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5 services you didn't know (but should expect) from your Financial Consultant

Updated: Feb 9, 2023

Well specifically from me, at least.

When people say, ‘Financial Consultant’, ‘Wealth Manager’, ‘Relationship Manager’, ‘Financial Adviser’, ‘Financial Planner’ – it’s basically just life insurance, isn’t it?

But the next time someone drops you a message asking you to catch up - they might just be able to offer you a lot more based on their reach and experience.

Who knows, you may end up talking about a lot more than a future health scare.

Here's 5 things you may not have thought your Financial Consultant could help you with.

1) CPF

Financial Consultants can help you invest the money in your Ordinary Account and Special Account.

Unlike individual stocks which have a 35% cap, this Financial Consultant can invest all your funds excluding the first $20,000 of your OA and $40,000 of SA.

Additionally, you have over 60 diversified fund options - with almost all of them outperforming the paltry 2.5% OA returns net of fees, and with over a third of them outperforming the STI. You can expect this since fees have also been dropping.

If you invest even $10,000 of OA money as a 30-year-old, it could be comfortably over $54,000 [7%] instead of $18,500 by the time you hit 55.

The excess money of FRS, if you know – is available for withdrawal as cold, hard cash.

That’s a lot of spending power at 55.

Since you likely have a ridiculously long-time horizon of at least double-digit years, you may as well invest money aggressively.

2) Supplementary Retirement Scheme

Most Financial Consultants are familiar with the Supplementary Retirement Scheme (SRS), even though it’s rarely considered unless you are in a decently high tax bracket of about 6 figures a year.

You can deposit up to $15,300 [Singaporeans/PR] in this account every year in order to save more for your retirement as well as enjoy tax relief.

A $100,000 income earner would have to shell out $5650 in taxes. This drops to $3925 after a $15,000 SRS deposit, which is $1725 that he or she gets to keep in cash.

Additionally, a Financial Consultant can help you invest any money that you have from a choice range of over a hundred funds, as well as a variety of private annuities that pay out guaranteed income – all without being taxed for it.

Additionally, any money withdrawn from the account is tax deferred as well.

With the help of your Financial Consultant, someone who starts this process at age 50 and does it until 62 should be able to realize a total of over $300,000 quite comfortably with a capital of just $180,000, while saving over $20,000 in taxes.

Of course, you can opt to do this at a younger age if appropriate for your needs.

3) Mortgage

Your property is arguably/usually the biggest asset that you will ever have, typically with at least 2 decades of interest payments and a huge down payment that accumulates into a 6-figure value.

Both the accumulation of that figure as well as the option of utilizing it in the future should be careful considered, and a Financial Consultant is typically in a good position to help you with this. I've spoken about this in far more detail here.

FA branches often work with multiple brokers across all the banks to secure the most advantageous interest rates for each individual preference, be it fixed or floating.

For example, a $600,000 CPF loan across 25 years would result in monthly payments of $2720, for a total of $216,600 in interest.

Even after accounting for refinancing fees, a fixed bank loan that is continually refinanced as high as 2% will still save you well over $40,000.

With their expertise in life insurance, Financial Consultants should also be adept at getting you an effective interest rate for a second mortgage, which you can utilize for legacy planning or simply taking advantage of dividend interest.

4) General Insurance

When people think Financial Consultants, they fairly assume that we only sell life insurance. However, they also offer the full range of protection for your every need.

Home Insurance: Renovating a property? Damage, aesthetic or otherwise, isn’t all that uncommon since it’s such an extensive, hacking process that's proven to cost a lot of money often. Your FA can help take you through a simple to comprehensive package to get reimbursement on any unfortunate incidents that occur.

Motor Insurance: Buying a vehicle? Your FA can help you source out the best value-for-money packages, and of course be responsible for helping you with any future claims.

Travel Insurance: For the especially young and especially old generation who are bigger fans of travelling, comprehensive traveling plans may be customized and recommended according to your preference.

This includes a profile plan [e.g. older with health problems, or a traveling student], more affordable yearly packages, a wider variety of compensation benefits and based on your visiting preferences.

5) Business Insurance

If you’re running a small business or the manager for a business that requires this insight, you may eventually need to consider business insurance for a variety of reasons: anything from complying with regulations or incentives to retain talent.

Financial Consultants typically offer at least one company Group Term Insurance, that allows you to complement your personal insurance with largely or fully subsidized top ups, with anything ranging from outpatient [e.g. clinics for taking MC] to your life insurance [death/CI/] or your medical needs.

Additionally, they may also help you with the specific business end, like Liability insurance [in the event you need to protect yourself from legal issues] or something commercial [like protecting your property from Fire/Flooding] to make sure that your business stays protected in the event of the unexpected.

Closing thoughts

The end of the year is an especially good time to see your Financial Consultant to prepare for the next year, especially if there’s a big life stage coming up ahead such as marriage or purchasing your home.

Even if your current consultant does not offer or know some of these things, they should be able to help you with greater understanding of the processes since it is their job.

If you’re in the camp that your Financial Consultant gets paid too much or something, by all means – as you can see above, there’s plenty of ways to put us to work.

Not all insurance is expensive, and the financial value of advice provided on these matters is high.

Happy Holidays.

Disclaimer: Financial planning is an individual; customized experience where different solutions may be more appropriate for different needs.

Each plan may come with a specific set of terms and conditions.

Money Maverick

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