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Chris Tan on ILPs, F.I.R.E and Finishing Life Well

My boss Christopher Tan, CEO of Providend, last year did a podcast episode with Singapore financial podcaster Reggie at The Financial Coconut.

I think it may be one of the most personal interviews that he has done (aside from the war stories we shared at work).

I am sharing this podcast because there is good value about his perspective on insurance, investments, life and F.I.R.E.


Chris shared with us what is the difference between fee-only, fee-based and commission advisers. Somehow, the host Reggie seem to think the fee-based is the most conflicted option.

“Fee-based is the ‘I really want to sell you this product model.'”

Managing wealth for them didn’t start off as a calling. There was enough naivety when they started Providend. He shares how much he made in his last year as a commission adviser in the 2000s.

“If you sell this, you are not going to be an MDRT.” The economics behind ethical MDRT.

He explains why ILPs are costly and make very little sense. Singaporean’s obsession in bundling. Singaporean’s are also obsessed with the bulk purchase of fire extinguishers.

Why it is so difficult to recruit client advisers for Providend. How much money they manage.

How to fortify daughters by building up their drinking capacity in primary school. His personal story of depriving your family.

His biggest gripe with F.I.R.E.

How to finish well in life.

Podcast at Spotify here:

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Jason

Friday 22nd of January 2021

Hi Kyith,

I am the guy that believes in selling term plans but I could not survive. I go all out to help people plan using term plans, helping them to cut their ILPs, spend hours to help them to plan on how to achieve financial freedom with the help of CPF Life, investment, etc.

Lucky I have dividends to sustain myself and my wife is supportive. When COVID-19 came last year March, I ended my 6 months stay in the financial planning industry, I returned to my previous industry. :)

It is a great industry.

Best regards, Jason

Jason Goh

Friday 15th of January 2021

Most of the so called Advisors are profit(fees) driven. As the famous Oracles of Omaha once said, profit/fees for the advisors should be derived from the profits they have made from their choice of investment and not from the money given to them for the investment.

Jason Goh

Saturday 16th of January 2021

@Kyith, Yes, it would be unfair to the advisors during this bad period. But this is also how we can distinguish the best from the good. The main reason why I believe that advisor fees should be derived that way, is because that will be the best way to really define the advisor principle, their commitments and their ideology of managing other people money. Lets say during this bad period, the advisors trade may not be profitable but if their investing fundamentals are correct, they would still receive their investment dividend and therefore, their fees should be generated from that dividend income. Lesser income perhaps but more ideological.

Kyith

Saturday 16th of January 2021

HI Jason, I would disagree that the fees for advisors should be derived from the profits made from their choice. It makes it feel like the adviser needs to pick the best performing investments, so they can earn more. Clients engage the advisers more than that. For example, clients come in to preserve their wealth and they have a lower risk appetite. In this case, we deploy their money into a less volatile portfolio. During this period the market as a whole was not doing very well. The adviser spent their time reworking the client's personal cash flow, linking them up with a trust lawyer to ensure that the trust that the client's created is best suited for them.

Then they own earn from a percentage of the profits made. Would that be fair? I do not think so.

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