Sunday, June 7, 2009

My Clients(1) - The Singles

Over my 6 years as a financial adviser, my current clientele base is around 20% young singles, 20% matured singles, 50% young families and 10% matured families. Most of them are in the region of mid 20s to early 40s. My age is between them and hence I can understand their concerns quite well when I met up with them. I can perhaps share a bit of my observation about these 4 groups of my clients with you.

Young Singles
The Young Singles I described here are between early 20s to mid 30s.
a) Singles theoretically have lower needs against death. Their parents are probably between late 40s t0 early 50s and are not depending on their children earnings. When I asked them how much they will like to provide their parents on a monthly basis, they will give me a very low figure or even providing nothing at all. I have to encourage them to give to set a higher amount by telling them how much their parents had spent for them over the past 20+ years.
b) Those who are getting married are confused on how much they need to spend for the big day and for their 1st property. They need our help in analysing their situation.
c) Many aspires to buy a car because they have low commitment and able to see good surplus every month.

The good and not so good about this group of client
d) Many are not very concern with insurance and likely miss an appointment when they have slightly more work in the office or when they have a new appointment.
e) They have plenty of time to research and read from Internet and even meet with multiple advisers before they buy their first shield plan. They can ask many interesting questions and quite are quite demanding on us.
f) The good thing is that they are the group which I can see them grow and they will look out for me when they form their family nucleus.

Matured Singles
The Matured Singles group I described are between mid 30s and above
a) The matured singles I met are normally professionals like Engineers, Managers and Lecturers, etc. Their expenses are still low and have good monthly cash surplus.
b) Their parents are older and they begin to see the need to provide for their parents when they are not around, especially on hospitalisation expenses. Their Insurance needs for death is probably lower at this stage because they will have more resources/savings by this age.
c) They are concern about retrenchment, not able to work and hence they like to leave a huge amount of liquid cash in banks for all sort of unknown emergencies
d) Many of them look out for a property. Perhaps a 3 room condominium or HDB flat because they will have quite a bit of CPF monies and they have quite good monthly surplus.

The good and not so good about this group of client

e) They are relatively busy and it is not easy to fix a date to meet them. Many don't even like to reply my sms or emails. However, onces a date is fixed, they will do their best to meet up.
f) They will have many friends in the Financial Advisory industry and they like to look out for their friends first because they don't have the time to do all sort of research. Its usually by referrals that I'm being introduced to this group.
g) The good thing is that this group of client see a more urgent needs towards financial planning as they understand that they are solely responsible for their own retirement in future.
Till here and I will share more about young and matured families in my next posting.


Anonymous said...

Adtrain, singles without dependents DON"T need insurance except medical.
The crap about 'repaying' their parents for bringing them up is emotional and a WANT and NOT a need.Please, Adrain, get it right.
If the singles want to repay their parents the right thing to do is give them money if they can spare and also cover themselves with medical insurance.

Anonymous said...

You have got yourself entangled up with the various groups. You are confused.

Khiat Han Hwee Adrian said...

There are no absolute right or wrong. My responsibility is to inform and guide. If one feel that they should go without leaving a single cent to their parents, its individual preference.

Anonymous said...

Hi Adrian

I belong to this group, and look forward to more of your post pls.
Cannot agree more on some of the points.


Anonymous said...

Generally, singles without dependents need a good H&S Shield plan and also a good CI coverage. Perhaps you may also want to introduce them some Personal Accident policy (depend on their occupation and lifestyle). That should be more than sufficient to cover their personal risk.

To tell them to buy an insurance policy so as to repay their parent's kindness? What kind of rubbish arguement is that?

Khiat Han Hwee Adrian said...

When I'm single, I also don't think I need to give back anything to my parents. The whole world seems to be kept within myself and I did not spare much thoughts for them.

As I get older, I get to know their pain in bringing me up. I know how hard it is to make money and how hard it is to bring a child to this stage. I feel that its irresponsible if I leave the world with nothing for them. They spent so much on me. They sent me overseas for education, I gave them so much stress when I'm young, etc.

When we're alive, we'll treat them well and do our parts as children. but what if we're not around anymore? Do we think we are worth nothing?

Its individual opinion on this as there are no gurus or textbook to teach us this. I am at their stage before and I can understand that many of them do not spare a thought for their parents at that stage of their life. As their adviser, I think I need to highlight this to them. It don't cost them an arm to get a simple term insurance.

Anonymous said...

you think your parents will agree to that? You think that receiving alot of death proceeed from your death will ever replace you.This is emotional and financial need and not want. Want is something you do after meeting ALL your needs. Need first!!!!You are advising that young people put their cart in front the horse. Maybe you don't understand the terms. You are letting your emotion get the better of you. Every loves their parents but it doesn't make financial sense when they don't want you to leave them anything. Are you hoping that your children leave you something or to benefit from the death of your children? Thsi si the last thing in your mind, right?

Derek said...

I think the point of buying insurance for someone without dependents is not to 'repay' our parents but rather to adequately insure ourselves so that we will not burden our parents financially when something bad e.g. accident, CI etc happen to us. To me, that's the least I can do.

I took it one step further by ensuring that my parents have some basic form of insurance coverage as well so that I will not be financially drained should something happen to them and they can concentrate on recovering.

If we are talking about buying insurance to be used for my parents' retirement fund, I would prefer other sources like bonds, or low risk UTs.


Khiat Han Hwee Adrian said...

As a parent, its definitely not in their mind to expect returns from their children. It stem down to us as children if we really want to go with nothing or give them something.

I'll of course still ensure my clients have their necessary H/S, disability income or CI coverage but I'll still highlight the importance of having some insurance that cover death. If their parents are very rich, then it may not be necessary.

We can do anything we want when we are alive, buy them insurance or give them a basic income but there are nothing we can do when are in ashes. Whatever you help provide for them will not be likely anymore.

Its personal opinion here but I'll still highlight this point to my young Singles clients in future.

Anonymous said...

First of all, I am no Financial Adviser myself.

However from the little knowledge that I have, buying insurance is a form of transfering a portion of our personal risk to the insurance company. So that in case anything bad happen to us, the insurance company can step in to mitigate this risk.

I do not deny the fact that singles do need some form of insurance. However the arguement to buy insurance for the sake of filial piety is just a flawed one. There are more than 101 ways to show our care and concern to our parents. If there is anything you want your client to leave it to their parent when they are gone, what about writing a valid will?

I am really surprise you have made this statement because you are an IFA, who is supposed to demonstrate a higher form of professionalism and understanding of financial planning. Please remember that you are no longer an insurance salesman from NTUC peddling products using emotional selling.

I wish you good luck to your journey as an IFA.

Anonymous said...

When we take up an insurance it is etiher for your own needs or for loved ones' needs. But you have got needs upside down. Don't be like insurance agents. They tell you every damned thing needs insurance.
First let me ask you you. HOw many millions worth of insurance have you?

Khiat Han Hwee Adrian said...

My intention of telling my clients to be covered is not about being fillial or repaying kindness.

My article is meant to tell people of my experience with "Young Singles". Some of them do not believe in getting insurance coverage and do not spare a thought for their parents when they are not around.

I'm currently giving a fixed amount of money to my parents and I'll give more when I earn more. I give, not because they need this money. Its because I hope they can pamper themselves a bit more like going for a holiday at the end of the year. I will want this fixed amount or perhaps a bit more to be given to them when I'm not around.

This is just one way to show my care and concern to my parents and of course there are many ways.

I hope I'm not being misinterpreted, I was also young and going through this stage. I know a lot of people disagree with me because no financial planning textbook will say such thing but I will continue to encourage them to get some cover and not totally ignore it, especially if their parents are not those who are very rich.

Having said these, I will do my part in ensuring that they have their core cover first. I don't see myself as someone unscupulous or unethical and try to con anyone into buying insurance.

btw, getting an additional $100k term cover for a 25yrs old male cost only $14/mth over the next 30 years. How much will I benefit by trying to con that person to get himself better covered? I'm trying to help him. Not con him.

Anonymous said...

I agree with Adrian that we should spare a thought for our parents if we die earlier than them.

He is not telling us to insure millions but encouraging us to continue give our parents a fixed amount of money after we die.

I think he has a good heart. What is wrong with that? If I'm the father, I'm happy to have this son.


Anonymous said...

It seemed that many of the readers had misinterpreted Adrian's intention. I do not read his posting as buying insurance to show filial piety.
Regardless single, or married, I will always treat my parents as my dependents, and therefore it will be my responsibility to see that their needs are being taken care of. For financial planning, I will definitely consider my parents' need i.e financial support from me.
If many of the young people can set aside to support a car, I do not see why they can't set a sum to support their parents.

Anonymous said...

Hi, If want to be independent financial advisor, how does IFA find their clients? Is it beginning first contact from friends? Because if i am new and young, do I have to clinch clients beginning from friends? Most of my friends in the age 20-22 that they are most at study stage so they dun have income. Thinking of working as independent financial advisor. It has no basic pay, all by commission. So if must first target on friends, i think i will not work as independent financial advisor. I scare no income for months. Please advise me.

Anonymous said...

The $14 may be better used to cover CI if he hasn't enough.This is to protect his parents' assets and his own. Someone has to pay.
For this his parents may be spared the financial agony but not the emotion.

Anonymous said...

I suspect some of the replies here are from civil servants.

textbook never teach, therefore cannot be done!

Why are you even approving such replies? Such people obviously live in their own world. We've seen all kinds of people out there.

Anonymous said...

Anon 1.58AM,
You said
'Regardless single, or married, I will always treat my parents as my dependents, and therefore it will be my responsibility to see that their needs are being taken care of. For financial planning, I will definitely consider my parents' need i.e financial support from me'

That is right , if your parents are YOUR dependents you MUST have death benefit insurance to provide for them. The question is "what if they don't need your support". Hey , you better fix yours first and don't play out your parents.

Khiat Han Hwee Adrian said...

Sorry that I will not publish quite a few comments because it get a bit out of the point from my initial message.

Thanks for all the earlier comments.