Meeting at Speaker's Corner 18 Oct, 6-7 pm

[Ah Hai]

HK regulator: HK suffered a mis-selling issue

Wednesday, January 07, 2009
HK regulator: HK suffered a mis-selling issue
http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/400786/1/.html

7 Jan 2009

HONG KONG: Hong Kong's securities regulator on Wednesday insisted the city's monitoring system had stood up to the financial crisis, despite criticism complex products were wrongly sold to vulnerable investors.

"Hong Kong's system has broadly worked well," said Martin Wheatley, chief executive officer of the Securities and Futures Commission (SFC). "We have not had a systemic failure."

Wheatley said the fact that Hong Kong had so far avoided the collapse of any major financial institutions or a huge fraud on the scale of disgraced US financier Bernard Madoff showed its regulatory regime had worked well.

Madoff was arrested on December 11 after allegedly admitting he had run a multi-billion dollar pyramid fraud in which individual investors, banks, charities and universities lost vast sums of money.

Wheatley conceded the city had suffered from a "mis-selling issue" over the sale of so-called minibonds backed by failed US bank Lehman Brothers.

However, he said it was too early to say if the banks who sold the products or the regulators were to blame.

Critics have accused the city's regulatory bodies of failing to protect investors from the derivative-backed products.

"We have got a problem with retail selling, we need to put that right," he said at Hong Kong's Foreign Correspondents' Club.

More than 40,000 Hong Kong investors – including many retirees – had put a total of 15.7 billion Hong Kong dollars ($2.0 billion US dollars) of their savings into minibonds and other complex products backed by Lehmans.

The collapse of the Wall Street giant in September meant the value of their investments dropped dramatically, which has sparked protests across the city from investors who said they were mis-sold the products.

The SFC and the city's de factor central bank, the Hong Kong Monetary Authority, are investigating hundreds of cases related to the sale of the bonds.
Posted by Tan Kin Lian at 8:22 PM

 

[Ah Hai]

Re: HK regulator: HK suffered a mis-selling issue

13 Comments


Anonymous Anonymous said...

Very often the issue is not the products but the sellers. Miss-selling is about the sellers, a human, a manipulative human who can turn the product upside down. Miss-selling is so common among insurance agents, the bank salespeople and unless it is stopped a lot of consumers' hard earned money will go up in smoke. The key player in this game is the regulator, the enforcer and the referee .If the game is left to be played without the referee, the salespeople and FIs will gang up to cheat the consumers.It is so clear that this has been going for so long and all the consumers' heard earned money have flowed to the pockets of the FIs and the insurance agents. It is time the tide should turn against these people.MAS has this responsibility.

January 07, 2009 8:58 PM
Blogger Tan Kin Lian said...

Hi 8:58 PM

In the case of the credit-linked notes, the issue is mainly the product.

If the product had been properly described and explained, nobody would buy it. And the distributor would not sell it.

Due to its complicated nature, and the misleading description in the prospectus, the product was mis-understood by the distributors and their sales employees. This led to mis-selling.

It makes no sense for a credit linked note to be organised with credit default swaps and a portolio of underlying assets. There are no investor or depositor who need this kind of product. If they wish to gamble, they should go to a casino.

January 07, 2009 9:12 PM
Anonymous Anonymous said...

DEAR MR TAN KIN LIAN
I salute your clear and concise point on structured products. Thanks for sticking out your neck.

I want to add. Even if the authority thinks the product is suitable, it does not mean the authority should allow it to be sold OVER-THE-COUNTER. For example: We cannot buy CONTACT LENS and VIAGRA from the Pharmacy. We need it to be prescribed by optometrist or doctor. ie no OVER-THE-COUNTER sale.

The professional who prescribes must understand clients needs, advice professionally, explain the side effects clearly etc. In addition, doctor prescribes drug based on client's need; and not based on the drug available by drug company.

From CASHEW NUT

January 07, 2009 9:29 PM
Anonymous Anonymous said...

MR TAN KIN LIAN,

[1] I salute you for posting and enlightenment.

[2] I salute Martin Wheatley, CEO of Hong Kong SFC to make the following HONEST and FRANK comment.

[a] ... Wheatley conceded the city had suffered from a "mis-selling issue" over the sale of so-called minibonds backed by failed US bank Lehman Brothers. However, he said it was too early to say if the banks who sold the products or the regulators were to blame.
... "We have got a problem with retail selling, we need to put that right," he said at Hong Kong's Foreign Correspondents' Club.

From CASHEW NUT

January 07, 2009 9:34 PM
Blogger Chan J C said...

Dear Mr. Tan

Your point is absolute concise and not arguable.

Given the two possible option that HK authority is looking into:-

1. to blame the the banks who sold the products or

2. to blame the regulators

However, maybe there is a 3rd possibility in Singapore is

3. SG investors "walk in with their eyes open seeing" such products mechanism and still buy.

Putting 1, 2, and 3 together, even someone of any age without any education would also know which statement is non-sense.

Regards

January 08, 2009 12:02 AM
Anonymous Sanity said...

Mr. Tan, I agreed with you that the issue is with the product and your analysis.

However, I personally feel that the distributors (experts) should understand the products well before they sell them to the people.

If the experts are unable to comprehend the prospectus, how can anyone expect the normal investors/depositors to do so.

Going forward and if it is true that the distributors are also misleaded, have they pursue the matters with the issuers (Morgan Stanley and Merrill Lynch? If they do, am sure alot of people will like to know the status.

January 08, 2009 2:00 AM
Blogger Tan Kin Lian said...

Hi Sanity,

I agree that the distributor has a responsibility to understand the product and to explain it correctly.

January 08, 2009 8:12 AM
Anonymous Anonymous said...

It seems dishonesty is rampant these days. Even Satyam of India has unraveled some accounting fraud . Dressing up the account or cooking up the book is so common. Don't know who to trust.
I wonder those insurance companies who are very aggressive in their marketing blitz and splurging on their agents with posh hotel meetings, wine and dine and exotic incentive trips are cooking up their books too.
When a company does that it benefits the shareholders, the senior managers and the insurance agents. The suckers are again the consumers and policyholders.

January 08, 2009 9:18 AM
Anonymous Anonymous said...

The Gate-keepers, MAS should have banned the products in the first stance as they are incomprehensible,dubious & toxic! By allowing the products to be lodged with it, MAS has given the wrong notion by implication that the products are ok.

January 08, 2009 10:45 AM
Anonymous Anonymous said...

thanks for your info. you are one stop information centre. better than any other media.

January 08, 2009 12:19 PM
Anonymous Anonymous said...

The days of insurance agents are numbered. It will be pay back time for many and for some they will have to pay many folds more than they fleeced from their customers. Some may have to serve behind the iron bars and dining and drinking (alcohol not allowed)for free. No, at tax payers' money.
Be positive. Imagine away on an incentive holiday trip and lodging in a big posh 7 star hotel or a resort by the sea. Insurance agents are good at this. They can switch on and off from negative to positive by listening to a tape or watching a video. They can fantasise. They have the SECRETS from Ronda Byrne or the Laws of Attraction.
With glib tongue and skill of lying it is not difficult to compete with the retrenched . At the worst be contented working for the fast food outfits and of course the public toilets which need people with different skills.
The day of reckoning is here and it is just the beginning.

January 08, 2009 12:26 PM
Blogger Chan J C said...

Hi Mr. Tan and Sanity

If distributor has responsibility, then how do we account for their scant rejection letters to all investors' complaint without any reason?

Regards

January 08, 2009 12:35 PM
Blogger Concerned said...

If those credit-linked products were sold directly by the orginators, Lehman Brothers, Morgan Stanley, Merrill Lynch, etc
very few people will buy it. It is sold through distributors where the local populace believed and trusted them. These institutions have a responsibility to ensure the products they distributed are good for money and not some synthetic CDOs packaged as triple A notes or bonds. Surely, those FIs would have in-house financial experts who would have been briefed by the originators of those products and evaluated the structure, risks and rewards of those products before putting them out to the public. The internal lawyers would also have looked at the prospectus and together with the internal experts made a recommendations to the management to distribute those products or not.

January 08, 2009 1:57 PM

 

[Ah Hai]

HK: Minibond saga sparks rethink of bank rules

Friday, January 09, 2009
HK: Minibond saga sparks rethink of bank rules

Enoch Yiu and Maria Chan
Jan 09, 2009
Financial Secretary John Tsang Chun-wah yesterday ordered “ an immediate review” of Hong Kong’s financial regulatory structure after both the Securities and Futures Commission and the Monetary Authority issued reports on last year’s Lehman Brothers minibond fiasco.

The government will first focus on “ administrative measures” to improve existing regulations and better protect investors. These would include a cooling-off period for buyers and restricting the sale of investment products at bank branches.

“Later we will carry out a structural review that may be required for improving the regulatory structure and protecting investors as well as other measures that need to be implemented through legislation or legislative amendment,” Mr Tsang said.

The SFC wants laws changed to give it the power to order financial intermediaries to compensate investors in the event of misselling or other irregularities.

In the longer term, consideration should be given to establishing a financial services ombudsman, both regulators say.

A government source said the administration would soon issue a consultation paper on how and when to implement short-term measures.

In the longer term, the government wanted to review the entire regulatory structure for banks’ securities businesses. This would include whether to allow banks to use their branch networks and teller staff to sell investment products.

Mr Tsang ordered the review after the government released reports submitted by the HKMA and the SFC on the minibond crisis.

When US bank Lehman Brothers collapsed in September, 43,700 Hong Kong investors were left holding derivatives it had issued or guaranteed but which had lost much or all of their value. Most were minibonds, which, despite their name, are complex, credit-linked derivatives. Investors claim banks and brokers mis-sold the products as low-risk.

The SFC and HKMA called for tighter oversight of the sale of financial products but rejected – at least in the short run – a call for a single regulator to oversee their sale.

At present banks and their securities businesses are regulated by the HKMA. The SFC regulates brokers but is also responsible for investigating and sanctioning bank staff who sell investment products.

The HKMA report recommended that all bank security business be brought under its supervision.

Both the SFC and HKMA reports said having the same bank branch sell investment products and handle client deposits created a conflict of interest.

The SFC said banks may consider establishing a clear-cut division between their banking and securities services by registering separate subsidiaries or affiliates with the SFC.

“ This is not the only way, however, that such separations of functions can be achieved,” the SFC report said.

There could be “a clear demarcation of premises and staff to avoid confusing customers as to the nature of the services being offered”.

Both reports called for introducing a cooling-off period for investors within which they could cancel their investments, as well as a requirement that intermediaries disclose the commissions they receive for selling such products.

The SFC would also require all investments to contain a brief description of the product and include a “risk reminder” for investors.

Both reports rejected calls to ban the sale of investment products without regulatory approval.
Posted by Tan Kin Lian at 10:05 AM

 

[Ah Hai]

2 Comments


Blogger Chan J C said...

"In the longer term, consideration should be given to establishing a financial services ombudsman, both regulators say."

If there isn't any wrong-doing pointing at certain government authority, why is there a need for "financial services ombudsman". This is rather obvious.

January 09, 2009 10:31 AM
Anonymous Anonymous said...

MAS should also see the current practices be changed for all financial institutions, the banks and the insurance companies, from the products check to the ways the salesmen sell and also the commission. MAS must play a more proactive role in supervising , regulating and enforcement. Look into these 4 areas the environment will be safer for the consumers.
Now the consumers are wary of the products, the RMs and the insurance agents and the FIs. MAS must see that these players play by the rules and no double standards...Stringent and regular audit must be carried out on them to ensure that they toe the line.
Better still have a watchdog to check, like the FISCA which I hope will be formed. FISCA can play a very critical role by exposing and checking on all the players including the regulator.As the whistle blower if there is irregularity.

January 09, 2009 10:36 AM

 

[Ah Hai]

Keeping seniors at work

Friday, January 09, 2009
Keeping seniors at work
Prime Minister Lee Hsien Loong spoke at the Reinventing Retirement Asia Conference organised by the Council of The Third Age. He urged “no let up in keeping seniors at work”. He said that outmoded social attitudes and systems have to change, and that seniors should continue to work beyond the customary retirement age.

I agree.

Read the rest of the article here:
http://theonlinecitizen.com/2009/01/keeping-seniors-at-work/

Posted by Tan Kin Lian at 10:45 AM

 

[Ah Hai]

Re: Keeping seniors at work

2 Comments

Anonymous Anonymous said...

I also agree with Mr. Lee. This is exemplary leadership! And the senior Mr. Lee can attest to it and is leading by example.

I think if one can work, why not? What is the worth of one's life, if not to contribute back to society?

Live to work, work to live.

Well done, Mr. Lee!

January 09, 2009 12:38 PM
Anonymous Anonymous said...

Leave it to market forces. Or what other forces?

These forces will decide whether you will be paid $1 million a year or $600 pm. Or whether you will be retrenched (or retired) at 40 or will still work at 85 and with millions per year.

Unless the gahmen employ these old people directly. Nothing said by ministers or laws enacted will change anything if the system is shaped by an open economy (free flow of capital, "foreign or cheap talent) like Singapore.

January 09, 2009 1:48 PM

 

[Ah Hai]

HK Govt;s report on Lehman Brothers

Friday, January 09, 2009
HK Govt;s report on Lehman Brothers

http://www.fstb.gov.hk/eng/minibond/HKMAminibond.pdf
Posted by Tan Kin Lian at 1:27 PM

 

[Ah Hai]

New business ideas

Friday, January 09, 2009
New business ideas
A reader of my blog is curious about my intention to publish a survey about booking for a taxi by SMS.

I am developing a new business to allow customers to book for a taxi using SMS for $1. The technology is almost ready. My survey indicate that many commuters are interested to use this service. My challenge now is to enrol taxi drivers to join this service.

I also want to develop a new business to offer surveys to SMEs at a modest cost. This allows them to gather information from their customers, business associates and employees. It helps them to improve their business.

The cost of a survey is $100. It is affordable. The value of the information is worth a lot more. Some people are familiar with the use of Survey Monkey. They can get the survey done for free. But other business owners, who are not familar with this software, have the option to pay $100 to get this survey done for them.

The curious people may also ask - why am I developing these new businessses, when I am quite well off and able to retire. I hope to pass the businesses to younger people, so that they have meaningful jobs and a good future.
Posted by Tan Kin Lian at 1:33 PM

 

[Ah Hai]

Rating of political leaders

Friday, January 09, 2009
Rating of political leaders
Rating of political leaders, based on first 50 and 100 responses.
1=low rating, 3=neutral rating, 5=high rating

Leader 50 resp 100 resp 150 resp 200 resp
JBJ 3.83 4.02 4.01 3.73
CST 3.71 3.65 3.55 3.43
TT 3.31 3.43 3.40 3.33
LTK 3.39 3.34 3.35 3.24
LKY 3.02 3.10 3.13 3.08
KBW 2.90 3.00 2.94 2.89
CSJ 2.55 2.67 2.69 2.73
GCT 2.60 2.70 2.67 2.68
SJ 2.65 2.77 2.65 2.60
TCH 2.60 2.71 2.64 2.58
LHL 2.67 2.65 2.52 2.50

Excluding lowest 4 ratings.

Most of the ratings based on 200 responses are quite close to the initial rating based on 50 responses. It suggests that the initial results based on 25 or 50 replies are quite reliable.

Posted by Tan Kin Lian at 4:00 PM 16 comments Links to this post

 

[Ah Hai]

Re: Rating of political leaders

19 Comments

Anonymous Anonymous said...

LHL is ranked lowest consistently in both responses. So what?

What really matters is he is rated highly among the PAP MPs. That's why he is PM!

Mr Tan, such ratings initiated by you are actually quite irrelevant, just like the petitions you sent to the authorities. Irrelevant because they make no impact, no difference to the course of events.

Maybe you should rethink your strategy beyond rankings, surveys, statistics, blogs and Hong Lim gatherings(you have ended it for good).

January 04, 2009 12:33 AM
Anonymous Anonymous said...

Dear Mr. Tan,

I think the survey shows the majority of the visitors to your blogg is anti-establishment.

January 04, 2009 11:32 AM
Blogger Tan Kin Lian said...

Hi 11:32 AM

I suspect that many of the visitors to my blog have lost a lot of money on the mini-bonds and other credit linked notes, and they are disappointed at the response of the authority. This makes them appear to be "anti-establishment".

January 04, 2009 11:40 AM
Blogger Falcon said...

LHL is not ranked lowest in both responses as alleged by Anon 12.33 am. It always baffled me that the country has people who cannot even analyse a simple survey yet want to criticise just for the sake of criticising. I suspect our president is the one who is ranked lowest in both responses, even though I do not have the information since it is not revealed.
I participated in the survey and surprisingly, my inputs were mirrored quite closely with the release of the survey results for 11 of the personalities surveyed.
I did not lose any money in the minibond saga. I am still actively investing all this time and still able to make good percentages in my investments. In fact, my most recent investment netted me over 40% profit and I will be collecting the profit tomorrow.
I am also not "anti-establishment".
Let me share my thoughts on why I voted this way.
JBJ has my highest rating because he has demonstrated his fighting spirit even until death. His indomitable spirit spanning decades has my highest respect and he has achieved many first, including breaking the ruling party dominance, indeed an uphill task. He has also not been indicted in any scandal or unfair or dishonest dealings. So we have an honest man, whom the PAP machinery could not uncover any dirt. What he believed and stood for is clear for anyone to see.
LKY got a slightly higher than medium rating from me because of his many past mega achievements and for what he has done for Singapore. However, his ratings got negated by the fact that his recent performance, or lack of it, especially his few major strategic political errors he has made in recent years, lowered his ranking in my mind.
TT got a fairly high ranking because of his no nonsense and steady performance but did not get the highest ranking because of his involvement with Temasek. He still got a higher ranking from me than LKY because he is not that active in making strategic errors relating to the human heart.
KBW got a relatively high rating from me than the other bigwigs because of his steady and factual approach. Somehow his ranking is lower than what I have voted for partly I think is because of the continued high costs of healthcare and means testing but I am with him on means testing but a little bit concerned with the fact that rich foreigners are able to get immediate medical attention while subsidised Singaporeans have to be put on waiting lists even for major medical conditions like cardiac problems.
CSJ got a relative high rating from me because of his never say die attitude and his sacrifice for his fellow Singaporeans even though some of his antics are also not popular with the masses and me.
LHL got a low rating from me but not the lowest, I reserved that for SRN.
LHL got a low rating from me because of his lack of leadership in the many issues that arose in the past months. I expected a sharper response from the Prime Minister of a first world country and I could not see him demonstrate that. But he is a sincere man though that is not good enough for me as I have the highest expectation of a Prime Minister.
SRN got the lowest rating from me because of the impression that I get of him just existing for the highest position in the land. In my opinion, he is not a people's president as he is not seen to be actively safeguarding the people's rights and concerns. He seems quite contented to be just saluted and accorded twenty one gun salutes on national events.
I am giving this candid appraisal in the hope that everyone who got lower ratings than they expected to work harder to win the hearts and minds of the masses and for those who have got high ratings, with the exception of JBJ, to work even harder to maintain their high ratings.
This is also for Tan KL, to let him know that his surveys are taken seriously, and not just by people who lost money or are anti-establishments or who cannot make it in life or who have money problems. There are real people out here who are logical and analytical who takes part in his surveys are are not afraid to be counted to play his part as a Singaporean.

January 04, 2009 5:44 PM
Anonymous Anonymous said...

What have JBJ and CST done to help the plight of this group of marginalised people?

January 04, 2009 7:12 PM
Anonymous Anonymous said...

To prevent this blog from creating the impression that is is becoming antigovernment, I think a lot depends on the background of those who are involved in the survey.
I may have nominated Mr Tan Kin Lian to be the hopeful president of Singapore, however, my utmost respect is always with Mr Lee Kuan Yew.

January 04, 2009 9:16 PM
Anonymous Anonymous said...

A survey is... just a survey.

Not ranking PAP ministers high = anti-establishment?

For goodness sake, all Tan Kin Lian did was open a survey, invited readers of his blog, most of whom are anonymous to him to fill up the survey.

Suppose you choose 100 random strangers from the street, ask them to complete the same survey and got the same result, are you going to conclude that the people from that street are mostly anti-establishment just because they did not rank PAP highly?

Grow up friends. A survey is just a survey. If you want to see skewed statistics that always show PAP high on the score, you can always skip this blog and just buy a copy of Straits Time.

January 05, 2009 6:37 AM
Anonymous Anonymous said...

May I know who are: CST, TT, SJ & CSJ?

January 05, 2009 9:29 AM
Blogger soojenn said...

As Falcon said of Anon 12.33 - it is baffling that the country has "people who cannot even analyse a simple survey yet want to criticise just for the sake of criticising.". Also why remain anon. My views are similar to Falcon who has succinctly describe reasons for the ratings that he/she ahs given. I am also not anti establishment. The survey is relatively balanced as you can see that LKY is among the top 5 being from the establishment. One gives credit where it deserves. LHL is a far shadow from his father. Even GCT has done better during his reign as PM. Instead of viewing this survey as a possible feedback from the people, netizens in this case, and understand the reasons behind this, you have one of these people (possibly pro establishment), who sees this as criticism and not constructive feedback.

Relevance is not the issue. It is interesting to understand how netizens view the current politicians since we will never be able to get this out from the mainstream media, especially with editors like Ms Chua Lee Hoong who profanes outright in her articles on the opposition, quoting from Singapore enquirer "the outright disrespect and contempt displayed by the mainstream media against Singapore’s opposition as exemplified by the same writer’s (Ms Chua Lee Hoong) malicious assault on Dr Chee’s character in a previous article, have ailenated and peeved many Singaporeans off, including those who are politically neutral."

009 11:11 PM

 

[Ah Hai]

Re: Rating of political leaders

Anon 12.33 also writes - "Mr Tan, such ratings initiated by you are actually quite irrelevant, just like the petitions you sent to the authorities. Irrelevant because they make no impact, no difference to the course of events."

* Why does he/she feel that this is irrelevant - to him/her only?
* What makes him/her think that there is no impact, no difference to the course of action?

Anon 11.32 writes - "I think the survey shows the majority of the visitors to your blogg is anti-establishment." - do you mean that majority of the 890,114 visitors so far to TKL blog is anti-establishment. Come on. I have also not purchased any mini bonds.

Anon 6.37 - "A survey is... just a survey.....If you want to see skewed statistics that always show PAP high on the score, you can always skip this blog and just buy a copy of Straits Time."

January 05, 2009 6:28 PM
Anonymous Anonymous said...

Especailly with Chua Lee Hoonng the writer . She is a gahmen propagandist

January 05, 2009 9:36 PM
Anonymous Anonymous said...

Dear Falcon
My wife salute your analysis - independent, logical and straight to the point.

From CASHEW NUT

January 05, 2009 10:56 PM
Anonymous Anonymous said...

The sad thing is that the survey will never translate into votes ( partly because of GRC and partly because some contituencies will never have an opposition candidate standing )

January 06, 2009 12:31 AM
Anonymous Century said...

"I suspect that many of the visitors to my blog have lost a lot of money on the mini-bonds and other credit linked notes, and they are disappointed at the response of the authority. This makes them appear to be "anti-establishment"."

erm. biased survey ?

January 06, 2009 7:56 AM
Anonymous Anonymous said...

After trying for a few days, still could not figure out TT and SJ. Can some kind soul drop some hints without revealing their names? Thank you very much.

Rdgs
Still trying hard

January 06, 2009 9:36 AM
Blogger Falcon said...

Anon January 05, 2009 9:29 AM asked:
May I know who are: CST, TT, SJ & CSJ?

Chiam See Tong, Tony Tan, S Jayakumar & Chee Soon Juan.

Thanks Cashew Nut for your wife's salute and SooJenn for your comments.

January 06, 2009 11:10 AM
Anonymous Anonymous said...

Thanks Falcon for enlightening.

Rdgs,
Still trying hard

January 06, 2009 3:31 PM
Anonymous Anonymous said...

Anyone able to tell who are the 4 lowest ratings?

I dont see Wong Kan Seng on the list above.

January 09, 2009 6:06 PM
Anonymous Anonymous said...

Some people commented that this survey is biased and voters are anti establishment. I disagree.

TT has a high rating.

In SG it is fashionable to condemn a person for even very very minor mistake or wrong doing. Yet, for all the atrocious past deeds of LKY all are forgotten or forgiven and he still earns a high rating.

If voters are anti establishment then I say LKY would not even be listed, ie fall out of the list since it will be right at the bottom far below LHL.

January 09, 2009 10:16 PM
Anonymous Anonymous said...

I did not take the survey on Politicians because I don't know them all. Among those more prominent in the news, I would rank LKY, TT, CST higher than LHL, CSJ.

We should not generalize that those who read Mr Tan's blog are minibond victims or anti-govt.

I first came to know Mr Tan's blog at the height of Lehman's saga. I gain lots of insight reading Mr Tan's advice on Insurance. I took part in his survey on Life Insurance Policy because he raised a very VALID point, which no one has raised in Parliament yet(?)

I am not anti-govt, nor pro-opposition. I access each candidate for their merits.

Just like LKY has ensured MULTI-RACIAL HARMONY, I hope to see LSL work to reduce unhealthy POLITICS sentiments; and also to be MORE PROACTIVE and to RESPOND to the voices/cries of the people, especially during this difficult times. Hence I rank LSL quite low, but LKY very high. Nothing to do with PAP or not.

January 09, 2009 11:11 PM

 

[Ah Hai]

Survey - Life Insurance policy

Friday, January 09, 2009
Survey - Life Insurance policy

If you have bought a life insurance policy (i.e. whole, life, endowment, investment linked, or variation) during the past two years, you can participate in this survey:

http://www.surveymonkey.com/s.aspx?sm=AaicemJhQmUXu8DitwJm8Q_3d_3d
Posted by Tan Kin Lian at 10:30 PM

 

[Ah Hai]

HK Legco fire set for finance chiefs after holidays

Friday, January 09, 2009
HK Legco fire set for finance chiefs after holidays
Legislator Raymond Ho Chung-tai said the Legislative Council probe on the Lehman Brothers minibonds saga will restart after the Lunar New Year.

Monetary Authority chief executive Joseph Yam Chi-kwong and Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung will be the first officials to be summoned, Ho said.

They will be followed by Financial Secretary John Tsang Chun-wah and Securities and Futures Commission chief executive Martin Wheatley.

Ho expects the hearings to last six to nine months.

http://www.thestandard.com.hk/breaking_news_detail.asp?id=11714&icid=3&d_str=20090109
Posted by Tan Kin Lian at 11:18 PM

 

[Ah Hai]

SCMP:Regulators' reports on Lehman minibond fiasco f

Friday, January 09, 2009
SCMP:Regulators' reports on Lehman minibond fiasco f
9 Jan 2009
Enoch Yiu, Maria Chan and Paggie Leung

Legislators and brokers are disappointed with regulators’ reports into the lessons learned from the Lehman Brothers minibond scandal.

The reports by the Securities and Futures Commission and the Hong Kong Monetary Authority carry recommendations including having a cooling-off period in which investors can cancel their investments, and tightening banks’ techniques in selling investment products.

The HKMA also recommends it exclusively regulate banks’ securities business, a role it shares with the SFC.

Kenny Lee Yiu-sun, the chairman of the Hong Kong Stockbrokers Association, said there was a danger the cooling-off measure could be abused. He said some people who lost money because of market movements instead of mis-selling might take advantage of such measures.

“There should be some preventive measures if the recommendation is implemented,” Mr Lee said. He disagreed with giving the HKMA the sole role of regulating banks selling securities products.

Lawmaker Kam Nai-wai, who has actively helped Lehman minibond investors fight to get their money back, expressed dismay at the report: “It does not include any help to existing victims, as there are no measures addressing their concerns.”

However, Mr Kam supported recommendations including establishing a financial services ombudsman and not allowing banks to sell investment products over deposit counters.

Peter Chan Kwong-yue, the chairman of the Allied Victims of Lehman Products, said the reports failed to solve the key problems.

“They are just speaking after the fact,” Mr Chan said. “Someone gets shot by an arrow and [the HKMA and SFC] are not going to save the injured but ask where the arrow came from to avoid getting shot in the future. It’s nonsense to talk about this now.”

Asked about the plan to give the HKMA more authority to regulate banks, Mr Chan said it could help prevent incidents similar to the “misselling” of Lehman minibonds.

A senior banker said it would be clearer if the HKMA took on the role of regulating banks’ non-banking business, but it would be difficult to implement the cooling-off period.

Billy Mak Sui-choi, an associate professor in the department of finance at the Hong Kong Baptist University, agreed the HKMA taking on a sole role was one way to improve the current two-regulator model.

“Regulators who are responsible for the supervision will have to bear all the responsibility, and they can’t blame the other.” Mr Mak said a cooling-off period would allow customers who buy products impulsively to reconsider their decision, helping minimise future disputes.

A spokesman said the SFC would work with the government and HKMA to improve the regulatory structure and investor protection.
Posted by Tan Kin Lian at 11:21 PM
1 comments:

pisces said...

The Report did not touch the SFC's failure on regulating Minibond Prospectus.

Minibond Prospectuses (for many serious) had omitted material fact consistently.

Minibond was sold as Credit Linked with 7 reference entities, with AAA-CDO collateral and international credits.

In fact, the collateral is Synthetic CDO which is credit linked with 100+ reference entities. A Synthetic CDO's value is decided by its credit risk of the reference entities.

Attached is a similar porduct sold in Jan.2006 in Australia, also by Lehman and the CDS counterparty was Lehman Special Finance. The underlying SPV is Saphir.
This prospectus had a proper discription on the notes / how the money is to be invested / how the reference entities to be selected / how the default event would impact the principal/interest payment / etc.

It showed what was missed in the Minibond Prospectus in Hong Kong.
So much about the SFC's role.
So much about banks' due diligent.

http://www.mahoganycapital.com.au/mahogany/PageAttachmentServlet?PageID=4762

a few extracts from the Mahogany Prospectus:
(i) Mahogany's prospectus mentioned that it is credit linkted to the [ 50 + (150+50) ] entities for various purpose.

(ii). (page 8) Quote: "An investor in this notes (PLN-portfolio linked notes) does not lend money directly or indirectly to the entities in this portfolio.
An investor lends money to the issuer, and the Issure in return agrees to repay invested and to pay interest."
Page 8 has lots of (real) quality description on how the money will be used.
January 10, 2009 12:00 AM

 

[Ah Hai]

SCMP:More claims for compensation by investors to be heard in court

Saturday, January 10, 2009
SCMP:More claims for compensation by investors to be heard in court
http://www.pressdisplay.com/pressdi...74c1ee1008c2&pdaffid=8HM4kDzWViwfc7AqkYlqIQ==

9 Jan 2009

The Small Claims Tribunal may refer to the District Court more of the compensation cases filed with it by investors in financial derivatives linked to collapsed US bank Lehman Brothers. Seventeen investors yesterday brought cases against four banks that sold them minibonds and similar derivatives. Representatives of two of the banks, DBS and Bank of China, requested that the District Court hear the cases. They were adjourned until March 23, when the tribunal will announce whether or not it will refer the cases. It is considering whether to transfer to the court 13 similar cases. The tribunal handles claims for up to HK$50,000.
Posted by Tan Kin Lian at 5:56 AM

 

[Ah Hai]

BBC: The financial cost of Redundancies

Saturday, January 10, 2009
BBC: The financial cost of Redundancies
Making redundancies could lead to a significant financial loss for both employer and employee, an expert warns.

http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7750146.stm

 

[Ah Hai]

Looking for a job in 2009?

Saturday, January 10, 2009
Looking for a job in 2009?

Are you likely to look for a job in 2009? In view of the recession, are you prepared to consider non-standard job options? Do you need help?

http://www.surveymonkey.com/s.aspx?sm=UGnK0ze4ToY402Ra2E37jw_3d_3d
Posted by Tan Kin Lian at 7:11 AM

 

[Ah Hai]

Re: Survey - Life Insurance policy

Friday, January 09, 2009
Survey - Life Insurance policy

If you have bought a life insurance policy (i.e. whole, life, endowment, investment linked, or variation) during the past two years, you can participate in this survey:

http://www.surveymonkey.com/s.aspx?sm=AaicemJhQmUXu8DitwJm8Q_3d_3d
Posted by Tan Kin Lian at 10:30 PM

23 Comments


Anonymous Anonymous said...

Hi Mr Tan,

Just wanted to know why buying Insurance policies must go thru' an agent (Assuming that the potential policyholder knows what he wants and does not need the services provided by the insurance agent) whereas unit trust can purchase via on-line? (without any agent to represent).

Can the potential policyholders who wanted to purchase policies avoid going thru an agent and make the purchases directly thru the Insurance company.

In this case, the potential policyholders can SAVE a substantial amount by reducing the distribution costs.

Thank you,

YM

December 29, 2008 9:56 AM
Anonymous Anonymous said...

The FSA UK will remove commission by 2011 as a means of remuneration. It will be substituted by fees.In other words insurance products will not carry a commission or a small nominal commission for product pushers or a deep discount.The consumers will benefit from this change by paying a fee and they get responsible advice at lower cost than the embedded commission.
Cost is inversely related to return. Higher cost means your return and protection is low .This is the reason today Whole life and endowment are NOT value for money.
The operating cost of the company has gone up very much, especailly when CEO asking million dollar salary, senior management paid 3 times higher than before and every staff demanding higher pay. Who pays for them? You the consumers. Cost is high, investment return is low, where can can you get value for money for whole life or endowment?
You must as well invest on your own by using BTITR.
Nowdays,to hide the low protection and return the insurance company covers up with a lot of rubbish like retrenchment benefit, annuity conversion, 3times death beneift from accident, and OTHER CRAPS TO FOOL the customers.Customers don't buy craps.The basic benefits to look at are protection and return.
These 2 will give the peace of mind.

December 29, 2008 10:14 AM
Anonymous Anonymous said...

Insurance products should be available directly to savvy consumers
at a steep discount, commission free.
With or without insurance agents any difference?
Yes, you don't get screwed up by them.
No, you still get the product.
Hope there is a portal which sells insurance product without commission.

December 29, 2008 7:38 PM
Anonymous Anonymous said...

scrap commission and introduce fees and let's see how creative but unethical insurance agents go around them.
If MAS enforces the need based under section 27 and remove the commission that will knock the last nail to coffin of product sellers and pushers.Hope they will be introduced asap.

December 29, 2008 10:21 PM
Blogger Falcon said...

Mr Tan tried to do that during his last few months in Income. He tried to remove the high commission by allowing policyholders to deal directly with the Business Centre. This is a good strategy that has two aims. One is to benefit directly the policyholder in terms of cost savings. The other aim is to stimulate and provide competition so insurance agents will try to improve their product knowledge and service standards in order to justify the premiums earned by them. Even I, an ordinary policyholder, can see that but the top management of Income cannot see that and succumb to the populist move to discredit Mr Tan as many powerful agents with links to the leadership lobby for his removal. It is the ordinary policyholders who are now poorer for it.

December 30, 2008 12:15 AM
Anonymous Anonymous said...

Knowledge and skill ntuc agents are lacking. They could sell because of the brand name built up by Mr. TanKL over the last 30 years. Cooperative was Mr. TKL and consumers trust the name not because of the skill of the agents.Today, although ntuc is no longer a cooperative poeple still trust. Many people still don't know that the products are no more value for money. NTUC revosave is very expensive and return is so low and agents misrepresented them.
Now the new management is trying to call ntuc social enterprise.It is a big bullshit. It is no surprise that this new team is rewarding themselves with policyholders' money and refund them poor return.

December 30, 2008 9:15 AM
Anonymous Anonymous said...

I did not know that NTUC Income is now no longer a co-operative. I thought it is still a co-operative but have a commercial CEO to do the dirty work.

December 30, 2008 4:40 PM
Anonymous Anonymous said...

This foreigner is a big time product pushers. The new products rolled out by him are meant for pushing. Just name which product by him is useful as a financial vehicle to address financial needs. Revosave is rubbish. Which area of needs can revosave address? Maybe at the best diluted. It is a little of this and that..intended to deceive. Ask him and his senior managers and the so called financial consultants , salesmen in disguise, whether they buy revosave. I bet none maybe some idiotic consultants, the blur ones.
MAS must audit this company, everyone and the agents for mis-selling and misrepresentation.
I wonder how many victims who have their finances screwed up by them.

 

[Ah Hai]

Re: Survey - Life Insurance policy

Anonymous said...

Today the products are more expensive because the cost of operation has gone enormously.Every wants high pay.Who is paying for them?It is obvious the consumers.
The worst hit products are the whole life and the endwoment. They shouldn't be sold for a number of reasons, poor protection and return .
But they are the most popular with agents and the companies because they are lucrative. The suckers are the consumers who are saddled with long locked in, poor return, low protection and many other penalties.
Consumers should realise that these products are to be avoided and don't let insurance agents fool and cheat you into buying.
Those who bought them and have no idea how they work for you , should bring this up for review when Mr. Tan set up the association, FISCA. You will be shocked that you have been walking around with a time bomb because of your greedy agents who didn't put your interest first.

January 01, 2009 3:16 PM
Anonymous Anonymous said...

NTUC is only cooperative in name.The agents are non cooperative. They only want to sell you products with the highest commission and not products that meet your financial needs.They are no longer caring and honest. The misrepresneted the products to make you buy, eg like revosave although they know the product doesn't help you and add value to your financial future.
The products are rip off without money for value and they are shoved down the throat of the man in the street because they are too trusting.
The management is high and mighty and has no touch with the ground. They dine and wine in high and posh places with policyholders' fund. They are good at wayang. The truth is they are hiding the truth.

January 01, 2009 5:53 PM
Anonymous Anonymous said...

Mr. Tan, quickly set up the FISCA and help to review these people's policies to check if they were taken a ride by their insurance agents.
It seems more people are distrusting the agents. The insurance agents are getting bad reputation as being dishonest and unethical. But be careful, many have changed their titles to consultants. Example, the ntuc salesmen have changed to financial consultants. Some even have senior and executive to the titles. Anyway ,we know ntuc insurance agents are all product pushers. They can change to fanciful titles but they still can't consult or advise, so no point having titles like these.They can bluff other people but they can't bluff us.They can't hold a financial calculator how can they be called a financial consultant..This is misleading and misrepresenting. It is cheating and cheating is serious. MAS must know about this. I wonder ntuc informed MAS about the titles.

January 02, 2009 12:28 AM
Anonymous Anonymous said...

Aiyah, so many good men and women has been warning the new policyholders not to buy these policies, but how many listen? For us old policyholders if no more people buy then our payout for our policies will be badly affected. Already they are losing so much money recently and coupled with their high dine and wine approach the returns are going to be worse from now onwards. Let these new policyholders buy lah, after all they are not our money. If more people buy then at least our existing policies will not be affected in payout that badly. Who knows, maybe if many many new policyholders buy then our returns will become better.
So please buy more so the new foreign management can wine and dine more and be happy then give us back more. Huat Arh!!!

January 02, 2009 3:31 AM
Anonymous Anonymous said...

As you have said more money to them means more money to spend. Do you know it it sending a few hundred greedy agents to Goldcoast . The last time they spent 1 million to Ho Chi Ming. What do you think of the amount this time?
Anyway not their money but your and mine. After spending they can blame it on investment loss...Maybe another round of bonus cut..cut cut until no need to cut even during the worst time.
Some one was saying that NTUC no need to cut bonus next year when others might cut. BUt he forgot that ntuc cut 45% already much earlier than the rest.
But foreign managemnt is clever They make every body happy, the agents and the staff and whatever they do no one can notice, lah.

January 02, 2009 12:26 PM
Anonymous Anonymous said...

So please new policyholders quickly buy more so our existing policies value will not go down to zero.

January 02, 2009 4:09 PM
Anonymous Anonymous said...

What buy more? Stop buying and starve them to surrender so we can have quick change of management. If possible terminate your policies. We must keep trying

January 03, 2009 10:44 AM
Anonymous Anonymous said...

looks like your money flying to Gold Coast in stacks. Your next year annual bonus is their year end bonus. Where got enough from new policies. It must be from life fund. Life fund so big a few million to go for holidays and wining and dinning wouldn't be noticed.Worse to the worse cut your bonus, hor.

January 03, 2009 2:16 PM
Anonymous Anonymous said...

I will hold the ntuc ministers, Lim Boon Heng and Lim swee say responsible for ntuc income performance as they are responsible for ntuc organisations. They should know by now that the new ceo is a good for nothing foreigner and yet they still allow him to go his way. If ntuc income still continue this high spending way at the expense of its policyholders then come next election I will campaign for them not to be voted into govt.

January 03, 2009 10:56 PM
Anonymous Anonymous said...

No . he earned through bending and exhibiting the karma yoga style.
he is a great actor; he is trying to follow somebody's style by shedding or pretend to shed tears to move the audience. People saw through his ploy
and he was jeered for using this low down insincere trick

January 04, 2009 7:05 PM
Anonymous Anonymous said...

Mr. Tan , hope you revive the bonus issue with ntuc. You mustn't let get away with it. Ask for this year's bonus. Ask how much they have lost in the special bonus they cut from our annual bonus..
I have a friend who told me that the return from vivolife is only 2%+ after 35 YEARS.During your time it could give at least 4%.
Something is wrong..The cost is too high and it is eating into the protection and the return.

January 05, 2009 1:40 PM
Anonymous Anonymous said...

With lot of splurging on posh hotel meetings, dine and wine and exotic trips overseas cost is definitely spiking. If raising money from new business to fund the these activities
policyholders are certainly taken for a ride. Or if raising money to pay annual bonus isn't it similar to PONZI scheme. Madoff should be consulted as he has so many years' of experience. He is the GURU of the PONZI scheme. Insurance companies can consult him if there is a further need to cut annual bonus or to restructure bonus.

January 05, 2009 8:08 PM
Anonymous Anonymous said...

1.25% for revosave after 25 years.
2% for vivolife after 35 years.
Don't you consumers know about this.
It is GUARANTEED LOSS... Were you told when you bought them? Are you aware that there more ways to address whatever concerns you have in mind? Now know waht you want is important . Is insurance you want?
How long do you want to insure? 99 years?
Is saving you want? How much return you want?
There is no such thing as one product to take care all of your needs. It is rubbish. You can see these products. Protection is diluted. Return is diluted.
Don't be conned. Don't be a sucker.
You neither get enough protection nor you get decent cash value.
Get your agents to DISCLOSE ALL THE FACTS.

January 05, 2009 9:45 PM
Anonymous Anonymous said...

towards the end of the year mis-selling was rampant with ntuc agents . It was free rein for the last dash to qualify...for????

January 06, 2009 12:34 AM
Anonymous Anonymous said...

High time to revamp existing commission structure, which encourages agents to "mis"-sell products which earn them more commission; instead of considering buyers' need and recommending a suitable product.
My agent was very persistent to sell me a high premium product, kept emphasizing high Cash Values. Even though I found out from other sources that there is a cheaper "Limited Pay" product which match my needs, my agent side-stepped and delayed offering more info on "Limited Pay".
I decided to talk to other agents instead. Luckily I asked around before buying.

January 09, 2009 10:24 PM

 

[Ah Hai]

Life in Singapore (3)

Saturday, January 10, 2009
Life in Singapore (3)

Here is the average rating based on 25 and 100 responses.
Rating 1=very unhappy, 3=neutral, 5 = very happy

25 resp 100 resp
Safety 4.12 4.07
Law and order 4.08 3.95
Multi-racial culture 3.52 3.47
Neighbours 3.36 3.34
Work colleagues 3.32 3.32
Environment 3.32 3.28
Quality of life 3.30 3.04
Time with family 3.08 2.98
Climate 3.24 2.88
Singaporeans 2.64 2.83
Adequate wages 2.92 2.77
Education system 2.80 2.69
Time to enjoy 2.68 2.61
Transport system 2.84 2.51
Foreign workers 2.64 2.39
Government leaders 2.64 2.34
National Service 2.38 2.32
Taxes, GST, charges 2.24 1.96
Cost of living 1.96 1.87
Overall score 3.00 2.87

The ratings for most of the items were lower based on a larger group of respondents. The inital batch had a higher proportion of the older and higher income respondents, which gives a relatively higher rating.



Posted by Tan Kin Lian at 10:20 AM