A friendly online enquiry form ask for only 3 essential information
a) Your name
b) Your e-mail or contact number
c) A text box for you to type your enquiry
Most large organisations have an enquiry form that ask for non-essential information (many of which are mandatory) and ask the customer to select the type of enquiry from a long drop down list. They seem to enjoy making life difficult for their customers.
Of course, they want to collect customer data, but do they have to alienate their customers?
Thursday, March 20, 2008
Risk based capital
A financial institution, such as a bank or insurance company, is required by the Monetary Authority of Singapore to have a share capital (i.e. risk-based capital) that reflects its risk profile. The risk profile comes from its invested assets and from its contractual liabilities to its customers.
A financial institition that takes more risk (i.e. asset and liability risk) is required to have more share capital. One that takes less risk is required to have lower share capital.
If the financial instition has more capital, it may appear to be "safer" and "better" for their customers. But this is only one side of the story.
A financial institution with more share capital has to make more profits to satisfy their shareholders. The expected return for shareholder is usually 10% to 15% on their investments. The higher profits is usually taken away from their customers, through excessive charges and other devices to "cream off" the customer.
It may be better for customers to transact with a financial institution that take lower risks and require lower share capital from the shareholders.
When you invest in a low cost, diversified investment fund, you are taking the investment risk. The fund manager does not take the risk, and does not require to have a high capital to provide the guarantee. They are able to give you a higher return.
Read this FAQ on how you can reduce your own risk, and still enjoy the high return:
http://www.tankinlian.com/faq/savings.html
A financial institition that takes more risk (i.e. asset and liability risk) is required to have more share capital. One that takes less risk is required to have lower share capital.
If the financial instition has more capital, it may appear to be "safer" and "better" for their customers. But this is only one side of the story.
A financial institution with more share capital has to make more profits to satisfy their shareholders. The expected return for shareholder is usually 10% to 15% on their investments. The higher profits is usually taken away from their customers, through excessive charges and other devices to "cream off" the customer.
It may be better for customers to transact with a financial institution that take lower risks and require lower share capital from the shareholders.
When you invest in a low cost, diversified investment fund, you are taking the investment risk. The fund manager does not take the risk, and does not require to have a high capital to provide the guarantee. They are able to give you a higher return.
Read this FAQ on how you can reduce your own risk, and still enjoy the high return:
http://www.tankinlian.com/faq/savings.html
Risk and return
Is it better to invest in higher risk assets (e.g. equities) or lower risk assets (e.g. bonds)?
Here is my answer:
a) If you wish to get a higher return, you should invest in equity
b) Over the long term, equity gives an annual return of 2% to 4% higher than bonds
You can reduce your risk of investing in equity as follows:
a) Invest in a diversified fund
b) The fund should be invested in only shares of blue chip companies, i.e. the largest companies in the market
c) Choose a low cost fund (i.e. expense ratio less than 1% per annum)
d) Invest for the long term (i.e. 10 years or more), so that you can average out the good and bad years.
Be ready to take "diversified" risk and get a better return. There is no need to invest in highly speculative asssets, such as emerging markets or highly priced commodities, to get a higher return.
Here is my answer:
a) If you wish to get a higher return, you should invest in equity
b) Over the long term, equity gives an annual return of 2% to 4% higher than bonds
You can reduce your risk of investing in equity as follows:
a) Invest in a diversified fund
b) The fund should be invested in only shares of blue chip companies, i.e. the largest companies in the market
c) Choose a low cost fund (i.e. expense ratio less than 1% per annum)
d) Invest for the long term (i.e. 10 years or more), so that you can average out the good and bad years.
Be ready to take "diversified" risk and get a better return. There is no need to invest in highly speculative asssets, such as emerging markets or highly priced commodities, to get a higher return.
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