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Independence, Ethics and Competency
Having experienced both a tied agency environment as well as an Independent one, I can proclaim that the Independent distribution model is still the best for clients. As I have read in an online forum, “all good financial advisers are IFA”, which reflects my sentiments. The person who wrote this line also quickly followed up in the same sentence – ” but not all IFA are good financial advisers”.
This cannot be further away from the truth.
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Case Study on How Insurance Would Have Helped Unfortunate Man
I read in the papers about a very unfortunate case about a man who accidentally slipped and fell on a walkway wet from rainy weather, causing him to be paralysed from the neck down.
He is now suing the town council for negligence and seeking compensation for medical expenses, loss of earnings, transport costs as well as pain and suffering.
The Critical Importance of Full Disclosure
What is similar across insurance policies? This statement:
“PURSUANT TO SECTION 25(5) OF THE INSURANCE ACT (CAP. 142) YOU ARE TO DISCLOSE IN THIS APPLICATION FORM FULLY AND FAITHFULLY ALL FACTS WHICH YOU KNOW OR OUGHT TO KNOW, OTHERWISE THE INSURANCE EFFECTED MAY BE VOID.”
It is as simple as it gets – When one applies for an insurance policy, he is to make known to the insurance company all facts that he knows or ought to know. If not, the insurer is well within its legal rights to treat the policy as though it never existed.
Not so Obvious Reasons to Start Planning Sooner Rather Than Later
There are quite a few obvious and oft-repeated reasons why people should start financial planning now: insurance premiums increase when one decides to get it at an older age; health problems may set in making it more difficult to get insurance coverage; investing early allows one to enjoy the full magnitude of the compounding effect amongst other reasons.
These are actually rather minor concerns to me.
What is the absolute difference in premiums when one is 25 versus when one is 26, 27 or even 28? It is not very much actually. Delaying one’s investing by some time also do not make very significant difference. Of course, horror stories about bad things happening to even young people can be an effective way of getting people to sign on the dotted line, but to me, I think a few other factors are more pertinent.