Enlightened

I have just been sabo-ed by my boss to do a Personal Financial Review for a friend, and is dreading the whole process of having to do the calculations for him. The appointment was taking place at his home.

We sat down in his room and started the whole fact find process. I know for a fact it was not going to be very difficult as he just started work and have very little assets and liabilities. He has just started work and therefore need some help with allocation of his income. I have already did a savings plan for him and now trying to uncover what other financial objectives he should be concerned about.

I know for a fact that CPF then has just changed their laws to allow monies to be invested from 0 dollars up. My boss has also reminded me there were a lot of monies now for investment purpose. In my head I know that my friend will have CPF and there was another opportunity for sales. I went through the motion of doing the fact find.

'So any assets or liabilities?' knowing the answer is no. No. Do you have any existing plans, no, but i think parents have gotten something for me. The fact find conversation somehow started to move towards his education. He has just completed his education in UK. He had just come back and found a job as an engineer. I eventually asked him, so how old is your dad? He told me: 60.

60!? Suddenly, I started to think for myself. Do I still want to support my kid through his education and all when I am 60? Our statutory retirement age then was 55. 60?! I suddenly feared that I cannot retire in future. I feared that at the point of me wanting to retire, I cannot as I have kids still dependent on my income. Did a quick calculation that if I want to retire without much commitment to my kids, the age I must have my last kid is 35. (I am late already)

I suddenly became enlightened how my job value adds to people. It became clear why the need for doing a financial review is important. Many of us do not think too far into the future. We assume that everything will fall into place. It might but why run the risk?

I did up the personal financial review just as my friend's mom walked in. What are you all doing? Auntie I doing investments, you have CPF. I don't know how to see, said my friend's mom. Auntie you pass me your CPF statement I help you.

She went out to her room and returned with her CPF statement. Showed her how much she has in OA, SA, and medisave. She agreed to invest her CPF monies. Auntie, have you thought about your other insurance. Its ok, i got friends in other insurance companies and everything is cared for. In my head, I told myself, since she is not comfortable to talk about it then I will not push. I am already losing friend's on a daily basis. Next time then talk. Since her friends in other insurance companies should take care of her properly.

Little do I know this thought will come back and haunt me today.

Photo by: Eddi 07- Free Stock

The Next Level

I have just joined the financial industry and the year is 2001. I just left my office automation sales job and went on to be an insurance adviser. I had always been a non believer of insurance because my father told me so.

I went for a meeting with my friend's boss and he managed to convince me to go take the exams . At that time all you needed to take was 1 paper, certificate in life insurance which is obsolete today. I picked up the book dreading that I have another exam to study for, since I am already doing my part time degree in the evenings. Sat down and prioritised, degree will always come first. Insurance is a means to get pocket money.

My perception of insurance changed when I read the text, I saw why was insurance important. I saw how it worked and how it benefitted. I became an advocate. I ate, sh*t and slept insurance. I talked non stop about the importance of it. This is the time when you start losing friends, people eye your phone calls with suspicion. They think you have an ulterior motive when you call them out for coffee. This is a test of your friendship with your friends or those who you call friends. The friends will never hesitate to come out and meet you. They will never make excuses if you ask them for coffee. Friends will be the one that tell you to 'turn off your insurance mode'.

I have a friend who was my first client. He never rejected me and agreed to meet when I called him. New laws have been passed and the first 3 appointments have to be accompanied by your boss. Told my friend my boss is coming. He said, sure.

During the appointment, I explained the plan that I am recommending and my friend listened intently. After that we did the paper work. All the time my boss was silent. When we finished the paperwork, my boss spoke, he asked my friend: why didn't you want to do the PFR?

In my head I was stabbing my boss a thousand times over! PFR?! Personal Financial Review! This review takes the income, assets, liabilities and the financial objectives of a person. An adviser will then have to take the PFR and transfer all the information to the FHR Financial Health Review, key the figures into a financial calculator and then generate a report for that person. And in the times of 2001 where laptops was still retailing about $3-$4k, it is not an easy task. The PFR alone will take about an hour. I will have to go back to office after to do the FHR! Boss I am going to kill you!

In my head I was hoping my friend will say: no, its ok no need. Instead, he asked: whats that? My boss looked at me and I went on to explain what the PFR is. Explained to him what I will have to do after I get back to the office. He said: Sure, I don't mind. 'But its going to take about one hour or more. We do here now or we make another appointment.' I asked. He finally asked me to go to his place on another day to do the PFR. Boring!

But little do I know that this exercise will bring my understanding and need of a financial plan to the next level.