069 Market data - week ended 19/09/2015

US

Europe

Asia

Commodity

068 A young agent's dilemma -- who wants but also fear to change! 一位年轻代理员的难题 -- 想要却害怕改变！

I had a great conversation, initially face to face and followed by WhatsApp messages, with a unit trust agent lately. Let's name her Nancy, OK? OK, Nancy has a full time job. At the same time, she has her own dream. She hold a part time job as unit trust agent to get more income.

One fine day, we WhatsApp and chat about career as a independent financial planner. The idea of uninterruptible passive income through managing clients' funds caught her. As an independent financial planner, we are not bound by any company to produce sales or to maintain quota. We only proposed the most suitable product according to client's need, and not to maintain quota.

As compared, agents under direct agency system will need to produce sales to maintain their contracts. The strong point is, some agents will produce excellent sales. The weak point is, elder agents will have problems keeping up with the pressure.

So, Nancy likes the idea of uninterruptible passive income. She is a degrees holder, so she qualifies to enroll into CFP program. The best thing is, since she already has passed unit trust exam, she further qualifies to skip Module 1 of CFP program. She only need to attend a Tax Planning workshop and be on the way to enroll into Module 2 of CFP. IF everything goes well, she will complete her CFP in 1.5 years and be ready to join a financial planning firm to practice.

She has some fears. 

She fears the financial planning firm will terminate if she doesn't produce enough. She fears she cannot cope two responsibilities. She fears her present unit trust company will also go into financial planning business so her career will hang in between. She fears her present unit trust company will terminate her contract if they find out she's taking up a CFP program.

But at the same time, she doesn't want to be like her agency manager. Her manager is in the 50s. But she still has to rush her and there to recruit and do sales. She pities her.

I can clearly see she has mental block. I tried to let her see she doesn't has to depend on her present unit trust company. A true excellent corporate should allow and encourage their agents to excel; give them the tools needed as we move into highly competitive world. I shared the market changes in Singapore, Australia and India. Those markets are moving into low or nil commission environment; encouraging agents to switch to provide advisory service to be remunerated.

Frankly, I once fear - just like her. But now, I know change is here to stay. Single business agency system will face greater challenges in future. I believe financial planning advisory will slowly gain ground. Therefore, I think she doesn't has to fear anything. If she excel in financial planning business, she can leave any job.

We all must leave our comfort zone. The more we stay in there, the more unwilling we are to leave. The more unwilling we are to leave, the more we will place ourselves in a difficult situation. A vicious cycle. We are in charge of our life. It should not be in another company's hand.

I hope she will slowly move on. One step a time, slowly. Let's move on together.

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我有幸跟一位年轻的信托基金代理员进行有趣的对话，先是面对面的交谈，尔后是在WhatApp里。我们暂时称她为南丝好了。南丝有一份全职工作。她有自己的梦想。因此，她兼了一份信托基金代理员的工作来增加收入。

有一天，我们在WhatsApp里聊到了以独立理财规划师的事业。其中不间断的被动收入深深的吸引她。独立理财规划师不被任何公司规定须提交业绩。我们仅需依据顾客的需要来建议最适合的理财产品，而非依据公司的要求。

比较起来，代理员制度下的代理员必须提交业绩以持续成为该公司的代理员。这里的好处是代理员可以提交高业绩，而弱点则是年纪稍大的代理员可能会面对这方面的压力。

南丝是喜欢不间歇被动收入的。她拥有学士学位，因此符合参加理财规划课程的学术条件。更妙的是，她即已经通过了信托基金考试更可以免读理财规划课程的第一个课程。她仅需参加一个所得税的讲解会就可以直接进入第二个课程。如果一切顺利的话，她在一年半后就可以读完整个课程。

但是她有所惧怕。

她怕理财公司会以销售额不足来中断合约。她怕不能兼顾两个职责。她怕她所代表的基金公司也可能发展理财业务。她怕该基金公司会因为进修理财课程而中断合约。

于此同时，她又不想像她的组织经理一样。年届五旬的经理依然必须冲上冲下的增员及行销。她挺可怜她的经理的。

可以看出她面临思想瓶颈。我尝试让她了解她无需以来现在的基金公司。成功的企业应该允许甚至鼓励代理员精益求精、给与代理员更多武器来面对充满挑战的世界。我也分享新加坡、澳洲及印度的发展。这些国家已经进入低佣金甚至零佣金的环境来鼓励代理员转型提供理财咨询服务来获取收入。

老实说，我也曾经一样害怕。但如今，我知道改变是实在必行的。代理员制度将面临很大的挑战。我相信理财咨询这一行将逐渐受欢迎。因此，我认为她无需感到害怕。如果她真的在理财领域大放色彩的话，那她是可以离开任何工作的。

我们都应该离开我们的舒适区域。我们越是停在那里，越是不想离开。越是不想离开，就越会把自己摆在困扰的环境里。这是一个恶性循环。负责我们人生的是我们自己，并不是其他的公司。

我希望她将慢慢踏出，一步一步慢慢的。让我们一起加油。

067 Requirements to enrol into a CFP class (Update)

I wrote on the academic requirements to enroll into a CFP class before this. I mentioned the students must have either a Degree or a Diploma with 5 years experience in unit trust industry.

Now, FPAM has given degree holders a better offer! Degree holders can be exempted from CFP Module 1 exam if he / she attends a 16 hours Tax Planning class. This means cost and time savings.

About CFP modules

CFP modules has been compressed from 6 modules into 4 modules. Estate Planning and Retirement Planning has been absorbed into the new Module 2 and Module 3. Tax Planning were pull out to become a standalone workshop with no exam. The new modules' layout are:-

Module 1: Foundation in Financial Planning and Tax Planning

Module 2: Insurance Planning and Estate Planning

Module 3: Investment Planning and Retirement Planning

Module 4: Financial Plan Construction and Professional Responsibilities

CFP students must complete and pass Module 1 before progressing to other modules. After passing Module 1, students may opt to take Modules 2 and Module 3 separately or at one go. The choice is mostly depending on class availability and student's time. As most students have full time job and since classes are held on weekends, it is vital for students to allocate time to attend class and revision. Module 4 can only be taken after passing 3 previous modules.

Normally, we have class for each module every half a year. So, if a students follow this progress, it takes 2 years to complete the full CFP. If a student take Module 2 and Module 3 in one attempt, he may complete the course in 1.5 years.

What does it mean to be exempted from Module 1?

1) Save Course Fee

Each Module has their course fee. Skipping Module 1 means saving on fee for 1 module.

2) Save Time

Skipping 1 module means a student can complete the full course in 1.5 years.

3) Earlier practice

Completing the course earlier means it makes possible for the students to go into practice.

Where to take class?

This is tricky in JB. It seems like we don't have many providers. We used to have one. So, we requested FPAM Melaka Chapter to specially conduct the course. Now, the person in charge set up a proper company to be our provider. Now it is the sole provider in JB, it seems.

So, do look for us if you are interested to take up the course.

066 Market data - week ended 12-09-2015

US

Europe

Asia

065 International Medical Insurance in Malaysia

Malaysians with medical insurance coverage normally are covered by local insurance companies. In JB, many people like to go to Singapore to seek medical treatment because of their advance medical industry.

Seeking medical treatment isn't cheap in Singapore, now adds to the pain is the extreme high currency exchange rate. Malaysia ringgit has depreciated against Singapore dollar by about 20% during the past two to three months.

Another problem with treatment in Singapore is the local insurer will not pay the medical bill in full. Insured will be reimbursed on a reasonable and customary rate basis. Meaning the insured can only claim the amount similar to seeking treatment in Malaysia. Current exchange rate is not considered, travelling cost in between two countries is not considered, the high medical cost there is not considered.

Another scenario can be an expatriate who is sent to oversea to work for more than 90 days. Any medical treatment after the 90th days won't be entertained by local insurer as well. The insured must come back to Malaysia after that.

Apparently, International medical insurance is needed by certain groups of people here. International medical insurance takes away he above two limitations. Imagine a businessman who travels to countries every now and then would be better protected when medical needs arise during his trip.

We may be familiar with hospitals and procedures in Malaysia or Singapore, but I think we will all be panic if we are in India, Brazil or France. We know nothing about their medical system. That's why international medical insurance comes into handy.

UltraCare, this International medical card, comes in four plans and quoted in USD. The lowest plan has annual limit of USD1.5mil (approx RM6.45mil). Local medical cards now has annual limits of RM1.5mil, highest.

Right now, the premium is quite high to general public. My own experience is middle class income earner can barely keep up with rising insurance premium. So, this international medical insurance is place more to high net worth individuals.

The good news is the insurer will come come out a new insurance that will be priced between the two.

064 Medical policies lapsed!!!

I just realised, yesterday, that me and my wife's medical card policies were due or lapsed. I know they are due somewhere in Jul and is expecting the renewal notice. However, none came. So, I called the insurance company to do enquiry. Yah, they were due or lapsed because of late payment.

So, I made a visit to insurance company, told them the story of our policies. The staff said we can continue our policies by making the payments. The renewal notice is sent out by HQ and it seems like their system has some problem doing so. Many clients has faced the same problem and made complain.

Indeed, we have been with this insurance company for many years. This is the first time we do not receive our medical card policies renewal notice.

For our case, the insurance company accept our renewal because of the special reason. If it is the client who delay payment and cause the policy to lapse, the client needs to fill in a health questionnaire for the insurance company to do underwriting. This may place the client in a disadvantage position because the new underwriting may exclude certain, most needed, coverage.

Therefore, I think we, as client, need to do something to protect ourselves. Medical policies is one of the policies that I will not take risk to lapse.

What can we do?

1. Keep a list of all insurance policies and their renewal dates. The list can be in a sheet of paper or a phone calendar app.

2. IF possible, authorized for auto renewal through auto-debit or credit card.

3. Do a annual policies review. Do it on a date easy to remember - birthday, anniversary, specific public holiday etc.

063 How to claim a deceased's shares?

Mary's uncle passed away few years ago without leaving a will. His wife managed to transfer the assets to her name. However, one asset was left out. They are the shares Mary's uncle bought before he get married.

Mary wants to know how to deal with the shares.

We went to the securities form to enquire on this. The staff said the family needs to present a Letter of Administration, Death Certificate and Administrator's NRIC for them to get necessary documents from Bursa. When the securities firm received documents from Bursa, the Administrator will need to go to securities firm to do the necessary transfer.

But since this shares was left out during the previous Letter of Administration application, a fresh application of Letter of Administration is needed. For this, the family needs to engage a lawyer to file the papers. Costs will be involved. Therefore, it is better to know the value of the shares - is it worth the efforts.

That aside, this reminds us the importance of a will. A will is a proper document to spell out clearly the distribution of assets to intended beneficiaries. The deceased's family will get things done faster when will is present.

Apart from it, a proper record of assets is also important. Trustee company will normally give testator (person who make the will) a personal inventory booklet. The purpose is for the testator to list an updated list of assets. If the testator finds it a hassle to do so, he may photocopy a copy of all his assets and keep together with the booklet.

Inform family member where the will and booklet is kept. If the will is kept with trustee company, it is importance for family members to know so. If the will and booklet are kept by testator, not only it is important for family member to know the location, equally important is it must be properly kept - to avoid intentional / unintentional damage.