FPAS - December 2023

Financial Planning Magazine | December Issue

FPAS Global Conference and Dinner 2023

Retirement Planning: Endow Your Silver Years With A River Of Gold

Asset Allocation: The Power of Diversification

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Financial Planning Magazine | December Issue PAGE

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FPAS Global Conference and Dinner 2023 PAGE

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Retirement Planning: Endow Your Silver Years With A River Of Gold

Financial Planning Magazine December Issue Contents President Message Chief Editor Message

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For Consumers Asset Allocation: The Power of Diversification Retirement Planning: Endow Your Silver Years With A River Of Gold Estate Planning For Someone Special Digital Gold As An Inflation Hedge Property as an Inflation Hedge and Diversification Singapore’s CPF: 25 Significant Events And Trends Navigating the Financial Realities of a Divorce

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For Practitioners Estate Planning Essentials Future-proofing your career in an AI-driven World

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Book Review We Need to Talk about Inflation by Author Stephen D King

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FPAS Events: 2022 World Financial Planning Day Chinese New Year Lohei Luncheon 2023 FPAS Global Conference and Dinner 2023 Firm Visits FPSB Global Meeting in Singapore - Farewell Dinner

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Asset Allocation: The Power of Diversification

FPAS' VISION

EDITORIAL BOARD

FPAS envisions that all Singaporeans have access to responsible and appropriate financial planning advice by raising the professionalism in the industry through education and shared code of ethics. FPAS also provides a range of services to consumers including:

CONTRIBUTORS Mr Adrian Tong, CFP® Ms Eliss Chen, CFP® Mr John Sim , CFP® Ms Joanna Leng , CFP® Mr Lawrence Chow, CFP® Ms Yash Mishra , CFP®

• Educate and inform the public of the need for objective professional advice in making secure financial decisions.

FPAS PUBLICATION Production of the Magazine.

• Develop and maintain high ethical standards within the CFP professionals.

CHIEF EDITOR Ms Yash Mishra, CFP®

Please email events@fpas.org.sg for advertisment / article contribution.

• Ensure sufficient professional and ethical standards to maintain the confidence and trust of consumers.

• Provide education, training and information to our members to enhance their skills in providing holistic and objective financial advice.

• Represents the industry and CFP professionals to continue to raise the professionalism of the industry and to provide high quality financial advice to Singaporeans.

Financial Planning Association of Singapore (UEN: S99SS0008L) 3 Temasek Avenue Centennial Tower #21-00 Singapore 039190 Website: www.fpas.org.sg | www.FPA.sg Tel: (65) 6829 7166 Email: admin@fpas.org.sg CFP®, CERTIFIED FINANCIAL PLANNER™ and and AFP®, ASSOCIATE FINANCIAL PLANNER™, and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. Financial Planning Association of Singapore is the marks licensing authority for the CFP® and AFP® marks in Singapore, through agreement with FPSB. AFPCM, ASSOCIATE WEALTH PLANNER is registered certification marks of the Financial Planning Association of Singapore.

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Financial Planning Magazine | December Issue

President Message

By Dr Ben Fok, CFP®

It is with profound honour and excitement that I address you as the newly elected President of the Financial Planning Association of Singapore (FPAS) for the term 2023 -2025. At the same time, I extend my warmest welcome to the December 2023 issue of FPAS Magazine, where we are dedicated to commemorating FPAS 25th Anniversary.

Established in 1998, FPAS was founded to address the growing need for financial planning services in Singapore. In its early years, FPAS focused on developing and promoting the practice of financial planning among its members. This included providing education, training, and resources to financial planners to improve their skills and professionalism.

Since then, FPAS played a significant role in the development and promotion of financial planning education and certification programs in Singapore. One of the notable milestones was the introduction of the Certified Financial Planner (CFP) certification in Singapore, which became the standard for financial planners seeking to enhance their knowledge and skills.

FPAS also worked hard to establish relationships with other financial industry associations and regulatory bodies in Singapore. This helped to integrate financial planning into the broader financial services landscape and ensure that it met regulatory standards.

The significance of this milestone cannot be understated. For a quarter of a century, FPAS have been steadfast in our commitment to nurturing a community of professionals who are not only well-equipped to navigate the complexities of finance but also unwavering in their dedication to ethical practice.

Our journey, as an association has been marked by resilience, learning, and growth. FPAS continued to evolve and adapt to the changing financial landscape, incorporating new technologies, practices, and regulations into its framework. Hence, throughout these 25 years, FPAS has consistently raised the bar for what it means to be a financial planning professional.

Another great milestone is the collaboration between the Singapore University of Social Sciences (SUSS) and FPAS. Since 2017, FPAS modules have been part of the SUSS elective module FIN379, Personal Financial Planning. The FIN379 course prepares the students to explore

the scope of financial planning while pursuing their Bachelor of Science in Finance.

As we reflect on our past, let us look to the future with a sense of purpose and ambition. The financial world is undergoing a profound transformation, and FPAS is positioned at the forefront of these changes. We are dedicated to equipping our members with the knowledge, skills, and resources they need to thrive in this dynamic environment.

In this special 25th-anniversary issue of FPAS Magazine, we honour the journeys and contributions of our members. It serves as a testament to the passion and dedication that define our profession. I extend my heartfelt gratitude to all our members, both past and present, for their unwavering support and commitment to FPAS. Your tireless dedication has been instrumental in shaping our association, and it will continue to be the driving force behind our future success.

In celebration of this significant milestone, FPAS has planned a series of exciting events and initiatives throughout the year. I encourage each one of you to actively participate, connect with your fellow members, and contribute to our shared journey of excellence.

As of writing FPAS is getting ready for the inaugural global conference and CFP conferment ceremony 2023. In early October, FPAS celebrated the 7th World Financial Planning Day (WFPD).

We have also participated in the CPF “Ready for Life” festival as part of the campaign for the WFPD consumer outreach. This is a collaboration with MoneySense and the CPF Board.

As we embark on this new chapter in FPAS’s history, I want to reaffirm my commitment to serving you, our members, with the utmost dedication and transparency. Together, we will build upon the legacy of our association and create a brighter future for the financial planning industry in Singapore.

In closing, let us celebrate not just the achievements of the past 25 years but also look forward to a future where financial planning in Singapore is even more robust, accessible, and inclusive. I have no doubt that with the dedication and commitment of the FPAS and its members, Singapore will continue to be a shining example of responsible financial planning and management.

Chief Editor Message

By Yash Mishra, CFP®

In 2023 we celebrate 25 Years of FPAS, silver jubilee of a professional member organisation that is dedicated to championing financial literacy and raising the professional standards of the financial planning industry through education, awareness and promoting the global standard of financial planning excellence the CFP accreditation.

Enjoy the clicks from the global financial planning day conference event!

This December issue celebrates this milestone of looking forward to the next 25 years in Turning Silver to Gold – not with alchemy but with holistic planning and harnessing technology, a perspective shared in the article Generative AI and whether the future is robo-advisers. We trace Singapore’s robust Central Provident Fund CPF scheme as it has helped us prepare for our retirement as a comprehensive pillar of personal savings. The current global backdrop is still uncertain with slow global economic growth, war between a Ukraine & Russia

contribute to high energy and food prices. All contributing factors where major developed economies like UK, Germany teetering on recession with central banks trying to rein in inflation. Real estate and property remain an inflation hedge and we discuss the impact of high interest rates on rental yields. Resilience is also about planning for curveballs be it insurance planning for special needs or moving forward after a Divorce.

In our book section review, of Stephen King’s ‘We need to talk about Inflation‘ highlights the nuances and conundrum of monetary policies and the tight rope act of reining in inflationary trends that can have a corrosive effect on personal portfolios longer term.

As we approach the year end, we take a moment to pause, reflect, raise a toast to the 25 years as celebrations and look forward to the golden jubilee!

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Financial Planning Magazine | For Consumers | December Issue

Asset Allocation

The Power of Diversification

WRITER

Yash Mishra, CFP®

In an investment portfolio, one of the most important decisions one can make is that of Asset Allocation.

WHAT ARE THE MAJOR ASSET CLASSES? As we build out our investment portfolio, we need to create a welldiversified portfolio that a holds many asset classes. This essentially means that it needs to be spread across the following asset classes.

• Stocks / Equities: - U.S. stocks - Well-established foreign markets including home country - Less established or emerging markets • Bonds / Fixed Income: - U.S. bonds, including agencies - Tax-free bonds - Foreign bonds - Investment-grade bonds - Below-investment grade or high-yield bonds • Alternatives and less conventional asset classes / strategies: - Commodities - Venture capital/private equity - Hedge funds = Digital Assets – the new kid on the block = Real Estate Assets – Age old favourite • Cash o As a defensive tactic o As part of market timing for tactical weightings - Emergency cash reserves for contingencies - Quarantining cash for short term goals As we now appreciate the broad asset classes, the decision not to invest in an asset class or strategy (e.g., emerging markets or hedge funds), especially when it is much in vogue, is a critical decision.

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DEVELOPING AN INVESTMENT FRAMEWORK AND STICKING TO IT To manage a portfolio effectively longer term creating a framework by which asset allocation decisions are made is key to the longer-term return characteristics of the Portfolio. The Dalberg Advisors research shows that up to 90% of portfolio returns can be attribute to asset allocation characteristics when measured empirically over longer periods of time.

As investors, we are human and when it comes to our hard-earned money, we can be emotional about it especially when market volatility erodes some of the returns. We therefore, need to adopt a disciplined approach to investing, keeping the investment framework intact and then rebalancing the portfolio periodically especially when any particular asset class takes on an overweight portfolio position.

Often, to instil that discipline in that approach a trusted financial professional can help.

KEEP AN EYE ON FEES Fees can erode the Investment return of your portfolios, so as you design the diversified fund portfolio, remember to keep an eye on the Total Expense Ratio (TER) of the funds as paying for Active Managers can be expensive. A cost-efficient way to access market returns are ETFS (exchange traded funds). These can be use as core holdings in a portfolio to access market returns in a cost-efficient way.

LEADERSHIP OF ASSET CLASSES: CHANGES ALL THE TIME Since the mix of investment in the portfolio largely determines the returns, we look at the historical returns over 20 years will show you that there is no one asset class that consistently is the highest performing asset class over any longer-term rolling periods. Therefore, timing and holding one particular asset class will result in suboptimal portfolio return outcomes.

IN CONCLUSION

Given all the factors discussed, investors need to pay key attention to their investment portfolio, ensure that there is disciplined rebalancing within asset classes to maintain the allocations and finally not let emotions corrode the investment framework.

Financial Planning Magazine | For Consumers | December Issue

Retirement Planning

Endow Your Silver Years With A River Of Gold Retirement planning is a critical aspect of financial management that often gets overlooked until it’s too late. As life expectancy continues to rise and the dynamics of the economy evolve, preparing for retirement has become more important than ever. Whether you are just starting your career or are nearing the end of it, understanding the fundamentals of retirement planning can make a significant difference in ensuring a comfortable and fulfilling retirement. It always pays to plan ahead with the end in mind.

CONVENTIONAL RETIREMENT PLANNING – THE ASSET STACKING METHOD The traditional wisdom often preach that we should continuously focus on accumulating various assets in the likes of properties, equities or endowment products, in order to attain a target capital upon your intended retirement to start drawing down from.

However, most of the time, this has been done in a haphazard manner of simply acquiring various assets without consideration of how it fits into the overall portfolio, as well as if the timeline fits into the life stage of the individual.

While stacking up various assets is good, however during the retirement years, what we need is having a stream of income, instead of sitting on assets that may or may not provide cash flow. An example is when individuals pursue upgrading their residential property to one that’s of higher market value. This process may allow your net worth to increase as the property value increases over time, however the property you are staying in does not generate any cashflow for you. The only way is to sell it and purchase a property of lower value to release cash back in your bank account. The risk to this strategy is exposure to concentration risk of your overall portfolio and that your assets are not transferable to your next generation.

CREATING A RIVER OF GOLD – THE INCOME STACKING METHOD As the focus during the retirement years is creating income to replace your employment income, the strategy in planning for retirement should then be creating “rivers of income” from multiple sources.

When we derive income from multiple sources, we can mitigate concentration risk by diversifying the source of income, so that when one pays lower amounts or fails to pay at all, there are other incomes streams that can offer a buffer and not affect your living expenses during retirement. Hence, the strategy of stacking income will also depend on the nature of the income, whether it’s guaranteed or non-guaranteed basis. An example of guaranteed income could be CPF Life, which offers a good foundational lifelong income for individuals. Non-guaranteed income are usually investment in nature, such as dividends from equities, funds or even rental income.

One of the key advantage of creating streams of income is that some sources of incomes can be transferrable to your children to become wealth machines for next generations.

Imagine if you create a dividend portfolio for yourself to enjoy regular dividends, both the capital and the ongoing income from the portfolio can be transferred to your loved one upon your passing for them to continue enjoying your hard earned wealth.

HOW TO START STACKING INCOME? Once you have a grasp of your financial situation, you can create a retirement savings strategy. This strategy should outline how much you need to save each year to achieve your retirement goals. We call this the “LEGO Method”.

Key consideration of this strategy include:

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Length of Time to Retirement

Time is everything and time is money in retirement planning. The amount of time you have is of utmost importance to decide how much risk you can take and how much you need to set aside to arrive at your goals.

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Evaluate

Check your current financial status to take stock of how much assets you have already accumulated, as well as your current cashflow.

Determine if you are investing sufficiently or if you are achieving high enough returns on your investments. Most importantly, are your assets working together and well diversified to help you reach your retirement goals?

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Grow

Regularly contribute to your retirement accounts, and taking advantage of existing retirement frameworks such as CPF Investment Scheme, SRS and transferring your CPF-OA balance to CPF-SA account.

The power of compounding interest means that even small contributions can grow significantly over time.

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Opportunities & Optimisation

As you age and your circumstances change, it’s important to reassess and adjust your retirement strategy. This might involve increasing your savings rate, changing your investment allocation, or making other adjustments based on your evolving needs.

IN CONCLUSION

Retirement planning is an emotional transition for most adults. It’s about adjusting your lifestyle from working to non-working or reduced work capacity, change of sense of identity and social circles. Given the numerous changes that will take place upon retirement, having financial stress can be avoided by planning this out early to have a peace of mind.

By setting clear goals, assessing your financial situation, creating a savings strategy, and accounting for inflation and healthcare costs, you can embark on a journey toward a fulfilling retirement. Whether you’re just entering the workforce or are close to retirement, taking proactive steps today can lead to a more comfortable and enjoyable tomorrow. Remember, the key to a successful retirement is not just the amount of money you save, but the thoughtful and strategic way you plan for it.

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Financial Planning Magazine | For Consumers | December Issue

Estate Planning for Someone Special Estate planning can seem daunting for anyone, but for families with a loved one who has special needs, it can feel especially overwhelming. “Special needs” is a broad term that encompasses a wide range of physical, cognitive, mental health, developmental, and other disabilities that impact a person’s ability to function independently. With advances in early diagnostics and Singapore’s rapidly aging population, the number of individuals with special needs is growing. Proper estate planning is critical to provide the support and care these individuals need throughout their lives.

While the fundamentals of estate planning are similar, there are additional concerns when planning for a person with special needs (PSN). A major worry is ensuring their well-being and ability to live independently after the passing of the primary caregivers. Fortunately, there are specialised tools that are only available to PSN caregivers to help address this concern.

SPECIALISED ESTATE PLANNING TOOLS One of this tool is the Special Needs Trust, through the Special Needs Trust Company (SNTC). Such a trust can be very affordably setup and a caregivers will be aided by a trained case manager from SNTC to draw up a specialised plan for the long term care of the PSN. Another tool is the Special Needs Saving Scheme (SNSS), also administered by SNTC. It splits the caregiver’s CPF monies into monthly distributions instead of a lump sum gift when doing a traditional nomination.

PROMOTING INDEPENDENCE: A CRUCIAL EVALUATION However, effective special needs planning requires looking beyond these tools. An important assessment must be made by caregivers on the ability of the PSN to be able to live and function independently after their demise. An important starting point for this evaluation is to determine if the PSN is able to work and earn a living wage. If they are unable to remain gainfully employed for the long term, financial provisions may need to be made for their long term care.

Thinking of the required care can begin with assessing if the PSN can perform basic Activities of Daily Living (ADLs) like dressing, feeding, bathing, toileting, ambulating independently? If not, caregivers may seriously need to consider institutional care for their PSN. SNTC’s case managers will be able to assist on available choices of nursing homes, given the amount of care needed.

This prevents the caregiver’s CPF monies designated for the PSN’s inheritance from being misused or squandered by the PSN. A detailed discussion and use of these tools and how they can be incorporated into estate planning is beyond the scope of this article. Caregivers are encourage to talked to an experienced estate planners who are familiar with the use of these specialised tools.

If the PSN is able to hold down a job and remain financially independent, caregivers should assess if the PSN can manage their money well. At its most basic level, can they determine if the change they received back from their purchase is correct? Would they spend all their monthly pay in a single impulse purchase? Do they know how to use various digital payment technologies?

Besides the important skill of managing money, there is the issue of functional ADLs. This can be a really long list, but here are some practical skills to start evaluating: • Buying food at a hawker centre • Cooking a meal on their own • Using modern communication devices like mobile phones, WhatsApp, email etc

• Travelling independently on public transport • Manage household chores (laundry, sweeping, mopping, cleaning etc)

BEYOND ESTATE PLANNING: FOSTERING A SUPPORTIVE COMMUNITY The adage “It takes a village to raise a child.” can be adapted for our purpose: “It takes a Community to support a person with special needs”. Caregivers must focus on building a community that will support their PSN for the long-term. This means nurturing relationships with extended family, friends, professionals and care organisations that will continue providing care after the caregivers pass on.

I cannot emphasise the importance of this step and this needs to begin soonest. As a parent with a child with special needs myself, I am

constantly educating my other son on how he needs to understand and support his special needs sibling. At the same time, I’m mindful that once my wife and I are no longer around, the burden of care will fall squarely on his shoulders, and it may be too heavy a burden for him to bear all on his own. As such, we are constantly involving our extended family in activities we organise that facilitate interactions between them and my special needs son. This effort extends beyond our extended family to the wider community we are in as well. For me, this is my church and the people around me. With a strong support network, the PSN can continue leading a fulfilling life.

CONCLUSION

Estate planning for PSNs is a growing need in Singapore. While specialised trusts and nominations are critical tools, thoughtful caregivers must look beyond legal structures. Nurturing a lifelong care community is vital to ensure quality of life for PSNs 6

when primary caregivers are gone. With proper planning and support networks, families can ensure their loved one’s needs are provided for. Though challenging, special needs planning is deeply rewarding work for financial planners.

Financial Planning Magazine | For Consumers | December Issue

Digital Gold as an Inflation Hedge Cryptocurrencies were designed as encrypted data string that denotes a unit of currency.

It is monitored and organised by a peer-topeer network called a blockchain which also serves as a secured ledger of transactions e.g. buying, selling and transferring. As an emerging technology, it morphed into being referred to as Digital Gold by its supporters.

Today, let us take a look at Cryptocurrencies, and see how they compare with precious metals in the real world.

First, let us take a look at the history of Bitcoin again. Bitcoin was created by the mysterious Satoshi Nakamoto in 2009, in its early days, Bitcoin garnered attention primarily from tech enthusiasts, but it gained traction after being used for real-world transactions, most notably the purchase of two pizzas for 10,000 bitcoins in 2010. Its price surged from a few dollars to over $1,000 by 2013, attracting mainstream interest. However, challenges, such as the Mt. Gox exchange hack and regulatory scrutiny, caused price volatility and setbacks. Bitcoin continued to mature, with growing institutional interest and record-breaking prices in 2021, solidifying its position as a transformative digital asset.

Bitcoin’s history is characterized by its journey from an obscure concept to a global financial phenomenon. It has faced numerous trials, from security breaches to scaling debates, yet it remains a central figure in the world of cryptocurrencies, and many are still in delusion that it will reshape the way we think about money and digital finance.

So, on the surface, Cryptocurrencies seemed to suggest to ‘those who believed to mimic gold, because it has artificial scarcity, which means, it’s programmed to have a limited supply build in, thus seems to be able to retain

value due to said artificial scarcity. However, taking Bitcoin for example, it had grown from worthless in 2009 to over $1000 around 2013 before falling to $172 in 2015. Since then, it has gone up and down again, with its most recent and highest peak being close to $70,000 in 2022 Nov and is now trending between $20,000 and $30,000. On the other hand, real gold had risen from around $750 in 1994 to today’s around $1,700 and has been moving around $2,450 and $1,450 for the past 15 years. As we can see, Bitcoin is far more volatile and recently had lost more than half its value within a year and dropped close to 80% at its worst, while the worst gold ever did was 27%. This demonstrates that Bitcoin is far more volatile and high risk than real gold and is thus not a good short-term storage of value.

As for a long-term inflation hedge, Cryptocurrencies had been on the rise ever since their inception, unlike real gold, there are many risks involved with Cryptocurrencies. Now let us see its main problems: • Unlike precious metals, which can be used for decorations and certain industrial usage, Cryptocurrencies have no real-life application.

• Real precious metals, like gold, have true scarcity, while Cryptocurrencies has artificial scarcity, the problem is that we can’t create new kinds of precious metals to compete against existing ones like gold and silver, on the other hand, as of today, there’s already around 23,000 different Cryptocurrencies in the market. This means that there can be an unlimited supply of new Cryptocurrencies in the future, which is not the case for Gold and Silver.

• Gold and Silver have a common perceived value and an open market, it is easy to convert precious metals to cash. On the other hand, Cryptocurrencies have a far smaller circle of acceptance.

• Cryptocurrencies are stored in a crypto wallet, and your device is broken, all your Cryptocurrencies are gone. If you lock gold in a safe and lose the keys, you can still crack open the safe.

• Unlike banks, which stores real money and can provide gold locker to help you keep your gold, Cryptocurrencies banks, exchanges and Hot Wallets are not regulated by governments, and if you chose to deposit your Cryptocurrencies with them, it is far more risky as they are far more venerable to attacks. While the Block chain technology that Cryptocurrencies is based on is almost impossible to hack, the same cannot be said of all these online services providers.

From what we can see, due to the intangible nature of Cryptocurrencies, they have no intrinsic store of value that is the foremost attribute of any currency. While they are a good speculative tool due to being highly volatile, but to use them as a long-term inflation hedge is rather inappropriate as they carry far higher risk than most other investments.

It is an emerging technology that can be used as a digital payment mechanism without any of the intrinsic store of value associated with ‘currency’. The underlying blockchain technology has multiple use cases including for the use of Central Bank Digital currencies (CBDCS)

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Financial Planning Magazine | For Consumers | December Issue

Property as an Inflation Hedge and Diversification

People had always been an popular investments for many investors, mainly due to its perceived effectiveness as an inflation hedge, as well as the fact that it’s an tangible assets, and thus is deem to hold their value better during inflation, additionally, property investment offers a combination of rental income and potential property value appreciation over time, making it an attractive long-term investment option. Today, we will mainly look at Property through two of it’s main perceived strength, namely, as an Inflation Hedge, and as a diversification tool.

As an Inflation Hedge : Real estate tends to appreciate over time, and rental income can increase with inflation, thus many investors believe that property can hold their value better during inflation. Low cost of leverage due to mortgage interest usually being low compared to many others financial derivatives and limited supply also contribute to its perceived effectiveness as an inflation hedge.

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However, what investors should realize that real estate investments is not risk proof, and property bubble bursts is not uncommon in recent history. Using mortgage to invest in property can sometimes leads to financial stress during economy when one is unable to secure a rent paying tenant. In the long run, a basket of blue chip global stocks is capable of outperforming property investments, unless we look at property in emerging markets, which comes with itself additional risks.

Also, keep in mind that the actual value of the building actually decreases with age due to wear and tear, and you would need to constantly spend money to upkeep the physical building to retain the value.

Moreover, if the building is not on freehold, the value of the land actually decreases with an ever shortening lease, for the sake of investments; one should something with at least 90 years of remaining lease and plan to sell it before the lease drops to 50.

WRITER Adrian Tong

For Diversification: Property was believed to have low correlation to stocks and bonds, can is perceived to reduce overall portfolio risk.

Many believes that income from properties can provide stability during market downturns. However, this might or might not be the case, depending on the nature of the property market one invests in. In countries whereby home ownership is uncommon and many people rent their home, it might be true that even during economy downturns when financial markets crashes, the rental market can remain stable because the tenants still needs a roof over their head.

However, in countries where by local home ownerships are high, such as in Singapore, the rental market is mostly supported by foreign workers, in these countries, during an economy downturn many foreign workers might be made abundant and they might return home, pulling the rental market down, in such a nation, property market tends to be more of an lagging indicator rather than an effective diversification.

Financial Planning Magazine | For Consumers | December Issue

One must also remember that while property in some nations can have have low correlation to stocks and bonds, a property by itself is usually a concentrated risk as your need to invest a huge enough just to acquired one.

While with just a few thousand dollars of investments, you can diversified stocks and bonds by buying just a few units of different counters, or use a ETF or Unit Trust to diverse your risk, you would need to invest at least 8 figure USD to build a diversity property portfolio. Using REITs to invest in property would allow one to invest in a diverse portfolio, however one need to check if the REITs invest in commercial or residential properties, as REITs that invest in commercial properties would tend to have higher correlation to stocks and bonds, and would not be idea for the sake of diversification.

With these in mind, in order to build a good property investment portfolio, one would need to consider the below factors.

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Amount of investable funds, as mentioned above, just investing in one property can be anywhere from a few tens of thousands in some nations to a million and above in some cities like Singapore. If one does not has enough funds to invest in at least 2 properties in 2 different countries or at least 2 different neighborhoods, one might consider a mixture of residential and commercial REITS. One can also consider investing in the stocks of construction companies during a cycle of property bull market for a short term exposual.

The countries and neighborhoods of the properties. The value of property in nature is highly affected by government policies, and thus, in picking properties to invest in, one’s home country might not always be the best choice, even if it seems attractive due to familiarity. One needs to consider factors like stamp duties, laws over property purchases especially when investing in overseas properties, as well as cooling measures when selecting which countries’ properties to invest in.

Besides government policies, the ease of mortgage from the local banks and the Mortgage Interest vs Rental income ratio needs also be consider, as this will determined if one should take higher or lower mortgage to finance the investment.

What is even more important is the neighborhood. As mentioned above, the actual intrinsic value of a property actual decrease with time due to wear and tear of the building and a shortening lease if it’s not on freehold, for the property that’s on leasehold to increase a value, it would requires the value of the land in the neighborhood to goes up, this can only happens with the local government upgrading the nearby public utilities, improving infrastructure such as new train stations or new malls. A property needs to be in a growing neighborhood with more and more people moving in due to improving living conditions, as well as better education, work or business opportunities, for its value to increase in the mid to long term.

In a nutshell, Property investing can be a good Inflation Hedge and Diversification if one picks the right strategy. One needs to mainly consider one’s own financial situation, and explore the available choices. Houses are not build equal, and the location of the house will greatly affect its potential rental returns and value grow. In Real Estate, location is almost everything, and thus, one needs to research the country and neighborhood before doing an investment, alternately, one can invest in a portfolio of REITs and property focus Unit Trusts and let the professionals do the job of finding the right property to invest in. It would be highly advisable to speak to a CPF practitioner to explore your options before making any property investments, as property by nature is a long term investments that is highly illiquid, buying and selling of one property can takes weeks to months.

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Financial Planning Magazine | For Consumers | December Issue

Singapore’s CPF

25 Significant Events and Trends

Since its establishment in 1955, the CPF has become an essential part of Singaporeans’ lives, providing comprehensive social security savings plans and supporting their retirement, healthcare and housing needs. This article outlines the major milestones in

1955 Home ownership scheme introduced, allowing members to use CPF savings to purchase public housing.

1970 Minimum Sum scheme introduced. Members required to set aside a minimum sum in their CPF account for retirement.

1987 Eldershield disability insurance scheme introduced, providing monthly pay-outs for severe disability.

1993 CPF Investment Scheme launched, allowing members to invest CPF savings.

1999

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CPF is established as a compulsory comprehensive social security savings plan.

1968 Medisave healthcare scheme introduced. Members can use CPF savings for hospitalization expenses.

1984 MediShield health insurance scheme introduced, providing additional coverage for hospitalization expenses.

1990

Medifund endowment fund introduced by government to help needy patients.

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1995

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Medisave contribution rates increased to widen coverage. Housing grants introduced for first.

CPF’s history and its current trends. From housing schemes and medical insurance to long-term care policies, CPF has evolved to meet the changing needs of Singaporeans. Let’s delve into the details.

2016 Silver Support scheme introduced to supplement income of poor elderly.

2013 CPF contribution rates increased for older workers up to age 65.

2010

CPF Life annuity scheme introduced.

2007 CPF contribution rates increased for older workers to boost retirement savings.

2001

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CPF Life monthly pay-outs increased. Home Protection Scheme expanded.

2015

MediShield Life universal health insurance scheme announced.

2012 Workfare income supplement scheme enhanced to boost retirement savings of low

2009

Special account introduced for members’ Medisave contributions.

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2003

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Baby Bonus scheme launched to support parenthood. CPF can be used to pay childbirth hospital bills.

Financial Planning Magazine | For Consumers | December Issue

2017

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Re-employment ages raised to 65 and 70.

From these milestones, we can observe how CPF has evolved over the years to support the following needs of Singaporeans:

Retirement Adequacy: Care shield Life severe disability insurance introduced.

2019 CPF contribution rates for older workers raised to 37% to boost retirement savings.

2021 CPF Annual Limit for voluntary contributions was increased to $18,000 for those under 50, to enable members to accumulate more savings.

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2018

• Raising CPF contribution rates and Minimum Sum over time to ensure members have enough savings.

• Introducing schemes like CPF Life, Silver Support to boost monthly pay-outs in retirement.

• Encouraging voluntary top-ups and providing grants to lower-income members.

Matched Retirement Savings Scheme introduced to help low

Housing Policies:

2020

Medical Coverage:

• Expansion of grants and housing schemes like Studio Apartments to allow more flexible use of CPF for home ownership.

• Relaxing rules to enable members to pledge property to top up CPF for retirement.

• Expanding scope of MediShield Life and Careshield Life to provide more comprehensive coverage.

• Increasing Medisave withdrawal limits and grants to enable using CPF for more treatments.

Extended Retirement Sum Topping

2022

Long Term Care: • Enhancing Eldershield and Careshield Life to provide monthly payouts for severe disability.

• Allowing flexible use of CPF to pay for assistive devices, home healthcare, disabilities.

Overall, the trends reflect a policy priority to strengthen CPF as a comprehensive social security system for retirement, healthcare and housing needs of Singaporeans.

CPF contribution rates for workers 60 to 70 will be raised over 2023

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Financial Planning Magazine | For Consumers | December Issue

Navigating the Financial Realities of a Divorce We all want a happily ever after. I know I did. I never imagined or planned for divorces when thinking about my happily ever after.

Divorce is often a daunting process. It takes up time, energy and money and demands a lot of emotional resilience. When it happens, sorting out one’s expenses and negotiating a settlement woes usually pretty low down in the priority list, I know from personal experience that was one of the last things on my mind. Regardless of whether or not you are prepared the financial reality of the process can hit hard for all parties.

Happily married, not happily married, divorced or not, if you have been depending on your husband to manage the finances, you need to reconsider this. What if you are happily married and something happens to him? Would you be able to make the investment decisions on his behalf? Do you know when and how and where payments for items need to happen?

What happens if his salary stops because of unforeseen circumstance, can you take over the wheel?

It is important for couples to know how to handle their household finances, no matter their employment status.

Often the financial planning aspect can be planned into 3 phases:

Pre-Divorce Phase

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During Divorce Phase

Post Divorce Phase

As the relationship gets strained and you feel that Divorce may be imminent , it is good practice to start off by: 1. Understanding the divorce process and its cost • An uncontested divorce is $ 1500- $ 2000 vs a contested one that $10,000-$ 35,000 • Legal fees can rack up depending on seniority of partner $ 800/hr $350/hr 2. Organising and documenting the family’s financial situation • Gathering key evidence and documents such as matrimonial assets and debts • Spouse’s IRAS statement, Will, Property Deed, Bank statement, Utilities, Groceries, Credit Card statements, Internet Mobile bills, Vehicle maintenance receipts,Meals, Clothing • Children’s education: School fees, tuition fees • If you are unemployed or, gave up employment to support the family needs, do consider your post-divorce employment opportunities at this stage 3. Understanding your financial, emotional and practical needs • Should you self-represent or seek out a lawyer? How much time does it take?

• How does divorce process affect your work hours and childcare schedule?

• Would contesting the divorce be affordable?

• Assess if professional support is required as lawyer, financial planner for validation?

4. Consider a maintenance cover • In anticipation of the expenses and changes in financial situation, you may consider applying for a maintenance order for yourself and your children • It is crucial to be informed of the procedures so you do not end up wasting time and resources trying to figure out the next course of action

Financial Planning Magazine | For Consumers | December Issue

5. Seeking professional support for legal, financial and emotional matters • This period of emotional stress can negatively impact your mental health, sense of wellbeing and judgment. Therefore, seeking support is recommended to retain objectivity.

• If less pricey options to private legal counsel is required, legal aid bureau provides probono to Singaporeans and Singapore PRs for a number of legal issues. Contact them to check eligibility.

Association of Women for Action & Research (AWARE) has island wide legal clinics that provide you one time 20 min free counselling session including referrals as required.

6. Planning for yourself and your children During the proceedings and post divorce, you will need to consider the following: • What new financial needs will your children and you need?

• What financial support is required ?

• What new environment do you and the children need to grow up in ?

• How do you protect your financial assets during and post divorce?

Sharing my Personal Journey: My personal experience during my divorce was feeling sad for myself. I did not set out my finances straight right from the start and it has affected me greatly after the divorce.

I did not have spouse maintenance, and I had child maintenance. Thinking a final judgement and the affidavit makes everything set in stone, it was not. My ex-spouse had avoided making child maintenance payments for many years, and this is what I went through: • Take a day’s leave, go to the court to take a Q number, wait for my turn, get a mediation date, make payment.

• Take a day’s leave, go to court, attend mediation, unsuccessful mediation, wait for the court date.

• Take a day’s leave, attend court, Judge asks for 6 months show-payment.

• Receive maintenance for 6 months, stops.

• Repeats process.

Eventually, I gave up and changed my goal to focus on peace of mind , improving myself, and work on being financially independent,

and being a better parent. Looking back, with the knowledge I have now, I wished I had someone to share with me their experience, so I could have planned my finances better even before the breakdown of my marriage.

If you’re going through a divorce, it’s important to talk to someone who can help you with the financial aspects and come up with a reasonable agreement for you and your children.

Here are some items you may wish to consider and add to your own items that apply to yourself. • Misc • Children’s living • Lodgings expense like food, • Utilities transport and after• Food school activities and • Transport entertainment • Lifestyle • Education Aside from the emotional and mental challenges, and aside from the finances, there are other things to consider and focus: a peace of mind and moving forward.

Let me share an example.

Husband and wife owned an HDB. Purchase price was at 409k and is now worth 550k.

They agreed in the following: 300k to wife to buy over the HDB 100% 2k monthly child maintenance till the child reaches 21 years old or finished tertiary education whichever is later.

Wife is happy with the settlement for a total of 550k and will forgo her CPF monies of $80k that she paid into the matrimonial home.

After understanding, it turns out, wife is not eligible to take up a mortgage loan in her own name. She didn’t have the income required and would have to work around the 300k amount to find a new place to stay.

The struggle was real: to find a safe place for herself and her daughter go live in within 300k.

Wife ended up negotiating a deal as follows: To forgo lump sum of $300k and child maintenance of $2k a month in exchange for 100% ownership of the matrimonial home. In numbers, she did end up with less, however, what she had secured for herself are:

A secure and stable environment for herself and her daughter, with no chance in environment. Same school, same neighbours, same friends. Wife does not need to worry about mortgage payments and be rest assured there’s a place she and her daughter can call home. Wife is able to focus on her work and daughter without the possible need of enforcing maintenance and have peace of mind to spend time and energy on what matters, also not to be entangled with the past and focus on life moving forward.

Sometimes, less can be more, even in financial planning, we need to be able to incorporate lifestyle and practicality as well, and while everyone is different, the need for thorough understanding of one’s circumstances is very important.

Plan to live out your dreams. I have dreams, despite the curveball life gives. They make my dreams bigger and bolder. The below are mine, and I wish you find your own dreams too!

My dream are: • To live in an apartment with outdoor space to have an urban farm where I can plant my own fruits and vegetables.

• Help plan and make non-profits profitable where they are financially independent, to grow and scale to do the good they have always wanted to.

• A medicine re-channelling portal where oversubscribed medication can be channelled to others that need it and yet unable to afford it.

• A dedicated job portal between organisations that support medical social workers from hospital to help caregivers who had to leave their previous work arrangement to find flexible work arrangement.

And remember, the difference between a goal and a dream is a plan!

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Financial Planning Magazine | For Practitioners | December Issue

Estate Planning Essentials As Singapore continues to age rapidly, wealth succession continues to a rising concern. Here is an estate planning essential pull-out guide for reference for both financial advisors and general public. It is important for everyone to understand the various instruments to assist the family to do their estate planning to preserve their family wealth accumulated during the prosperous years.

The times of rapid wealth accumulation for most families is unlikely to return as Singapore is no longer a developing country.

Financial advisers can use the boxes beside each item to grade their competency (1 to 10 with 10 being very competent). Families can use the boxes beside each item as tick boxes to assess their use of each item and the relevant weightage. Each instrument and/or method of distribution has its pros and cons as well as function. Families at different life stages, or different family structures, family values, types of asset classes ownership may use different instruments in a variety of weightage. They should regularly seek advice and review (6th step of Financial Planning of Certified Financial Planning (CFP®) process) their estate plan with relevant professionals.

The below is not a comprehensive guide.

ESTATE PLANNING LEGAL INSTRUMENTS

(commonly available in Common Law jurisdictions)

Property Joint Tenancy vs Tenancy In Common Non-Property Joint Assets e.g.

Bank and Investments Accounts Nominations (Insurance, CPF)

Will Trust Lasting Power of Attorney (LPA)* Buy Sell Agreements

INTESTATE VS WILL • Intestate: A person who passes away without a Will. The estate is distributed according to the Intestate Law where the beneficiaries and the portion of distribution is pre-determined by law.

Terms: o Letter of Administration is required to be applied to the Court in order to access and distribute the assets. o Office of Public Guardian: handles estate sizes of less than $50,000 for a fee o Administrators: Court appointed persons to handle the distribution the estate •Will: A legal document signed in the presence of two eligible witnesses to indicate the wishes of the person executing the Will, for the distribution of their assets o Testator: The person making the Will o Grant of Probate is required to be applied to the Court in order to access and distribute the assets. o Executor/s: The persons1 appointed in the Will to gather and handle the distribution of the estate. o Trustee/s: The persons1 appointed in the Will to hold the assets for distribution of the estate. o Testamentary Trust (TT): A Trust set up upon demise of the testator within the Estate for distribution based on the conditions chosen by the testator. Example of such conditions include age or purpose of the monies to be used for.

Beneficiaries of the TT does not own the assets till the assets are distributed to them or used for the care of them.

Family Member:

Intestate

Estate Planning Instruments

Letter of Administration

1. Wills 2. Trust 3. Nominations 4. Joint Ownerships Assets

Last Power of Attorney (upon Mentally Incapacity)

WRITER Eliss Chen, CFP®, AEPP®

Administration Guardians

Demise *Firstly, LPA is technically living planning but is usually associated with Estate Planning. Secondly LPA is only legalised in some common law jurisdictions. For example, Malaysia does not have LPA legislation. A mentally incapacitated property investor with a Singapore LPA who owns a Johor Bahru property will have issues managing his Malaysia property like signing a tenancy agreement. Second, LPA made in Singapore is not recognised in Civil Law jurisdictions like Indonesia, Thailand or China.

PROPERTY DISTRIBUTION Joint Owner

Sole Owner

Joint Tenancy Distribution upon demise of one of joint owner Beneficiary C

Owner 1 40%

Owner 2 60%

Beneficiary A

Beneficiary B

Beneficiary C

Example of Tenancy In Common Distribution 14

Non-Estate Distribution

Grant of Probate

Joint Tenancy

Executor

CPF

Trustee

Joint Bank Account

Guardians

Insurance Nominations Trust Assets

Buy Sell Agreements

Joint Owner

Will

Beneficiary D

1

persons can be either a human or a licensed trust company

LIFE INSURANCE NOMINATIONS VERSUS ASSIGNMENTS • Insurance Nominations2 o Section 49L Trust Nominations • Irrevocable nominations where the Policy Owner no longer controls or own the policy • The policy can only be returned to the policy owner subject to trust beneficiaries’ approval • Nominated beneficiaries can only be to a limited category of beneficiaries. o Section 49M Nominations • Revocable nominations for Family Members or third parties like a charity • Assignment o Where policy owner (during lifetime) gives up the right of the policy to the assignee o Endowments or cash value policies can be “traded” via assignment to a third party 2

More details can be found in Life Insurance Association Guide

Financial Planning Magazine | For Practitioners | December Issue

TRUST

4. Influence a. Persons who potentially might influence the person who inherit the monies

Assets

Parent

Testamentary Trust

Living Trust

(e.g. when child is a young adult)

Immediate Distribution

Distribution methods

• Estate assets distributed over a period of time or over a delayed period or subject to conditions • Beneficiaries may be established via the Will or Living Trust Deeds and Letter of Wishes to only receive or to enjoy the income or use of the assets (Life Tenancy) • Final ownership of the specific estate assets can be different from Life Tenant beneficiaries who only enjoy the use of the assets o Example, assets are provided for a mentally incapacitated child. Upon demise of mentally incapacitated child, the remaining assets are distributed to their siblings.

ESTATE PLANNING CONSIDERATIONS 1. Ease and Cost of Distribution • Letter of Administration (usually more challenging, higher cost, with more delays) • Grant of Probate (usually lower cost, easier and time efficient) 2. Distribution Methods Distribution Consideration Value or Custom Based Distribution

Equality

Needs (Equity) Based Distribution

Asset Class Distribution

Age

Real Estate

Financial Literacy or Habits

Location of Assets

(Overseas vs Local)

Mental Capacity

Movable Assets

Objective Oriented

Businesses

Primogeniture (Firstborn Legitimate child e.g. eldest son)

Family heirloom

(e.g. Education)

Spouse

Beneficiary

Other family members e.g.

Adult children

3rd Party

(Potential Undue Influence, e.g. friends,business partners, or relationship partners)

Example of Consideration of Influence of various parties on Beneficiary

5. Ability • Ability to manage or utilise the assets to o Develop capabilities or pathways (example: Degree) o Grow the family wealth (example: 6% per annum growth of portfolio) 6. Tax Residency (of the Deceased and beneficiaries) • Estate Duty Taxes applicable for the Deceased’s Estate, if any • Income Taxes applicable for the beneficiaries receipt of estate income 7. Domicile • Domicile of Testator/Deceased o Legal Principle for determination of the jurisdiction of the distribution laws applicable for the deceased’s estate o Movable Assets follows domicile of the testator • Law of the Land o Immovable Assets follows the Law of the Land • Example, Foreigners are not allowed to own landed properties in Singapore (Non-Sentosa Landed) 8. Business Succession • Types of Business Structure and Ownership o Sole Proprietor, Partnerships, Private Limited o Majority vs Minority Ownerships o Participative vs Investor Ownership • Distribution instruments o Intestate Laws o Wills o Buy Sell Agreements to determine conditions of transfer of business shareholdings upon demise • Choice of Successors for Management of Business if applicable

Possible Equality Based Distribution Outcome

Desired Needs Based (Equity) Distribution

3. Pace of Distribution $1 million

100k Upon Demise of Testator

$2k per Month (Instalment)3

(Immediate)

One Time $200k upon Yearly Income of $200k adjusted for inflation

$200k Upon Age 35

(Time or Age Delay)3

(Conditions)

3

Example of a varied Pace of Distribution 3

Distribution via a Trust

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Financial Planning Magazine | For Practitioners | December Issue

Future-proofing your career in an AI-driven World 30 November 2022 may go down in history as the quiet beginning of a new Industrial Revolution- the Technology revolution of Generative AI. That was when OpenAI first launched “ChatGPT”, an amazing chatbot that could genuinely produce answers to queries we posted that were almost indistinguishable from a human response. This has revolutionised the way we work and even play. And for the first time in history, knowledge-based workers’ livelihood seems to be disrupted by this technology.

The financial planning industry is likewise impacted with the emergence of artificial intelligence (AI) tools like chatbots, roboadvisors, media generators and advanced data analytics. While AI is automating some routine advisory tasks, the role of financial advisory practitioner is unlikely to become obsolete. However, practitioners do need to expand their skills and knowledge to continue delivering value in an AI-driven world. This article provides recommendations on upskilling for this AI-centric future.

HARD SKILLS NEEDED

Certain technical capabilities will be crucial for practitioners in navigating industry transformation: • Data analysis and interpretation skills are important as AI provides more customized client insights. Practitioners need to be able to understand what the data means and apply it appropriately.

• Digital fluency across new platforms and technologies will be critical. Practitioners cannot be intimidated by AI and must proactively pilot new tools.

• Cybersecurity and ethics training is essential given increased reliance on digital data. Practitioners must implement robust controls and use technology responsibly.

• Learning the fundamentals of how AI models work, including limitations and biases, will allow better leveraging of these tools.

SOFT SKILLS MORE CRITICAL THAN EVER

While AI excels at number crunching, practitioners will continue providing the human touch through: • Advanced communication skills help clearly explain AI outputs and reassure anxious clients. Emotional intelligence is key.

• Change management skills enable gracefully adapting to new workflows and calming staffers worried about job impacts.

• Creativity, lateral thinking and flexibility will help differentiate human-centric strategies from AI-generated solutions.

• Building trust and rapport at a personal level remains essential and is impossible for machines.

UPSKILLING RECOMMENDATIONS

Specific steps practitioners can take to upskill include: • Getting your hands “dirty” by exploring the use of these AI tools and to understand their capabilities. There are so many tools, from large language model (LLM) chatbots to generate text, to AIgenerated art and music, to aggregation tools that combine various tools into one.

• Explore how these tools can be incorporated into your workflow to improve productivity. For example, crafting personalised emails to clients to update them on the performance of their portfolio.

Care should be taken to protect private and sensitive client data when using such external tools.

• Seeking mentorship from digitally-savvy colleagues or other industry practitioners on how they are adopting such new technology.

• Joining industry groups piloting AI applications to learn first-hand how these tools integrate with advisory practice.

• Attending conferences and events focused on AI innovation in financial services, like those organised by IBF. THE FUTURE PACTITIONER’S TOOLKIT

Embracing AI isn’t just about adding a futuristic edge to your LinkedIn profile. It’s a chance for practitioners to evolve, to stay relevant in a world where algorithms are constantly sharpening their pencils.

Knowledge is power, and understanding AI’s capabilities and limitations gives practitioners an edge in delivering informed and strategic advice.

As the financial advisory landscape evolves, so do the roles of human advisors. Imagine practitioners who are part-scientist, part-artist, and part-tech guru. These hybrid roles blend financial acumen with AI proficiency, creating a new breed of practitioners equipped to navigate the intricacies of an AI-driven world.

CONCLUSION

It is not the fastest or the strongest that will survive, but it is the most adaptable that will thrive. This is the same for the financial planning industry in Singapore. AI will have major ramifications on this industry, just like in almost every other industry. Financial practitioners who take ownership of upskilling and embrace this inevitable change will have a promising future in this AI-driven world. Blending new technical capabilities with their innate human strengths is key to futureproofing financial advisory careers.

Proactive learning and adaptation, practitioners can leverage AI to provide even better client experiences.

Therefore, as Trusted Advisors as we journey through this AI-driven world, let’s remember that financial advisory is not just about numbers on spreadsheets or lines on charts. It’s about dreams, aspirations, and the people behind the portfolios. It’s about the laughter, the tears, and the shared cup of coffee that makes every financial plan uniquely human. And that’s something even the most advanced AI can’t replicate – at least not yet.

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Financial Planning Magazine | For Practitioners | December Issue

Book Review

We Need to Talk About Inflation

- Author Stephen D King REVIEWED BY Yash Mishra, CFP®

After the world reopened from the Pandemic Lockdown, it found itself slow walking into a different paradigm – one in which Countries and large economies are teetering on recession, food prices spiralling fuelled by a War between Ukraine- Russia in Europe, high fuel prices that has resulted in high inflation.

Inflation is typically defined as a persistent and sustained increase in the price level of an economy.

It’s a definition that immediately causes problems. An increase in the price level sounds simple enough but, to have any meaning, it needs to be increasing relative to something else. An alternative approach is to think about inflation as the process by which money falls in value relative to something else. Inflation can thus be defined in terms of money’s diminishing ability to make a claim on a specific range of goods, services and labour.

It is the mechanism by which the value of the dollar, euro or pound in your pocket is eroded over time. Even this definition, however, comes with problems.

In a macro backdrop where large, developed economies in Europe saw double digit inflation and US in high single digits. Rising interest rates wreaked economic havoc in poorer developing economies as Srilanka, Bangladesh, Pakistan Until recently, central banks were worried that inflation was too low. Now, they are worried about the opposite.

Are they right to worry or is the upsurge of recent years still to be viewed optimistically, as a purely transitory phenomenon? Is Inflation ‘Transitory ‘as initially signalled by central bankers or ‘Persistent and higher ‘for longer?

In this historically informed and lucid book, the author, Mr Stephen king, senior economic adviser at HSBC, explains that the optimistic belief might indeed be true, but there is good reason to believe it is not.

He shares 6 key takeaways: 1

Central bank independence is no guarantee of price stability

2

Money matters and cannot be ignored

3

The “nominal world” can change remarkably quickly, with expectations slow to keep

4

Multiple objectives for central banks can lead policymakers astray

5

Central banks’ inflation forecasts are not entirely plausible – they will never forecast a major inflation “miss” relative to target; and

6

Bringing inflation back to heel is, to say the least, tricky

Above all, inflation is never truly dead. At best, it is sleeping but for now it’s well awake and wreaking havoc in real people’s life savings.

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Financial Planning Magazine | December Issue

Past Event

5 October 2022 | Capital Tower - Big Picture FPAS celebrates the 6th Annual World Financial Planning Day & Conferment Ceremony on 5 Oct 2022 along with our Guest of Honour, Mr Kee Rui Xiong, industry leaders and our fellow CFP members.

We are honoured to have Mr Kee to grace the event and providing his speech on the financial planning landscape in Singapore.

We were thankful to have industry leaders from Banking, Insurance and Financial Advisory sectors shared their view on how to recession-proof your finances, roles of advisors and managing consumer 4.0 during the panel discussion.

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Financial Planning Magazine | December Issue

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Financial Planning Magazine | December Issue

Congratulations to our class of 2022 in attaining CFP certification and we hope everyone have an engaging session.

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Financial Planning Magazine | December Issue

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Financial Planning Magazine | December Issue

31 January 2023 | Singapore Recreation Club With the ease of pandemic, FPAS can finally organised a face-to-face Chinese New Year Luncheon. It was heartwarming to see familiar faces at our humble gathering event.

Furthermore, we are delighted to have Ms Foo Mee Har, FPAS Special Advisor and Member of Parliament for West Coast Group Constituency (GRC) to join us in our jovial occasion.

We hope everyone have a prosperous and good fortune this Chinese New Year through our Lohei and the meeting of the God of Wealth (Cai Shen Ye).

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Financial Planning Magazine | December Issue

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Financial Planning Magazine | December Issue

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Financial Planning Magazine | December Issue

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Financial Planning Magazine | December Issue

16 October 2023 | Singapore Recreation Club We have concluded FPAS inaugural global conference and dinner 2023 on 16 Oct 2023 where we have 170 attendees.

FPAS President, Dr Ben Fok kickstarted the conference with welcome address.

We are honoured to have our Guest-ofHonour, Mr Kee Rui Xiong, Executive Director, Corporate Finance & Disclosures Department, Monetary Authority of Singapore to present the open address on “How the Financial Advisory Industry Can Serve Customers Better with 3 ‘T’s – Technology, Training and Trust”.

We are pleased to have speakers from the CFP global network for our panel discussions to find out about the major trends that are shaking up the advisor world and how to stay ahead of the curve.

Speakers profile (left to right): Ms Chuin Ting Weber, CFP® R, Membership & Public Education Chair, FPAS (Moderator); Mr Kevin R. Keller, CAE, CEO, CFP Board; Mr Norio Saido, CFP® R, COO, Japan Association for Financial Planners; Mr Paulo Colaferro, President, Planejar

Technology/AI How it will enhance (and not hinder) the future of Financial Planning by Mr. Brett Millard, CFP –FPSB Board Member

Psychology in financial planning by Paul Grimes, CFP – Chief Professionalism Officer, FPSB

What drives the public demand for financial planning? By Ms. Andrea Middel, CFP – FPSB Board Chairperson-elect

The key to financial planning success by Mr. Dante De Gori, CFP – CEO, FPSB Ltd.

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Financial Planning Magazine | December Issue

CFP Conferment Ceremony 2023 Congratulations to our 36 newly conferred CFP Professionals who have attained the global excellence in financial planning destination and are now part of the 213,000 CFP global network.

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Financial Planning Magazine | December Issue

FPAS is honoured to celebrate 25 years of delivering CFP certification programme in Singapore. The 25th anniversary is a significant milestone to celebrate because it symbolizes strength and endurance. It shows that the organisation has stood the test of time.

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Financial Planning Magazine | December Issue

Following are fun-filled moment captured during the networking between our members and delegates, enjoying the special curate Singaporesling and delicious buffet dinner.

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Financial Planning Magazine | December Issue

FPAS Global Conference and Dinner - Interviews At the recent FPAS Global Conference and Dinner 2023 on 16th October 2023, we had the most wonderful opportunity to meet up with our fellow CFP® delegates across the world.

Eliss Chen (EC), CFP® spoke to the event’s panel speakers on the sidelines to get more insights from our esteemed speakers on some of the trends financial planners need to be aware of.

So, you compare between what’s happening in Singapore versus what’s happening in Hong Kong versus what’s happening in South Africa.

is coming together and run best practice sharing sessions with the network and with Affiliates groups like FPAS about specific topics that they can then bring back and share with their CFP® Community.

Then you can see if there are consistencies along that and in most cases, there is.

Guest interviewees: Mr. Dante De Gori, CEO, FPSB Ltd. (DT) Mr. Norio Saido, COO, JAFP, Japan (NS) EC: Welcome to Singapore!

EC: Asia is a very diverse region with very different languages, cultures, level of wealth and of course financial planning expertise. Would there be any upcoming initiatives from FPSB to help create more synergy and learning within the region so that the regions can learn from each other as well as from United States and so forth?

DT: Yes, that’s one of the things that FPSB, the Financial Planning Standards Board tries to do through our standards and education competency profiling. FPSB is trying to have consistency of education training and experience across many different nations around the world. Every territory has some unique differences in terms of local laws, pension rules, tax, etc. that we need to account for.

But if you think about the fundamental elements of the financial planning process, there should be a very high level of consistency across different financial planners in different territories, including within Asia. That’s an area for us to continue to evolve and trying to improve that consistency. The other part of the work that we’ve been doing around that is to do more research.

This research includes understanding and asking questions on how do financial planners practice, what are the areas of practice that they’re doing now, what are the future trends and changes, what is it that consumers are demanding of them.

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There are always nuances but, in most cases, there are consistencies and then we translate that into standard competency profiling education courses and professional development, in order to try and ensure that all financial planners get access to the same level of training.

We have nowadays online trainings. We will be seeing that FPSB will be organizing online specific topics.

EC: Would there be opportunities for the sharing to come from United States or United Kingdom?

DT: I believe one of our roles is to facilitate.

What we do know is what different territories are doing and not doing. We need to know where the gaps are. Then it is to either try and fill the gap or there may be for example territories like the United States or in Europe or even in Asia itself where they learnings or best practice that can be shared.

DT: One of the key things we do for example in the next few days while we are here in Singapore with the whole global community

There is definitely opportunity to provide training courses, whether it’s CPD or other courses that can be available for CFP® professionals across borders.

EC: What would be some of these areas?

DT: I think that’s still an area that we’re developing and growing but the reality is it will come from other territories who already do good training and you share that training with other territories.

EC: What are some of the recent topics?

DT: The topics that are coming up at a global level that people want to share are things like new innovative digital asset type products like cryptocurrency.

Another area that has an impact across all countries are ethics and psychology of financial planning. These are topics where all territory is saying we need support and help in terms of ongoing education and professional development for our people.

This is a part where I think financial planners will see the value in having a CFP®.

Financial Planning Magazine | December Issue

EC: What are some of the challenges?

DT: CFP® certification is 50 years old from the US. And outside of the US, it is much younger.

For example, Singapore is celebrating 25 years of CFP® certification. Whichever number you look at, financial planning is a young profession. It’s still in its infancy when you compare it to medicine, law and accounting. I think it’s still an emerging profession.

Financial planning as a profession is at a point where we are trying to fast track to be equal to law, medicine and accountancy in respect to recognition and understanding but they’re more than a few hundred years in front of us!

we’re talking about things like supporting someone’s lifestyle, achieving goals like going on holiday and sending my child to school. It is not about whether I am going to beat the market or not.

That’s not what financial planners actually do and in fact they actually don’t invest your money. There are fund managers that invest your money. So that’s a long way from education promotion and awareness is still very low. It is low because we don’t have the financial means compared to other professions because we have 213,000 CFP® professionals in the world. while there are over a million Chartered Accountants and CPAs around the world.

EC: Thank you, Mr Dante for your insights!

EC: What are some of the actions we can take?

DT: We need to do more to educate the public.

There’s an onus on FPSB and our affiliates around the world to do more in the way of awareness and education to the public.

EC: Mr Norio-san, Japan is fast ahead in the aging population than Singapore.

Singapore also has a fast-aging population problem. What the general lessons that Singapore financial advisors should learn about this?

what kind of lifestyle they would like to live, and they together think of the life plan with the client.

They will start planning for their financials and advise them what to do in preparation.

EC: Can you tell us more about this?

NS: There is a tool that is commonly used. It’s called “Ending Note”. It’s different from the Will. It doesn’t serve as a Will but it’s the wish of the departing person. The person who is preparing for his or her departure will be writing down their wishes and the messages for their remaining loved ones.

NS: What binds you legally will be the Will so this is different from the Will. The “Ending Note” doesn’t have a particular format but it’s a tool to enable the person to deliver the message of what they are thinking, what they are feeling. So, after they have passed on, it will show how they would want things to be done. So, they will write that down. It includes also by when should the person be doing what, so that is where the financial planner can come in to help them to plan the remaining life.

EC: How about in financial planning? Is there any specialization?

NS: There is nothing specialized for the elderly, but you know the current elderly were once young so when they are still young, they need to be able to plan for their older age.

They need to be able to prepare for things like financial literacy and be knowledgeable.

EC: Is there a certain skill set that financial advisors need to acquire to deal with the older population? Their needs are different, for example a lifelong income.

DT: Our research study shows that there is awareness of financial planning. If you ask the consumers have they heard of financial planning, they will say yes but then if you ask what does that mean, there is a variation of responses. Most people will think financial planning is you will invest my money.

Speaking from my experience in Australia, the number one thinking is that you’re almost like a stockbroker. The financial planner will invest my money and that’s all you do.

Financial planning is where we talk about the holistic approach of financial planning and

NS: Japan also knew that it was going to be an aging population before it was going to happen. So, I think it’s very important to be well prepared before it actually happens and Japan is also not on point to deal with the aging population so it’s important to get ready before it happens.

NS: There are some planners who are specialized in the seniors and the elderly. We have a word which literally means “Planning for your departure” so the planner will help the client to be able to visualize what they want to do when they are old, when they age,

NS: If I have one piece of advice for financial planners dealing with the elderly, it would be not doing a financial service but more like a supportive service. It includes giving them a listening ear and giving them empathy and trying to hear their needs. That’s more important than giving them a financial service and I believe that this is not just the case of Japan, but it also should be around these different countries.

EC: Thank you, Norio-san for your sharing!!

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Financial Planning Magazine | December Issue

Firm Visits DBS

AIA

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FPAS would like to thank DBS, AIA Singapore and PhillipCapital for hosting the firms visit for our delegates from the Financial Planning Standards Boards network, to showcase and to learn about the financial planning landscape in Singapore.

Financial Planning Magazine | December Issue

Phillip Capital

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Financial Planning Magazine | December Issue

FPSB Global Meeting in Singapore - Farewell Dinner 19 Oct 2023 | ONE 15 Marina Sentosa Cove FPAS is honoured to host the first in-person FPSB global meeting in Singapore after the pandemic. With more than 70 delegates from 24 countries across FPSB’s global network of organizations participating, it’s been exciting to gather and discuss how we can strengthen, promote, and propel the financial planning profession with CFP certification as the global symbol of excellence in financial planning.

FPAS is also pleased to host the farewell dinner for these delegates. We have infused cultural activities such as lion dance performance, mooncake workshop and a taste of the King of Fruits – Durian!, to enable them to experience the richness of Singapore’s culture and heritage.

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Financial Planning Magazine | December Issue

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Financial Planning Magazine | December Issue

25 Years of Global Excellence in Financial Planning

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