It's year end and I am doing my year end reflections as a financial consultant. 2021 has been a rollercoaster year. We got 2 new Covid variants in the form of Delta and Omicron. As a result, we experienced a lot of regulatory changes in terms of group meet ups and vaccinations. Upon reflecting on the client interactions for the year, I came up with 4 financial takeaways from each quarter which I would like to share with everyone.

1. Most people in their 30s have medical conditions to declare & many expressed surprise that insurers might not cover them in full

Careshield Life was introduced in October 2020 as a compulsory coverage for anyone age 30 and above. I've met a number of clients in 2021 to help them with their Careshield Life enhancement. In the course of doing so, I've discovered many health findings among people in their 30s.

They range from minor issues like mild cholesterol to sports injuries as well as removal of benign growths. Some of these conditions lead to exclusions, loading, postponement of coverage and most of the time, clients express surprise because in their purview they are healed and the issue was diagnosed years ago.

If you need an explanation why insurers behave this way, you can refer to this article to read in detail.

The main takeaway is to get your insurance coverage done as early as possible!

I've a client who expressed great disappointment at being excluded for critical illness coverage for her medical condition post surgery. The thing is, she didn't see the importance of such insurances till she saw her medical bills and getting spooked by a potential critical illness.

Honestly, as an advisor, it doesn't feel good to have a conversation on potential sub-standard underwriting outcomes. Above all, it doesn't make a person feel good because they have to constantly deal with the feeling of being 'rejected' each time they need to increase their coverage or get new types of insurances.

You might feel it won't happen to you or that you might go without it, but believe me, when your income increase and your purchasing power goes up, you'll start to expect money can solve the issue of getting covered.

Unfortunately, insurance is bought with health not wealth.

2. Product buying is still a predominant mindset

I've sat through multiple appointments where the clients simply expected to meet me to buy a specific product and leave. Unfortunately, I don't work this way. Financial planning is unique to every individual and cookie cutter solutions is honestly detrimental for a person's pocket.

In fact, out of the appointments I sat through with clients holding such expectations, they all came away from the first appointment without successfully buying anything. This is not because they didn't end up as clients but because they found out what they wanted was not what they needed. As a result of this process, they met me over 2 to 3 appointments to resolve their actual needs and gave very positive testimonials after the sessions.

The reason I'm sharing this is because I want to point out that product buying as a mindset can be damaging. Doing so is akin to going to a doctor and telling them what prescriptions you need without a good understanding of medicine or the human anatomy. It's possible you end up with a short term solution that temporary elevates your problem only for it to worsen months later. Then what may be easily resolved with the right medication might end up requiring a surgery.

To read some case studies, refer to this article: Don't expect to be sold a solution. Look for a consultative approach instead!

3. High income earners spend the bulk of their time choosing the steward who manage their money rather than focusing on the details of the products

An interesting observation among the high income earning clients is their focus on who is managing their money more than what is their money being placed into. This is not to say that they are totally clueless about which instruments are recommended but they spend less time digging really deep into the fine print.

On the other hand, they spend more time evaluating who is managing their money - in my case, evaluating me. They ask questions in terms of what are my planning philosophies, raise questions on their concerns and see what responses I give them, how I run my business and other general topics. Very often, they also have basic knowledge of finance because they read widely.

I find such an approach interesting because it is probably how someone in leadership handles their corporate work especially if they have staff to do the detailed work for them. For instance, someone leading a marketing firm may not understand the specifics in how to use photoshop or video applications but they understand the overall competency of their team members such that they know their desired results will be achieved.

On the other hand, mass market retail consumers tend to focus a lot on the product fine print and features or price comparisons, less on who is recommending the solutions to them. A lot of times, there's a strong belief that the financial advisors/bankers may change and thus there's little need to place so much emphasis on the person executing the plans for them. However, this approach may result in getting the wrong solutions as the role of the financial consultant becomes transactional while the consumer tries to wear the hat of a consultant.

I felt this behavioural observation is worth sharing particularly if both groups have the same objective - mainly finding someone to outsource financial matters to in order to free up their time for activities they like to do. Perhaps, you will get more bang for your buck if you manage your money as though you are leading a team or a company.

4. Don't give up on your ideal retirement without exploring your options

Retirement planning involves the largest sum of resources. Ultimately, you need to set aside enough funds so that it can generate sufficient income or wealth to ensure a person can survive without working for 20 years minimum (age 65 - 85).

Very often, when we see the inflated amount we need to work towards we get intimidated and convince ourselves we either won't spend so much or will downgrade our lifestyles.

From my experience, this is a common reaction most people have. Depending on when you start retirement planning and your resources available, your ideal retirement might actually be achievable. Very often, most of my clients need not compromise on their needed requirement amount if they start early enough. For those who start late, those who are sitting on an unused cash pile accumulated over the years can also achieve their ideal retirement without compromise.

Will resources be substantial? Yes, however it's usually much lesser than if one tries to achieve the goal by saving on their own. In the first place, we shouldn't be holding on to a huge cash pile and let the money erode its purchasing power through inflation. Thus, investing the resources shouldn't be viewed negatively. As long as our ideal retirement outcome can be achieved, it should be worth celebrating.

If you have ready resources to deploy for retirement planning and you feel you need to compromise, a logical suggestion would be to seek a second opinion. In today's market, there is a wide spectrum of solutions to meet retirement goals. Ultimately, financial instruments are merely tools. The user of the tools would determine whether the tools are effective. Just like if we are ill and a doctor tells us our illness is beyond cure, a sensible thing to do would be to seek another specialist advice just in case there's a way out. After all, there's nothing to lose.

Summary

In short, my 4 finance takeaways of 2021 are:

• Get insured early because small seemingly mild medical conditions might also impact your future insurance purchases.

• Focus less on products and more on solutions, it's better to seek advice on how to solve a need rather than seek a consultant to buy a product.

• If you are looking for someone to manage your financial matters because you have no interest or time, spend time to find the right steward of your money instead of products to your needs.

• Don't be intimidated by your ideal retirement sum needed, explore your options before compromising. Your resources might be able to achieve it.

After reading this article, you might be keen to have a discussion to get a policy review or get some advice. You can reach me by dropping me a message.

Be sure to share the article if you feel this information is helpful. You will enable a lot more people to learn more about financial planning.

About Janice

I specialize in portfolio optimization (ensuring you get maximum value for every dollar you put in) and retirement planning. I am also building a team of financial advisors who are committed to help responsible individuals attain their goals without misallocating their resources. Do reach out if you would like to explore a career with me.

Clients look for me primarily to outsource their retirement planning needs so that they can focus on other aspects of life that interests them. Many of whom are very good in earning their incomes in their respective professions and wish to ensure their monies continue to work harder while they focus on what they are good at. Refer to client testimonials here.

I've helped many clients who are referred to me reduce the costs they are paying for their insurance or help provide solutions when they deem they are stuck with huge commitments bought when they were younger but unsuitable for their present life stages. You can reach me at 94313076 or my social media accounts on Facebook and Instagram.

Disclaimer: The content created are based on my personal opinions and may not be representative to everyone or any organisation. If you have any doubts or queries pertaining to insurance or investment, please seek professional advice from a trusted adviser in an official setting. You may also reach out to me if you do not have a present adviser using the message box under 'Let's Talk'.