This will be a very short article because I've a backlog of CI applications to clear. I want to touch on the topic of DIY after some interactions with some people who try to do their own research and prefer to seek advice from the open market (sometimes non licensed advisors which means they can say anything they like with no liability whether it's factual or not). Personally, I think the market is big enough that we shouldn't spend too much time trying to change opinions. There's just two things I wish to highlight, even if you DIY, you should know this.
Most insurers' plans appear same same but different
Given the sudden influx of interest in critical illness plans, I'd just use multi-pay plans as an example. Every multi-pay plan by different insurers is structured differently. If you read through most brochures, the prominent stuff highlighted includes the maximum payout you can get, usually in huge percentages and number of illnesses covered. However, most people may overlook how easy it is to get each stage of the payout and how the insurer interprets the stages of illness and pay-outs. Sometimes, the product summary itself may be open to interpretation from the layperson and as advisors, we clarify with the business development managers in writing sometimes. This logic actually applies to most financial solutions, not only multi-pay plans.
Usually when you DIY, you may not even look through all the insurers and may think you settled on a plan you are happy with. However, I'm not sure if this justifies the basis to DIY in the first place. Usually DIY is meant to get a better deal than what the 'professionals' can give you. If you could have gotten something more comprehensive or value for money and didn't because of blindspots, it'll not be the wisest way to optimize your portfolio. Usually hindsight is 20/20. In most cases, especially for protection plans, it's when you claim that you get to test the effectiveness of your planning. On the other hand, if you are one of the rare ones who are really good at DIY, please continue to do so.
Your investment return should be better if you are doing it yourself
I've clients who invest on their own and also have me manage their money. I assure you, if they outperform the investments with me by a tremendous amount, they'll probably fire me regardless of the top notch service they get. It's just not worth the fees. Most of the time though, they under-perform or get an equal return. This then is not an efficient use of their time, that's why their main portfolios are still with me.
To me, managing money is very pragmatic. We aren't always young and there's opportunity cost - mainly in the number of years we can compound our returns. If you are doing a certain return but could have gotten more elsewhere, you basically would have wasted x years till you realise this. Of course, I'm not saying everyone under-performs their advisor's recommendations. However, a good number of people still do, that's why the vast majority still worry about money today.
Summary
All I'm saying is there's a lot of stigma in this industry. This is probably the only industry where professional licenses are required to practice but everyone thinks they can seek advice from almost anyone and believe that the quality of advice is the same. I acknowledge that the general impression of this industry can be improved. Hence, my sole advice is to take a pragmatic approach.
If you can do better, don't hire anyone. You should however, be dead certain this is the truth and not some bias perspective. If not, the consequence of this judgement is also going to be borne by you. The same applies when it comes to taking advice from people with no skin in the game or responsibility towards your portfolio when something happens.
To find a good advisor, you can always seek out recommendations from friends (if none of your social network has met a good advisor, you really suay or haven't tried hard enough asking) or review online content like how you source for good restaurants. In this internet age, there's really little excuse that one cannot find a competent advisor.
If you happen to read this and have no wish to DIY and want a guided process, please speak to a trusted advisor. You can drop me a message if you would like me to help you with it.
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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'.
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