
were $16.0 billion in 2014, bringing total
While the US has led rapid growth of Exchange Traded Products (ETPs), Europe and Asia are catching up. US
a particular index—delivering simple market assets under management for the region
1
ETPs contributed $246.1 billion in 2014, three-quarters of all flows globally and passed $2.0 trillion in assets . E
over
the
$200
billion
milestone
for
the
first
as fixed income securities
and
commodities
exposure.
The
decision-making
process
lies
listed ETPs finished 2014 with $61.4 billion in net flows, three times the
total for 2013 and bringing total assets
2
with relative easemanagement
and at a relatively
lower billion.
with the
end-investor,
in terms oflisted
which
to $457.3
Meanwhile,
Asia-Pacific
ETPtime.
net flows were $16.0 billion in 2014, bringing
2
assets
under
for theorregion
$200
billiontomilestone for the first time .
cost than traditional
mutual
funds.management
markets
sectorsover
they the
want
exposure
equity markets, sectors, and styles, as well
8
Source: BlackRock Global ETP Landscape, Dec. 2014
May 2015 Financial Planning Association of Singapore
PRACTITIONERS
Source: BlackRock Global ETP Landscape, Dec. 2014
Source: BlackRock Global ETP Landscape, Dec. 2014
Lower fees for ETFs relative to those
UK, Japan or India, there is an ETF out there
high yield and emerging market bonds
team) have been a key selling point for
As the ETF market has developed, funds
the counter (OTC) market, fixed income
index funds
along with the transparency
1
that offer investors access to particular
ETFs consist of a portfolio of bonds and
Lower fees for ETFs relative to those charged for active funds (to cover the costs of a portfolio man
that you can buy.
in both hard and local currency. Rather
team) have been a key selling point for index funds along with the transparency and convenience o
costs of a portfolio manager and research
than trading bonds through the over
an exchange. In recent times active managers have found it increasingly difficult to outperform ben
charged for active funds (to cover the
Source: BlackRock ETP Landscape, Dec. 2014
sectors, styles and broader asset classes
Source: BlackRock ETP Landscape, Dec. 2014
and convenience
of being traded on an
2
are traded on an exchange like an equity
exchange. In recent times active managers
have also developed. For example, if
security, improving price transparency and
have found it increasingly difficult to
you happen to like the prospects for the
making it more convenient for individual
outperform benchmarks.
healthcare sector as people increasingly
investors to trade. Institutional investors
live longer lives, then you can buy an ETF
are turning to fixed income ETFs for
that tracks an index of these stocks.
the same reasons—using them as core
i
Fewer US fund managers beat the market
in 2014 that at any time in over a decade,
long-term investment holdings, as tools
so investors need to choose carefully.
Another example is dividend investing,
for targeting precision exposures, and
While the cost advantage of ETFs will
which has played a significant role in
increasingly as financial instruments that
continue to drive future growth at the
portfolio
serve as substitutes or complements to
expense of under-performing active funds,
Historically seen as a defensive strategy,
product innovation along with regulatory
dividend-yielding stocks provide investors
improvements and investor education will
with the opportunity to profit from two
play an increasingly important role.
different components of return: price
Product Innovation
& Choice
construction
for
decades.
derivatives.
appreciation and dividend income. ETFs
based on baskets of higher-yielding
dividend stocks have proved popular in
low interest rate environments and/or
Regional and single-country ETFs are often
periods of market uncertainty.
the more popular options for investors
looking to fine-tune their investment
Although the fixed income ETF market
exposures. Offering exchange-listed access
remains small when compared to the
to a diversified pool of exposures covering
cash bond and mutual fund markets—we
nearly every corner of the market, these
believe assets in fixed income ETFs could
ETFs are efficient access tools that can be
reach US$2 trillion globally over the next
flexibly combined or used on a standalone
decade. The universe of fixed income
basis to express a specific market view. So
products has experienced exponential
depending on whether you are attracted
growth in recent times—with investors
to the equity markets of Europe, the US or
now able to access corporate credits,
Asia or even single countries such as the
www.fpas.org.sg
9
4
believe assets in fixed income ETFs could reach US$2 trillion globally over the next decade . The universe of fixed
income products has experienced exponential growth in recent times – with investors now able to access corporate
credits, high yield and emerging market bonds in both hard and local currency. Rather than trading bonds through the
over the counter (OTC) market, fixed income ETFs consist of a portfolio of bonds and are traded on an exchange like
an equity security, improving price transparency and making it more convenient for individual investors to trade.
Institutional investors are turning to fixed income ETFs for the same reasons – using them as core long-term
investment holdings, as tools for targeting precision exposures, and increasingly as financial instruments that serve as
substitutes or complements to derivatives.
Source: BlackRock Global ETP Landscape, Dec. 2014
Factors & Smart Beta
1.3 Factors and Smart Beta
factor tilts such as positive expected return,
low volatility or low correlation with other
Regulations Bolster
Confidence
sources of return. However, portfolio
In the face In
of heightened
uncertainty,
the face ofmarket
heightened
market uncertainty, minimum volatility (or min vol.) indices have emerged and attracted
construction
is simple,to rules-based
and to
investor
interest.
vol. ETF attempts
reduce exposure
market volatility
tracking indices
that
Meanwhile,
ongoingbyregulatory
changes
minimum substantial
volatility (or min
vol.) indices
haveA min
consist
of
securities
that
exhibit
relatively
low
volatility
and
concentration
risk.
As
such,
a
min
vol.
ETF
might
exhibit
transparent,
which
typically
means
lower
have continued to bolster confidence in the
emerged and attracted substantial investor
less risk during market turbulence
compared
with
a broadly
diversified
index such as the S&P 500. It can also be used
fees
and
costs
and
high
capacity
relative
to
industry. framework.
For a long time,
many
investors
interest. Ato
min
vol. ETFlower
attempts
to reduce
achieve
overall
portfolio risk when used as part of an overall assetETF
allocation
For
example,
it you
traditional
strategies.
were this
concerned
ETFs aoutside
the giant
exposure hold
to market
volatility
US stocks
andby
aretracking
concerned
about aactive
potential
decline, you can diversify
risk bythat
buying
minimum
volatility
US
ETF.of securities that exhibit
US market were simply not liquid enough
indices that
consist
relatively low volatility and concentration Investors who buy smart beta products to withstand sudden bouts of volatility.
risk.
should believe that markets are inefficient,
3
there
areNov.
factors
which drive positive
Source: Financial Times, citing Bank ofthat
America
data,
9 2014
4
Source: BlackRock, Bond Investors Guide to ETFs, 2014
As such, a min vol. ETF might exhibit less risk
during market turbulence compared with
a broadly iidiversified index such as the S&P
500. It can also be used to achieve lower
overall portfolio risk when used as part
of an overall asset allocation framework.
For example, if you hold US stocks and are
concerned about a potential decline, you
can diversify this risk by buying a minimum
volatility US ETF.
It is this approach of identifying certain
factors or static exposures that has led
to the rising uptake of so-called smart
beta strategies. In simple terms, smart
beta strategies attempt to enhance riskadjusted returns through exposure to
desirable characteristics—often referred to
as factors. This means moving away from
the simple, market cap-weighted approach
of traditional index funds and including
10
risk-adjusted returns and that they can
identify those attractive factors. As such, it is
vital to understand that while the manager
of a smart beta product is responsible
for providing the promised exposures—
following
the
pre-specified
rules—the
investor is responsible for investment
performance relative to the asset class
benchmark.
in
Europe
UCITS
Directives
have provided a harmonised set of rules
governing how funds should be structured
and managed. These rules provide a high
degree of investor protection by ensuring
acceptable levels of portfolio, liquidity and
risk diversification while limiting leverage.
This has seen global asset managers
embrace the UCITS rules as a standard
of quality to help them raise assets. And
legislative changes related to fee-based
Investors should also bear in mind that
while smart beta strategies may show top
quartile performance according to back
tests, nothing stops them from having lower
quartile performance in future.
The emergence of smart beta means the
current landscape of investment strategies
is now a continuum, with passive index
strategies at one end, active strategies on
the other and smart beta in the middle.
However,
advice, such as the Retail Distribution
Review (RDR) in the UK, are expected to
sway financial advisers to employ more ETFs
in their client portfolios and drive wider
adoption overall.
In Asia, QFII and RQFII (Qualified and
Renminbi Qualified Foreign Institutional
Investor) reforms along with the recent
Shanghai-Hong
Kong
Stock
Connect
scheme, have enabled foreign individual
investors to access China’s A shares market
May 2015 Financial Planning Association of Singapore
PRACTITIONERS
and optimism over Abenomics has led to a
200010143N) for informational or educational
is not intended to be relied upon as a forecast,
surge in the Japanese stock market with the
purposes only. This does not constitute an
research or investment advice, and is not a
Japanese ETP industry experiencing rapid
offer or solicitation to purchase or sell in
recommendation, offer or solicitation to buy or
AUM growth. The Australian ETP market has
any securities or iShares funds, nor shall any
sell any securities or to adopt any investment
surpassed the $10 billion mark as Australian
securities be offered or sold to any person in
strategy. Any opinions contained herein reflect
investors look to diversify their international
any jurisdiction in which an offer, solicitation,
our judgment as of January 2015 and may
exposure and continue to have a preference
purchase or sale would be unlawful under the
change as subsequent conditions vary. The
for self-managed fund strategies.
securities laws of such jurisdiction.
information and opinions contained in this
material are derived from proprietary and
Finally, while ETF penetration among US
There are risks associated with investing,
nonproprietary sources deemed by BlackRock
investors still accounts for 70% of global
including loss of principal. Past performance
to be reliable, are not necessarily all-inclusive
AUM, international investors have also
is not indicative of future performance and is
and are not guaranteed as to accuracy. No
benefited from the liquidity, transparency
no guide to future returns. Index performance
part of this material may be reproduced,
and affordability of an increasingly wide
returns do not reflect any management fees,
stored in retrieval system or transmitted in any
range of ETF offerings. Data from Markit
transaction costs or expenses. Indexes are
form or by any means, electronic, mechanical,
shows that for the two years to September.
unmanaged and one cannot invest directly
recording or distributed without the prior
2014, Asia Pacific-listed ETF AUM growth
in an index. This material contains general
written consent of BlackRock.
has outpaced growth in other regions.
information only and is not intended to
While these funds are still heavily tilted
represent general or specific investment
iShares® and BlackRock® are registered
towards domestic equity and fixed income
advice. The information does not take into
trademarks
products—109 of the 504 ETFs listed in Asia
account your financial circumstances. An
subsidiaries in the United States and
over the past five years have exposure to
assessment should be made as to whether
elsewhere. All other trademarks, servicemarks
markets outside the region. This gives Asian
the information is appropriate for you having
or registered trademarks are the property of
investors a growing set of tools with which
regard to your objectives, financial situation
their respective owners.
to express their investment views outside of
and needs.
domestic markets and ongoing education
of
BlackRock,
Inc.,
This material may contain “forward-looking”
development and customer awareness of
information that is not purely historical
new opportunities.
in nature. Such information may include,
1 BlackRock ETP Landscape, Dec. 2014
among other things, projections, forecasts,
2 BlackRock ETP Landscape, Dec. 2014
estimates of yields or returns, and proposed or
(Singapore) Limited (co. registration no.
expected portfolio composition. This material
www.fpas.org.sg
its
© 2015 BlackRock Inc. All rights reserved.
S0115/190
will be vital to support continued market
This material is prepared by BlackRock
or
11
PRACTITIONERS
BOOK REVIEW
Invisible Hands
BY Steven Drobny
Ms Yash Mishra, CFP®
T
he book ‘Invisible Hands’ is the successor to
‘Inside the House of Money’ by the same
author, Steven Drobny. It interviews eleven
pseudonymous fund managers, the “invisible
hands” of the book’s title, who made money in 2008. In
portions of the book, he brings back both Jim Leitner
and Andres Drobny for repeat interviews.
The book’s overarching theme is a discussion of how
“real money” investors like pension funds and university
endowments can improve their performance during
crises like 2008.
The author asks the interviewees how they would
manage a pension fund and what hedge-fund
techniques large endowments should use to increase
their risk-adjusted returns. This discussion seems
quixotic: these large investors practically are the market,
so in the aggregate they will never be able to avoid
events like 2008.
‘Invisible Hands’ has some of the same drawbacks as
its predecessor. Many of the interviewees speak in
generalities and have very similar views. For example,
“The Commodity Trader” and “The Commodity Investor”
are both true believers in the myth of a commodity
supercycle.
Nonetheless, ‘Invisible Hands’ has one phenomenal
interview, with “The Plasticine Macro Trader,” and that
alone makes the book worth buying.
Enjoy the read!
12
Some quotes that stick out from the book:
“Equity returns over the last 30 years have
been exceptionally high and consistent.
Stock market data goes back to 1720 and
it is almost impossible to find a period
comparable to the last 30 years.”
“In the absence of dividends, there was no
real appreciation in the Dow Jones from
1906 to 1974... Asset prices have gone up
so much [since 1974] in part because the
anchor was pitched so low.”
“Today’s long-only stars operated during
a period of time where investors did not
require a macro compass.”
“Even a true contrarian is only really
contrarian about 20 percent of the time;
it’s all about choosing the right moment to
fight convention.”
May 2015 Financial Planning Association of Singapore
CONSUMERS
Financial Independence BY 50?
Putting Bold Aspirations into
Actions
Ms Kee Siew Poh, CFP®
The greatest retirement crisis is when one is too frail to work and too poor to retire. With proper
planning, it is possible to work because we choose to and not because we have to. This is when we
become financially independent, where our assets and income can maintain our standard of living for
the rest of our lives. We have the ability to do what we want to do without worrying about finances,
sooner rather than later.
Financial Independence
I
nstead of just sitting around, drinking and playing golf, many
may still choose to continue to work as it keeps them mentally
stimulated and gives them a sense of fulfillment.
The difference is that they work because they choose to and not
because they have to. They work on their own terms doing what they
are passionate about instead of working tirelessly round the clock
with little work-life balance.
Wouldn’t it be nice to be able to have such options sooner rather
than later? Is it possible for anyone to be financially independent by
50? For many, this is a bold aspiration, sometimes too bold that few
would actually take any action.
The journey of a thousand miles begins with a single step. Even the
longest and most difficult ventures have a starting point. For some of
the Gen Y who aspire to be financially independent by 50, what are
some steps that can be taken as a starting point?
Distinguish between Emergency Fund and
Idle Fund
An emergency fund is cash that you have saved up for life’s unexpected
events, to help you to be prepared when emergencies happen. This
usually represents three to six months of living expenses and is kept
in an instrument that is fairly liquid such as the bank savings account.
If you foresee you are at the life stage where there could be a fair bit
of unknowns, for instance, the risk of losing a job, you may want to
increase it to six to nine months.
www.fpas.org.sg
So, based on a monthly expenditure of $5,000, six months of an
emergency fund would amount to $30,000. Instead of setting aside
the $30,000 emergency fund, some may even have $300,000 in the
bank savings account. This is equivalent to 60 months of emergency
funds!
While the first six months or $30,000 in this case is considered as
emergency fund, the balance 24 months or $270,000, in the absence
of any short term needs or purpose such as marriage, purchase of
house or car, etc., are actually idle funds.
If these idle funds are meant for longer term purpose such as
provision towards financial independence or children’s education, it
would be important to look into ways to make them work harder. This
can be done by building what I would call a “Pay-Cheque” Income
and a “Play-Cheque” Income.
Build up your “Pay-Cheque” Income & “PlayCheque” Income
What is the difference between “Pay-Cheque” Income & “PlayCheque” Income?
“Pay-Cheque” Income is simply a very predictable and almost
guaranteed stream of income we receive every month when we are
financially independent, similar to the monthly pay-cheque received
from our employer while working.
This amount of money received monthly should not be subjected to
any market risks. It should not go up and down or fluctuate with stock
market or property market, just as our current pay does not fluctuate
with the market. Why is this predictability important? This is because
the purpose of “Pay-Cheque” Income is for basic living expenses.
13
“Play-Cheque” Income, on the other hand, refers to income which is
market-dependent. It can fluctuate with the stock market or property
market. While it has downside risks, it also has upside potential,
allowing one to ride on market growth and an opportunity for an
additional boost to the income.
As the purpose of this Play-Cheque Income is for fun and leisure,
fluctuation is acceptable. If market is favourable, it will provide
additional funds for leisure such as travelling to some exotic countries.
And if market is unfavourable, the “Pay-Cheque” Income will still be
available to take care of the basic living expenses. This is because
both the “Play-Cheque” and “Pay-Cheque” Income complement each
other.
How to build a “Pay-Cheque” Income & “Play-Cheque” Income?
If we need $6,000 a month, half of it may come from “Pay-Cheque”
Income (for basic living expenses), the other half from “Play-Cheque
Income” (for fun and leisure). For those who are more conservative,
Description
“Pay-Cheque” Income can be built up by setting aside money
systematically every month or every year into Annuity-based or
Retirement Income instruments which will in turn give a predictable
income or payout. There is the option of structuring this payout
either over the active retirement years or throughout one’s lifetime.
The key is being systematic in savings, because the more systematic
you are, the more predictable outcome will be.
As for “Play-Cheque” Income, this can be built by setting aside lump
sum or ad hoc savings into the unit trusts portfolio, stock or property
market for growth potential. To avoid the difficult or even impossible
task of trying to figure out the exact best time to invest into unit
trusts, you may employ the strategy of dollar cost averaging, where
you invest a fixed amount on a regular basis, regardless of current
market trends. Hence, you will buy more shares when the price is low
and fewer shares when the price is high. This will help to mitigate the
risk of investing at an inopportune time.
“Pay-Cheque” Income
“Play-Cheque” Income
Predictable
Market Dependent
Purpose
Basic Living Expenses
Fun and Leisure
Example
Food, housing, transport
Hobbies, holidays
CPF Life, Annuity-based or
Retirement Income Instruments
Unit Trusts Portfolio, Stock/equity, Property
Characteristic
Examples of Instrument
14
they may like to allocate more towards “Pay-Cheque” Income.
May 2015 Financial Planning Association of Singapore
For example, for a Singaporean turning 55 in 2016, if he owns a property and chooses not to pledge the property, these are the three
options he has:
3 Options
Sum Required at 55
Monthly Payouts at 65
Basic Retirement Sum
$80,500
$650 to $700
Full Retirement Sum
$161,000
$1200 to $1300
Enhanced Retirement Sum
$241,500
$1750 to $1900
For one who chooses the Full Retirement Sum Option, this means
that by setting aside $161,000 at age 55, he can expect to receive a
monthly payout of $1,200 to $1,300 from age 65 for the rest of his
life. This can form the basic tier or the foundation building block of
“Pay-Cheque” Income, giving a certain assurance that there will be
income throughout the lifetime of an individual, at least from age
65 onwards.
For single income families where the husband is the sole
breadwinner, the wife may not have sufficient funds to form the
Basic Retirement Sum to receive a meaningful payout. This is where
dual-life annuity-based instruments may be used to help couples
plan their retirement jointly so that in the event of a death, the
surviving spouse will still continue to receive the payout and will
not be left stranded financially.
Options to Complement CPF Life
Too late to be planning?
For those who wish to be financially independent earlier for
instance at age 50, Retirement Income instruments may be used
to provide a monthly payout from age 50 to 65, before the CPF life
kicks in from age 65.
The key to being financially independent as early as 50 is to start
early. It is important for us to think ahead and to plan wisely. The
earlier you start, the more options you have both in terms of the
“Pay-Cheque” and “Play-Cheque” instruments and the more likely
you are able to accumulate more funds through the effect of
compounding.
With inflation, rising cost of living and longer life expectancy,
depending on CPF Life alone from age 65 may not be adequate.
This is where the retirement income instruments or annuitybased instruments can be incorporated to complement CPF Life
as alternative source of “Pay-Cheque” Income. Some of these
instruments are linked to inflation so your real income will not be
eroded by higher costs of living.
www.fpas.org.sg
CONSUMERS
The CPF LIFE is a national annuity scheme that allows members to receive a monthly income for life. In the recent recommendations
made by the CPF Advisory Panel, Singapore residents can look forward to a more flexible national retirement scheme that allows them
to customise different level of savings and payouts.
http://www.straitstimes.com/cpf-recommendations-2015
http://business.asiaone.com/personal-finance/investments-and-savings/retire-peaceknow-your-numbers
15
FINANCIAL PLANNING FOR
FIRST-TIME PARENTS
Roadmap through the
Financial Maze
Shawn Yap Khoon Juay, CFP®
Your first baby is not your only major milestone in your life. In fact, it can change your life significantly.
Not only do mummies have to cope with the demands of pregnancy, but daddies also develop
a condition called Couvade Syndrome, also known as sympathetic pregnancy, where the males
experience the same symptoms and behaviours of expectant mothers. As parents, we are often
anxious to provide the best for our children. However, in our fast-paced modern society, both time
and money fast become scarce resources. The purpose of this article is to help you to navigate
through some of the vital issues of new parents.
Budgeting
C
ash management is one issue you may be concerned about. Baby expenses can result from an endless shopping list and could make
a dent in your wallet without you noticing. Almost everything looks cute in small sizes so be mindful of what you purchase. Babies
and children grow up very fast so they outgrow everything in the blink of an eye, especially clothes, toys and infant furniture. Always
try to get used items when you can. Do your best to differentiate between needs and wants. Using a cooking pot or a brand new food
steamer rather than a bottle steriliser can also save you some bucks. Child proofing your car and home is a must-do. There have been cases
of young children falling out of windows. So remember to look into safety measures such as window grilles. If you are shopping for a car seat,
look for models that can last as long as possible. Some models are designed only for babies and some are configurable from newborn up to
toddler or older depending on their height and weight.
After delivery, confinement assistance and food are very important to mummies. Going forward, there will be more recurrent expenses such
as diapers, milk, infant/child care, etc. Use two categories for your budget list, one for the one-time expenses and the other for recurrent
expenses. Then go through it and prioritise them. You might be surprise to find possible savings here and there.
16
May 2015 Financial Planning Association of Singapore
CONSUMERS
Insurance
Portfolios
Before we go into insurance, you may want to look into
banking your baby’s cord blood. This is considered a form of
insurance that you can only “activate” during delivery. You can
either store it privately or donate it to save lives.
Now, imagine you are travelling with your child in an airplane.
Suddenly, the aircraft loses pressure and oxygen masks drop
from the ceiling. What do you do first? Do you put on the
mask for your child or on yourself? Of course, you would
put it on yourself first so that you will remain conscious to
take care of your child. Therefore, parents should always
insure themselves adequately first before the child. It’s just
like insuring the goose that lays the golden eggs. I have
seen some babies who have more insurance coverage than
their parents. What if something happens to the parents,
the income providers? None of the child’s insurance plans
can provide even the basic necessities. Let’s assume that
your own insurance portfolio is taken care of and you want
to determine how much more income protection you need
to ensure your child’s financial security. Just ask yourself
how much living and educational expenses your child will
need every month. If we take $1,000 a month, that would be
$300,000 for the next 25 years excluding tertiary education!
This shortfall can be easily covered with a low-cost term
protection as our children only need our support until they
they are financially independent.
So, how about life coverage for children? Any life insurance
bought on the child’s life can be treated as a gift to the child
by securing the low premiums throughout adult life. Most
importantly, any insurance payout due to the child’s disability
or illness can come in handy because the parents would have
a choice to stop working to support the child both physically
and emotionally for a period of time without financial strain.
1
According to the Ministry of Health statistics , the group
with the highest rate of hospital admission for children is
from zero to four years old. Hence, medical plans that cover
hospitalisation and surgery are like breast milk to a baby. It
is better to purchase this early because of the strict health
requirement compared to other types of insurance, even for
adults. One of the main causes of children’s hospitalisation
is accidents and injuries. Nowadays, insurers have included
common infectious diseases such as hand-foot-mouth and
even dengue fever in their Personal Accident plans specially
designed for children.
The final category is perhaps the most interesting. That’s
the prenatal insurance that covers a comprehensive list of
pregnancy complications for mother and congenital illnesses
for baby. But the most valuable part of the plan is that the life
assured of the insurance can be changed to the child upon
delivery without any evidence of good health. Do take note
of the transfer period for this guarantee.
www.fpas.org.sg
Government
Incentives
Other than the Cash Gift of the Baby Bonus, the Children Development
Account (CDA) comes in very handy to stretch your dollar. The government
will match your savings dollar-for-dollar up to a cap depending on the
birth order of the eligible child. It is like an investment that gives you a
100% guaranteed return. You cannot get this anywhere else! Although
the monies cannot be withdrawn in cash, it can be used to pay for
expenses incurred in many approved institutions and programmes such
as education and healthcare including child care. Do not worry about
unused balance in your child’s CDA as the remaining monies will be
transferred to the Post-Secondary Education Account (PSEA). You may
continue to contribute to the PSEA and still receive the Government’s
matching contributions subject to the contribution cap. The funds in the
PSEA can be used to pay fees at approved institutes and programmes
even for the child’s siblings. Subsequently, any unused funds will be
transferred to the account holder’s CPF Ordinary Account.
For the Medisave Maternity Package (MMP), do remember to keep all the
receipts of your pre-delivery medical expenses such as consultations and
ultrasound for withdrawal up subject to a limit. On top of this, Medisave
grant is also deposited into your baby’s CPF Medisave Account.
There are three income tax benefits to reduce your tax obligations. They
are Qualifying Child Relief (QCR), Working Mother’s Child Relief (WMCR)
and Parenthood Tax Rebate (PTR). The QCR can be used by one parent
only and the WMCR allows a proportion of a working mother’s earned
income to be exempted from income tax. The PTR can be shared between
you and your spouse.
As for paid leaves, working mothers have their Maternity Leave while
working fathers have their Paternity Leave. Fathers can also share a
limited part of their spouse’s Maternity Leave subject to the agreement
of their spouse. In addition, you and your spouse are each eligible for
Paid Childcare Leave and Unpaid Infant Care Leave.
Out of all the above, only the QCR is available to all income earners while
the Medisave Maternity Package is available to Singapore Citizens and
Permanent Residents only.
1 https://www.moh.gov.sg/content/moh_web/home/statistics/healthcare_
institutionstatistics/hospital_admissionratesbyageandsex/Hospital_Admission_Rates_by_
Age_and_Sex_20111.html
17
Education
Planning
First and foremost, remember this: you can take a loan for
education but not for retirement. And relying on children is not
a prudent retirement plan.
Tertiary education is another big ticket item. The total cost varies
depending on where the school is. Tuition fees for medicine
and dentistry cost more. Sending your children overseas will
also incur more expenses like living costs. Make sure that the
education fund is ready before the beginning of your child’s
academic year. I have come across a couple who bought
education plans for each of their three children, and all of them
matured up to six years too late.
The term “Education Plan” was coined by the financial industry to
market plans for accumulation. What if you rely on a single plan
for education and it “fails” to deliver the returns? Therefore, you
need not allocate a specific plan just for education. Be it bonds,
endowment, unit trusts, stocks or property, any instrument
can be for education as long as you have a diversified growth
portfolio. By the time your child needs it, you can decide which
asset class to draw from.
For equity-based instruments like unit trust and stocks,
remember to lock in the profit at least five years before your
child enters university to protect the fund from any downside.
For insurance-based plans, the projected values can be subject
to change. The key merit of using insurance-related instrument
is that if the payor (parent) meet any crisis (death, disability,
disease, etc.), the accumulation will automatically continue till
the end of the tenure. Of course, the certainty of the funding can
be done in other ways, like insuring the payor for the maturity
amount.
Occasionally, parents would use their CPF Ordinary Account
for their children’s education subject to limits. Under the CPF
Education Scheme, the child has to repay the loan to the parent
in cash, not CPF, including interest based on the prevailing rate.
There is no best plan. Every choice has its inherent advantages
and disadvantages. The most important thing to bear in mind
is the flexibility and sustainability of your strategy. What if you
need to stop the plan due to unforeseen circumstances such
as pay cut or change of industry? Avoid rigid strategies that
commit you over the long term. Do start early to take advantage
of the effects of compounding and reduced risk with a longer
time horizon.
18
Wealth
Distribution
Under the Intestate Succession Act (ISA) in Singapore, your
legal spouse automatically becomes a beneficiary of your
estate (assets upon death) upon marriage. Your estate will be
shared equally between your spouse and parents. However,
this changes once you have children. By default, your parents’
share will be replaced entirely by your child. In other words, your
parents get nothing.
Personally, I belong to the sandwiched generation where my
parents are financially dependent on me for their retirement.
Under the ISA, all my assets will go to my spouse and children
by default. I cannot imagine how my parents are going to ask
my wife for money and my wife has to decide how much to give.
In rare cases, the situation gets worse if both parents pass on at
the same time. The entire estate will go to the children with legal
issues of who the guardians and trustees would be. The courts
will then decide without your instructions and preferences. It
can be a messy affair when large sums of money are involved.
Another issue is that you might not want your children to lay
their hands on the money straightaway at 21 years old as they
might not be financially matured. All these situations can be
avoided through estate planning where a Will is commonly used.
For CPF Accounts, the Public Trustee will hold the funds for minor
beneficiaries till 18 years old for nominated monies and 21 years
old for un-nominated monies. A good financial planner can
coordinate between CPF nomination, insurance nominations,
property transfer and Will to ensure an efficient and effective
distribution process.
May 2015 Financial Planning Association of Singapore
CONSUMERS
t
CheckLis
rents
a
P
ime
T
t
for firs
)
r & Home
a
C
(
g
n
fi
o
s
Child Pro
nt Expense
e
r
r
u
c
e
R
&
One-Time
y)
nts (Priorit
a
W
&
s
d
e
Ne
Budgeting
Portfolios
blic)
ivate or Pu
r
P
(
k
n
a
B
d
s
Cord Bloo
oth Parent
B
r
fo
n
io
t
otec
aby
Income Pr
r Mum & B
fo
e
c
n
a
r
u
s
Prenatal In
o for Baby
li
fo
t
r
o
P
e
Insuranc
Insurance
Government
Incentives
re-deliver
Package (P
)
y Receipts
aternity
Medisave M
Benefits
x
ave
a
T
e
m
o
c
In
Unpaid Le
&
id
a
P
,
y
it
Patern
Maternity,
Wealth D
istribution
ing
Will Plann
ation
CPF Nomin
n
Nominatio
Insurance
ING
EDUCATIO
N PL ANN
ent
Vs Retirem
stainability
u
S
&
y
it
il
Flexib
e
tion Schem
a
c
u
d
E
F
CP
Conclusion
What we have discussed form only part of the full spectrum of personal finance, so taking a wholesome approach towards wealth management
is crucial. It’s always best to review your overall financial position because the arrival of a baby could change your financial circumstance quite
drastically. Your financial planner should be able to customise a holistic strategy that will match your unique situation to fulfil your financial
aspirations.
Last but not least, avoid investing too much on your first child. You will not know if or when the second child is coming. Children may be
financial liabilities but parenting is priceless. Happy Parenting!
www.fpas.org.sg
19
Critical illness insurance—
what’s New?
Derek Liang, CFP®
David Lee, AFP
CM
The landscape for critical illnesses has changed with effect from 1 February 2015.
All newly issued Critical Illness (CIs) insurance plans in Singapore have been updated to the new
definitions spelt out by the Life Insurance Association Singapore (LIA Singapore).These new definitions
apply to the severe stages of 37 common CIs to reflect advances in clinical practices, medical science
and technology. This standardisation in definition across the various insurers will ensure greater
transparency across different insurers’ plans and give greater assurance to claim results.
In addition, the LIA guidelines also allow insurers to provide more than the previous 30 CIs in their
plans, with one major insurer covering as many as 43 severe CIs. Another major insurer, on the other
hand, chose to maintain the original 30 CIs. Here are the numbers of CIs offered by different insurers
extracted from their websites.
Prudential
AIA
NTUC
Income
Manulife
AVIVA
Zurich
AXA
Great
Eastern
Tokio
Marine
Friends
Provident
36
43
30
37
36
38
37
37
36
30
Is more ‘Critical Insurance Cover’ the
merrier?
the 10% of illnesses are uncommon, the likes of paralysis, severe
deafness and blindness, major organ transplant, etc.
ritical illness insurance started in 1983 in South Africa
covering only four conditions—cancer, heart attack, stroke
and coronary artery by-pass surgery. Since then, it has been
widely adopted as a form of insurance coverage worldwide.
Another very imperative change is that LIA now allows individual
insurers to increase their critical illness coverage beyond the
standardised 37 definitions from the previously limited 30 Critical
Illnesses. We will be discussing some of the examples here:
In Singapore, Great Eastern launched its first CI plan in 1987 with five
conditions covered. Today, LIA publishes 37 CIs. The Guardian cites
the largest list of conditions covered in the UK at 166 conditions!
AIA introduced five non-standardised conditions namely
Elephantiasis, Creutzfeld-Jacob Disease, Necrotising Fascilitis,
Progressive Supranuclear Palsy, and Severe Myasthenia Gravis.
Besides that, another example from Zurich is the introduction of three
non-standardised conditions such as Chronic Adrenal Insufficiency
(Addison’s Disease), Chronic Relapsing Pancreatitis and Myasthenia
Gravis. These are the results of the increased flexibility for insurers to
innovate and make the insurance market more competitive.
C
It is amazing that 30 years on, the leading cause of claims today
remains as cancer, heart attack, coronary artery bypass, stroke and
kidney failure, accounting for over 90% of all claims, and yet exactly
covered by the original CI plan in 1987. However, that doesn’t mean
20
May 2015 Financial Planning Association of Singapore
UP
UP
9%
up from 73 in 1990
84
years
7%
up from 78 in 1990
But the health risks are also greater...
KNOW THE RISKS
Top 5 causes of death in Singapore in 2011.
These make up
79%
of all deaths
CANCER
28.5%
HEART DISEASE
23.5%
PNEUMONIA
15.7%
STROKE
8.4%
LUNG DISEASE
2.5%
HEART DISEASE KILLED
HEART DISEASE KILLED
3,846
2,860
THE TOP
TOP 33
THE
KILLERS:
KILLERS:
CANCER KILLED
5,382
CONSUMERS
80
years
#2
#2
IN 2011
PNEUMONIA KILLED
#1
IN 2011
#3
IN 2011
Source: http://www.greateasternlife.com/sg/en/corporate/infographics/2012/protectiongap.jsp
KNOW THE COSTS
Understanding the costs today and tomorrow.
What about the definition revisions?
AVERAGE COST OF TREATMENT
Equally important is the number of conditions covered is their definition. Of the 37 critical illness definitions, 21 conditions remain unchanged
and 16 conditions were revised.
S$30,000
Average cost of treating
S$25,000
top five diseases:
The following table lists conditions
with updated definitions as compared to their formerthe
definitions.
We will discuss the top four causes of
death in Singapore which are cancer, pneumonia (lung disease), heart attack and stroke.
S$11,126
S$20,000
Critical S$15,000
Illness
Definition changes
The definition includes a few new exclusions for example having borderline
S$10,000
malignancy, any degree of malignant potential, and suspicious malignancy. The
S$5,000
Cancer
definition becomes more well defined between what is potentially malignant to
S$350
S$300
www.fpas.org.sg
S$250
LU
NG
DIS
E
AS
E:
7
,2 6
$6
:S
RO
KE
PN
EU
MO
NIA
No Changes
S$
00
:S
UR
E
Introduced new exclusions such as angina, heart attack of indeterminate age,
ST
FA
IL
RT
HE
A
AVERAGE COST OF A WARD
Stroke
$7,
$2
:S
38
Heart Attack
S$400
0
one that is certified malignant
$1
2 ,5
CA
NC
ER
:S
Lung Disease
2 ,5
19
7,3
0
9
0
and a rise in cardiac biomarkers or Troponin T or I following an intra-arterial
cardiac procedure including, but not limited to, coronary angiography and
What it could cost in 10 years.
coronary angioplasty.
An additional clause for
the "permanent"
definition which defines the stroke
Projected
costs
S$350 2-Bed Ward,
definition is added to elaborate more accurately
what
"permanent" means.
Private Hospital
138%
INCREASE
21
S$253
S$225
B1 Ward,
Public Hospital
FINDINGS:
AIA HEALTH MATTERS SURVEY
In March this year, the AIA Health Matters survey, pulling together responses from 508 Singaporeans, aged between 40 and 70 years,
uncovered alarming findings:
508 ADULTS
AGED 40 - 70
35%
1 in 3 believes they will need to
downgrade their standard of living
should they be afflicted with a
critical illness in the future.
30%
1 in 3 does not have CI cover.
Of those who do, almost half
bought it more than 10 years ago.
BETWEEN THOSE AGED 60 TO 70 YEARS
56% 1 in 2 does not own a CI plan
OF THIS 56%:
49% will have to rely on personal savings to
pay for healthcare expenses.
52% will have to rely on their salary to pay
for healthcare expenses.
Source: http://www.straitstimes.com/aia-prime-critical-cover
It is important for the industry players to
review and standardise the definitions of
critical illnesses because of their varied
nature and commonality of claims. For
instance, consumers who purchase the
insurance policy from company A is rest
assured to be able to claim against the same
illness should he buy from company B. He or
she should not be at a disadvantage.
This implementation also allows various
insurance companies to be able to price
their premiums more competitively as the
benchmark has been set equal amongst
them which allows consumer to make a
better decision of which plans are much
better priced.
Are the definitions getting
stricter?
Since 2003, Life Insurance Association of
Singapore standardised the definitions
for critical illness and number of covered
illnesses
across
different
insurance
companies. This was done to provide greater
transparency and elicit confidence among
22
consumers when buying insurance with
critical illness coverage.
markets can give us a sense of where our
local market may be heading.
In the current 2015 revision, we notice that
it adds clarity to the intended scope of
coverage. As a result, we see some additions
in the exclusions of some conditions.
In the UK, standardisation of definitions by
the Association of British Insurers (ABI) of 30
critical illnesses probably dates back as early
as 1999. Since then, there have been several
revisions to the definitions, with the latest
definition revision on 30 critical illnesses
similar to those in Singapore.
Definitions which are more onerous
means some have more exclusions but
not necessarily bad. When insurers have a
better clarity of what they are covering in
accordance with the latest advancement
in medical diagnosis and treatment, then
they can provide the coverage at the most
accurate pricing.
For instance, if the definition of a cancer
condition is stated outside the stage to what
it is intended to cover, more claims will be
released and the increased product pricing
will be passed to those consumers who only
seek late stage cover.
Outside the shores of Singapore
In Australia, CI insurance otherwise known
as Trauma Insurance frequently covers more
than 40 conditions, with partial pay-out if
the condition suffered does not meet the
definition for a full pay-out. This is similar
to the early stage CI plans our local insurers
offer.
In Canada, CI Insurers compete not only by
number of conditions claimed, but some
provide a return-of-premium if the insured
did not claim after a number of years. Other
insurers return the premium paid for a CI
Insurance upon death.
Understanding how CI Insurance function
in some of the more developed insurance
May 2015 Financial Planning Association of Singapore
When you do a review with your financial consultant, be sure that
you have adequate level of critical illness coverage? This goes
beyond the sum assured of your plan, but also the number of
common CI coverage. In addition, frequently, consumers confuse
CI insurance with hospitalisation insurance, or question if both are
required.
While hospital insurance settles the costly hospital bills when
clients are diagnosed and receive treatments, CI Insurance provides
the income replacement necessary to meet the family expenses
and also service the mortgage in our highly leveraged Singaporean
families.
In addition, there is an increase need to protect against early stage
illness today. With the revised definitions, early stage critical illness
insurance helps to deal with medical conditions that are less severe,
for example, cancer at the benign stage. Consumers will definitely
benefit from this cover which will help to ease financial burdens
caused by the auxiliary medical cost due to early stage treatment. It
is also likely that in the near future, early stage CI will be subjected
to standardisation of definitions by LIA Singapore or get additional
cover.
Reload your existing critical illness cover today so that your
insurance pay-out can be right on target to deal with dreadful
financial losses that come with those unforeseen events when
illness strikes.
1 Media Release, “LIA Singapore introduces updated Critical Illnesses benefit guidelines to meet changing needs of
policyholders.” 1 August 2014.
2 Extracted from their product brochures from their websites. Accurate as of 6 February 2015.
3 Source: https://www.moh.gov.sg/content/moh_web/home/statistics/Health_Facts_Singapore/ Principal_Causes_of_
Death.html
TM
TM
Helps you
relax and
sleep at
night
Non-Drowsy
Formula
Helps you
de-stress
during the
day
CONSUMERS
What should you do as a consumer?
RETIRING ON “JUST”
A PROPERTY PORTFOLIO
Mr Sammy Chiu Sung Kee, CFP®
F
or investors who are experienced
aspects that you need to consider are as
is usually on rental return rather than the
property buyers, particularly those
follows:
capital gains. So the properties involved
who have purchased one or several
investment properties before, a
can be at the lower end of the scale (cheap
•
question that often crops up is “Can you
actually retire on a property portfolio?”
By definition an ‘investment’ property is
defined as a property that is not occupied
by the owner, and is bought specifically to
generate profit through either rental income
•
and/or capital gains. So, can you retire on
purely a property portfolio relying on rental
What is required to retire on
purely a property portfolio?
How many properties do you
need to own? Or what is the
value of the property portfolio
required?
with relatively high rental). The ultimate
goal is rental yield – which is defined as the
gross rental income divided by the purchase
price of the property. The general aim is to
create a large portfolio of ‘positively geared’
properties.
From a retirement perspective,
what are the benefits of a
property portfolio?
‘Positive gearing’ means that the rental
related expenses. Hence, the rental income
income and capital gains?
•
What are the cons?
The simple answer is YES. However, it is
•
Is property the only portfolio
recommended for retirement?
income must be sufficient to cover mortgage
payments, as well as all property and rental
from tenants is effectively used to ‘amortise’
important to understand the advantages
and disadvantages of such an approach.
Logically and practically it is conceivable that
you can own enough properties in order to
simply retire on the passive rental income
generated by those properties.
However, it is not that simple, and the other
24
the mortgage.
Over time, with the accumulation of more
Delving into each of this aspects a bit more
positively geared properties and with the
will ensure that we get the full picture.
added bonus of appreciating property
WHat is required to retire
on
purely
a
property
portfolio?
When
creating
a
property
portfolio
specifically for retirement income, the focus
values, the portfolio will accumulate equity
and with sufficient scale, the portfolio can
then be restructured upon retirement to
rid all or most of the debt to leave behind a
passive rent income stream for the retiree.
May 2015 Financial Planning Association of Singapore
specifics for each investor. The answer is mainly driven by how much passive
income you require during retirement and the rental returns of the property
portfolio created. The returns on rental properties can vary greatly depending
on location, time of purchase, configuration of the property, etc. The
purchase price for the same level of rental income can also vary tremendously
depending on many other variables, including factors such as rental demand,
p
r
o
s
• You Are The Boss
• The Effect Of Leverage
• Rent Receive As Passive
Income
• Rental Income Can Be
Inflation Proof
• Tax Advantages
c
o
n
s
•
•
•
•
•
•
potential for capital gains, demographics, availability of housing stock, etc.
How many rental properties do you need to retire on? The number of
properties is not that important. What is important is the total amount of
the rental income receivable. Assuming that you have restructured your
portfolio to clear all debts, the cash flow from your remaining properties
less any provisions for property management, voids, maintenance and other
outgoings, will become your passive income stream during retirement.
Generally the higher the average rental return of the property portfolio the
smaller the portfolio size required to generate the desired level of rental
income needed for retirement.
What are the ‘Pros’
of a property
portfolio?
YOU ARE THE BOSS
When you choose to invest in an income
property portfolio you will undoubtedly
have greater investment autonomy. You
effectively become your own boss. You can
choose what location to invest in, you may
even choose your own tenants, you get to set
the rent price and terms, and you ultimately
get to decide how to manage and maintain
the property as a whole.
Compare this to an investment in a stock
or mutual fund. Although you can choose
what stock or mutual fund to invest in, you
are still allowing someone else to manage
and control your money. Add this to the fact
that property is a tangible asset that you can
see, touch and feel—and you suddenly see
why property is such a popular investment
option.
Essentially
with
a
property
investment portfolio the investor has greater
scope to influence investment performance.
This may suit the preference of some retirees,
who may want to remain active in their
www.fpas.org.sg
CONSUMERS
How many properties are required to do this? This really depends on the
Property management
Bad tenants
Voids
Large outlay & illiquid
Limited diversification
Sensitive to interest rate
risk
investment during retirement, but not the
portfolio, this growing equity can be tapped
case for others.
to fund more property purchases and hence
greater diversification.
ABILITY TO LEVERAGE
One of the greatest advantages of investing
Flexibility in today’s mortgage products
in property is leverage or, in layman’s terms,
also generally allow property investors to
you can invest a relatively small amount of
access both fixed and variable mortgage
your own cash and borrow the rest from a
rate options, as well as various mortgage
lender to fund your investment. Generally
term lengths. Again these options can
the highest ‘loan to value’ ratios in lending
help maximise leverage and/or reduce the
are made available to loans for property
loan’s exposure to interest rate risk. Also
purchases. This is mainly because the loan
unlike borrowing for stocks – there are no
is relatively safe—being secured against the
margin calls. Because property is illiquid
property itself—hence the term ‘mortgage’.
and requires a long selling cycle, it is relative
Although it is usually harder to borrow
stable compare to financial assets. So, a key
money for an investment or rental property
advantage of investment property is that
than for your own residential home (usually
it allows you to benefit from the potential
resulting in either higher interest rates or
appreciation of a highly leverage asset.
lower lending limits), property loans often
enable investors to borrow against the
PASSIVE INCOME
‘equity’ they have in their properties. This
Another key retirement benefit that a
‘Equity’ value is represented by the current
property asset brings is rental income. This
market value of the property less any
passive cash flow stream generates regular
remaining mortgage owing. This value can
income allowing the ‘post-work’ retiree to
be built up over time as the property owner
‘put his feet up’ and simply ‘collect’ the rent
pays off the mortgage, often with the help
from his properties. Although not fully
of the rental income stream from the tenant,
guaranteed compared to an annuity, or
and also as the market value of the property
other financial instrument such as interest
appreciates. When building a property
payments or dividends, rental income can
25
still be predictable enough to rely on during
retirement—especially
if
the
property
portfolio is diversified and broad enough
so that a void in one property will have
minimal impact on the retiree’s income. As
discussed earlier the main question is how
VACANT PROPERTY
WHAT ARE THE ‘CONS’
OF A PROPERTY
PORTFOLIO?
A vacant rental property or “voids” is what
every landlord dreads. No money coming in
means no income or, worse still, you have to
make any mortgage payments out of your
own pocket if the property is not fully paid
generate sufficient rental income to cover
PROPERTY
MANAGEMENT,
UPKEEP AND EXPENSES
Generally, the management of a rental
is ‘location’ risk. An over-supply or under-
your retirement requirements?
property requires a degree of administration
demand in rental properties may develop
effort, such as organising the legal work
in certain geographies. One way to mitigate
big a property portfolio do you need to
INFLATION PROOF
for. The specific risk in relation to properties
relating to the rental agreement, payment
some of this risk is to have a diverse property
Anyone who has rented a property will
and connection for utilities, finding and
portfolio. More importantly an emergency
know that rents can rise! Rents will generally
interviewing
the
fund should be established to support the
increase with the value of the property over
rental deposit or bond, managing any
retirement property portfolio to enable you
time. Hence, rental income offers some sort
furnishings and ensuring that the property
to survive long vacancies. If you do not have
of protection against inflation. Unlike income
is well maintained. Not every retiree may
one, you may find yourself scrambling to pay
payments from an annuity stream, in which
be comfortable having such responsibilities
‘rent’ to the toughest landlord of all—the
the regular payments are fixed in ‘nominal’
during retirement. However the property
bank!
terms and so the value of such payments
management
may be eroded with rising inflation.
contracted to a third party agent, albeit at
EXPENSIVE AND ILLIQUID ASSET
However, rents do not always move up. They
a cost. As a ballpark, generally at least 5% of
In Singapore, residential property rental
can also be subject to the forces of supply
the rental income would be required as a fee.
yields currently between 2.35 and 3.0%*. This
and demand, and may have to be adjusted
While it may present a tax deduction against
means that one would require substantial
downwards to maintain occupancies. So this
income, unexpected expenses, such as a
investment capital to generate sufficient
benefit may be offset by the risk of vacancies
major plumbing repair, are not exactly what
passive
(where there is no rental income at all).
you want during retirement. Even if you are
Hence, despite its advantages in leveraging,
a handy person who can save by attending
property is still a relatively expensive asset,
to most minor property repairs, this is hardly
especially when compared to liquid financial
ideal during retirement.
instruments such as bonds, stocks, mutual
TAX ADVANTAGES
Rent as an income stream also has inherent
tenants,
function
managing
can
be
sub-
tax advantages. For Singaporean investment
properties—expenses
such
as
interest
rental
income
for
retirement.
funds, ETFs and others.
BAD TENANTS
from the property mortgage, property tax
Bad tenants can mean unpaid rent or rent
Lumped with high transaction costs such as
payable, insurance, repairs and maintenance,
in arrears, neighbourhood complaints, and
stamp duty, legal fees and real estate agent’s
the cost of finding and securing a tenant,
unauthorised sub-letting of your property.
fees, properties can be relatively difficult
property management fees, furniture and
They have a tendency to increase your
to acquire. In order to build a diversified
fittings, utility expenses and even internet
unexpected expenses and maybe even
property portfolio one may need to buy in a
connectivity charges paid on behalf of
threaten you with a lawsuit. Even worse,
variety of geographical locations, locally and
tenants can be tax ‘deductible’ from rental
‘bad tenants’ can mean ‘illegal activities’ or
internationally, and perhaps across different
income. Furthermore, if your investment
the destruction of your valuable property.
property
property is an international property located
As with other property management and
residential, apartment, houses, etc). Unless
in certain jurisdictions such as Australia,
maintenance issues, the potential headache
you have a large amount of investment
India or the US, where depreciation on
of managing tenants can be outsourced to
capital, this may be out of the reach of most
the property may also be expensed and
a property management agent (at a cost).
investors.
any tax losses on the investment property
However, having a property manager does
maybe offset against other income sources.
not mean that you will be immune to bad
Furthermore, property can also be relatively
Hence, the property investment can be used
tenants—they may still have a negative
difficult to sell. Property is generally an illiquid
specifically as a tax minimisation strategy
impact on your retirement cash flow.
asset that demands a long selling cycle
(also commonly refer to as negative gearing).
26
segments
(e.g.
commercial,
before it can be liquidated and turned into
May 2015 Financial Planning Association of Singapore
CONSUMERS
cash. You also cannot simply sell off a
bedroom if you need access to some
cash in a hurry. This can cause a major
risk whenever one needs to raise cash
via a quick property sale. A forced (or
rushed) ‘fire sale’ is unlikely to achieve
the best price for a property, especially
if in the midst of a down market and
you are unable to unload your home
for a reasonable price, if at all. Unless a
retiree holds a substantial cash buffer,
these risks can be amplified with a property
only portfolio during retirement.
LIMITED DIVERSIFICATION
We touched on ‘location’ risk earlier,
you cannot invest in bonds or shares via a
an illiquid asset such property can be risky,
property. There will always be exposure to
especially if cash is suddenly required due to
property ‘market’ risk. Therefore, if property
unforeseen developments. So, any property
is your major investment you may have little
only retirement portfolio must be supported
or no diversification.
by substantial cash holdings as a buffer.
Furthermore, having everything in property
and reduced rental demand in certain
SENSITIVE TO INTEREST RATE
MOVEMENTS
areas. This risk can be reduced by having
Because leverage (the use of borrowed
a broad property portfolio diversified
basket’. This can be highly risky, especially
funds) is generally associated with property
over geographies. However, the portfolio,
during retirement, when your ability to
investment (one of its pros as discussed
if only based in one country, maybe still
remedy and adapt to market downturns
earlier), property portfolios can be sensitive
be exposed to social/political risk (e.g.
may be limited.
to any movement in interest rates. If your
such as government policies to dampen
investment loan has a variable interest
property demand and house prices). Of
One way to help with some of the
rate, there is always the risk of economic
course you can diversify this further with an
diversification and liquidity challenges
conditions causing interest rates to rise. If
international property portfolio. However,
of property is by investing in REITs (Real
not properly budgeted for, rising interest
once
international
Estate Investment Trusts). REITs can invest
rates could cause investor financial stress
properties, you may become expose to
directly in a more diverse range of property
where liquidity and the need to quickly sell
currency risks. Currency or exchange rate risk
segments or mortgages. It is also traded
a property may arise. Hence any increase in
is a form of risk that arises from the change
like a financial instrument on exchanges
interest rates will further reduce the liquidity
in price of one currency against another.
and is therefore more liquid. Although you
in properties.
can diversify better with REITs, all your eggs
specifically relating to potential over-supply
you
venture
into
With international properties you will also
assets makes diversification difficult. You
are in essence ‘putting all your eggs in one
are still effectively in the property ‘basket’.
be potentially exposed to unfamiliar local
Also, those with fixed interest rate loans are
market valuations and market rent, complex
Therefore, from a diversification view point,
not entirely immune as the rates are usually
financing options involving foreign currency
having your retirement portfolio tied to
fixed for a certain term only (and usually
mortgages, local property ownership laws
property, or any other single class of asset
at a higher interest premium). Although it
and landlord obligations, and potentially
for that matter, is fraught with risks and is
provides a short term buffer, any increase in
complicated ‘non-resident‘ tax implications.
not recommended.
interest rates will still impact on a fixed rate
Hence, there appears to be substantial costs
loan eventually.
in diversifying a property portfolio.
Furthermore, the key weakness in relying
on property in retirement is that you cannot
diversify out of its asset class. While you
can invest in mutual funds with a property
exposure (such as real estate investment
trusts), the vice-versa does not work—
www.fpas.org.sg
Are
property
only
portfolios
recommended
for retirement?
In conclusion, although property portfolios
can help in producing passive income, it is
not recommended that you rely solely only
on a property portfolio during retirement.
A diversified approach to investing with
several asset classes to ensure there is
adequate capital growth and income
generation is recommended.
*You wouldn’t own a Singapore condominium
for rental yields. (2014, May 17). Retrieved from
http://www.globalpropertyguide.com/Asia/
singapore/Rental-Yields
Holding all your retirement net-worth in
27
Planning right TILL
the end
Mr Joseph Paul Kennedy, CFP®
Mr Ching Kwang Weh, AWPCM
While the nation turns 50 and we are We highlight the following three areas of expenses:
celebrating SG50 and enjoying all its festivities,
we also know the stark reality that our
Cost associated with final rites and customs
population is ageing and with that we will see
an increase in the number of deaths per year.
Cost to distribute estate
If you have read the title and are still reading,
congratulations! You are apparently willing
to face this often taboo topic that should be
Outstanding liabilities at the time of death
incorporated into your financial planning. We
set out to explore the types of costs associated
with death in order for you to plan effectively.
1
Cost Associated with Final Rites and Customs
H
ow much does it cost for funeral rites? It will depend on the specific religion, culture and
wishes. We heard anecdotes of funeral services costing more than $1 million in Singapore.
At the other extreme, someone could pass on in the morning, be cremated in the afternoon
and have their ashes scattered in the sea from a boat within the very same day for approximately
$2,000.
Estimated
Range Of Costs
For Final Rites:
Costs will depend on the scale of the services such as the number of days for a wake, prestige of the
venue, flowers, casket, caterer, choice of final resting place, and more minus any donations given to
the family.
$2,000
to
$30,000
Below is a table of typical costs based on cultural and religious practices. Use this as a guide to help you decide what costs you can
expect to pay.
Religion
Buddhist/Taoist
28
Type of Expense
Cost
Funeral service package
$5,000 to $7,500 . It can be much
higher depending on wishes.
Tablet/Urn/Niche in
public columbarium
$500 to $1,000
Table/Urn/Niche in
private columbarium
6,000 to $20,000
May 2015 Financial Planning Association of Singapore
Muslim
Christian / Catholic
Hindu
Type of Expense
Cost
Funeral service package
$1,100 to $1,300
Cemetery burial fee
$315
Funeral service package
$1,600 to $13,000
Donation for service
According to wishes
Rental of parlour at church
Discretion of church
Funeral service package
$3,800 to $6,500
CONSUMERS
Religion
* Costs were obtained from selected funeral service providers.
Cost to Distribute an Estate
The cost of probate proceedings, used to complete the distribution
of the deceased’s estate, will depend on whether or not you engage
a lawyer, trust company or decide to adopt the do-it-yourself (DIY)
approach. In 2015, the Courts restructured and probate matters
2
now come under the jurisdiction of the Family Justice Courts.
3
Court fees listed on the Schedule for probate matters increase if
the value of the estate is more than $3 million and are dealt with
in the Family Court as well as if it is dealt with in the High Court,
Family Division (also under the Family Justice Court). Certain fees
in the High Court are more expensive if the estate’s value is above
$1 million.
If you consider doing it yourself, the cost can be as low as $400
and escalates to $2,000 depending on the Court and the value
of the estate. However, DIY may be tedious and time consuming
for a novice, since one may need significant amounts of time and
energy to settle a complex estate.
Thus, hiring a professional may be more practical for busy
Singaporeans. The cost of professional services will often range
from $4,000 to $7,000 depending on the Court undertaking the
matter and the value of the estate. This price range is only a guide
and you will likely be able to find rates outside of this range.
For those of you who do want to embark on the process without
professional expertise, you can expect to find a “Probate and
Administration Toolkit” on the Family Justice Court website. Due to
the restructuring of the Courts and website, it was not available at
the time of our writing but we were told it will return soon.
www.fpas.org.sg
Estimated
Range of Costs to
Distribute Estate:
$400
to
$7,000
29
Outstanding Liabilities at the Time of Death
Debts left by the deceased will not just go away. Arrangements must be made with each creditor
to take care of the outstanding debt. Some common types of liabilities and their associated risks
include the following:
•
Property and Auto loans – these are usually the biggest liabilities for a family. You could be
subject to a bank foreclosure in the event that the housing loan is not successfully serviced.
You may be given more flexibility if it is an HDB loan. A car could be repossessed too if
financing terms are not met.
•
Credit card debt – Credit card debt may be waived in some circumstances depending on the
internal policy of the institution and the balance amount. However, this is not guaranteed.
Deceased
•
Taxes – This liability is not waived and must be settled from the deceased’s estate
Liabilities
•
Hospital/Medical bills – With MediShield Life, everyone will have access to basic hospitalisation
coverage. However, paying for large bills may still prove to be a financial burden if a higher
ward or private hospitalisation was used. Integrated Shield plans have a small “final expense”
benefit meant to offset a portion of the co-insurance and deductible in the event that an
individual dies in the hospital or within a stipulated time following a hospital stay, but
depends on the terms of the insurance policy.
Estimated
Range of Costs
to Cover Liabilities:
Difficult to Predict
but Dependent on
Recommended Actions to
Provide for Final Expenses
Enrol in the Dependant Protection Scheme (DPS) if you do not have
the plan.
DPS provides up to $46,000 up to the age of 60 years old in case of death or permanent
incapacitation. The payout can be as quick as two weeks of passing. Great Eastern and NTUC are
the current providers.
Create an emergency fund
This fund can provide your survivors with cash to pay for final expenses and to tide them over
during the transition period that could be up to a year.
Cover your liabilities with suitable insurance
Insurance is often used to cover specific liabilities. Those who are young, have dependents and
are servicing their debts with their salary should pay special care to prepare adequately. Upon
demise, insurance payouts can be a welcome lifeline used to reduce outstanding liabilities or
assist the next generation in their lifetime as a legacy.
In summary, you may want to consider using $18,000 as a starting point for final expense planning. We have simply taken the average costs
associated with final rites and customs as provided in the chart and added the average distribution costs discussed above. Alter it to match
your specific situation. The last step is to ensure that you have put in place insurance to reduce your debt to a comfortable level in the event
of your demise.
Life is a journey and in here we share a few aspects of what it is to plan for the final one!
1. Singapore Department of Statistics, Number of Births and Deaths viewed on 9 Feb 2015 http://www.singstat.gov.sg/statistics/visualising-data/
chart/number-of-births-and-deaths
2. Kok Xing Hui, “New Rules for Family Justice Courts”, Today, 1 Oct 2014 as viewed on 10 Feb 2015. http://www.todayonline.com/singapore/newrules-family-justice-courts-2015
3. Family Justice Rules 2014, Fifth Schedule, Part 4, https://www.familyjusticecourts.gov.sg/QuickLink/Documents/Family%20Justice%20Rules.pdf,
page 581
30
May 2015 Financial Planning Association of Singapore
FPAS has been actively reaching out to the Consumers to educate them on the
importance of Financial Planning and the CFP® Certification Mark.
Consumer Outreach Events
Event
Date
Organiser
Audience
Interview with Channel NewsAsia Money
Mind – Invest for the Future by Joseph
Kennedy & Nancy Hoon
24 January 2015
Channel NewsAsia
Channel NewsAsia
audiences
FPAS, 1 of the 12 Members in U Associate
Programme
28 January 2015
NTUC
NTUC Partners
& Members
Interview with Common Cents Episode 9:
The Prime Years – Retirement Planning by
Gregory Fok, Timothy Liew & Kee Siew Poh
26 February 2015
CPF Healthcare Talk
By Kee Siew Poh
Ask a CFP®– Retirement Planning
Panel Discussion featuring Christopher Tan,
Eric Cheng, Jeff Lee, Kimmis Pun & Steven
Ong
Channel 5 –
Common Cents
Channel 5
audiences
25 March 2015
CPF Board
CPF members
8 April 2015
NTUC – PME WEEK
NTUC Members
NEW INITIATIVES
MEMBERSHIP EVENTS
Upcoming Events
Enabling our practitioners in the continual enhancement of your skills and knowledge remains our utmost priority.
That is why we have lined up a series of CPD workshops for you.
Event
Date
Organiser
Audience
Code of Ethics
15 May 2015
FPAS
FPAS Members
Tea Time Talk
Wills & Trust
15 May 2015
FPAS
FPAS members
Workshop
Quantitative Personal Finance with Excel
22 May 2015
FPAS
FPAS members
Workshop
Turning Problems into Possibilities
3 June 2015
FPAS
FPAS members
The Associate Estate Planning Practitioner
(AEPP®) Workshop
20 & 21 August
2015
Rockwills Institute Pte
Ltd
FPAS members
Insurance-Linked Handcuff Mechanism for
Critical Employee Retention
9 September 2015
FPAS
Exclusively for FPAS
members
www.fpas.org.sg
31
CFP®
CERTIFIED FINANCIAL PLANNERTM or CFP® certification is the only globally recognized
mark of professionalism for financial planners who place their clients’ interests first.
Whether you’re seeking opportunities for networking, career development, practice
expansion or professional mobility, the Financial Planning Association of Singapore can
connect you to the most competent and ethical financial planners in the business.
With connections to 26 organizations offering certification and nearly 157,586 CFP
professionals worldwide, Financial Planning Association of Singapore, a member of
Financial Planning Standards Board, offers you a world of opportunity for advancement
in your financial planning career.
For more information, visit our website at www.fpas.org.sg, or call us at (65) 6372 1030.
CFP
Global excellence in
TM
CFP®, CERTIFIED FINANCIAL PLANNERTM
Financial Planning Standards Board Ltd. Financial Planning Association of Singapore is the marks
licensing authority for the CFP marks in Singapore, through agreement with FPSB.
www.fpas.org.sg