Financial Planning


So I have been in finance for about 17 years and find myself redundant for the second time in a year.

During the last 9 years in Asia I have found the quality of financial planning available in English to be appalling, and am thinking about starting my own business in this line.

My thinking is that there are plenty of people in Taiwan in particular who are supposedly saving a little money as well as having some fun, but wonder whether this audience would be too young/immature for a service which would help them maximise their potential savings while they are here?

I know there are also plenty of entrepreneurial Forumosans, who have done well. Do you think this audience would benefit from some solid financial advice?

I am not talking about flogging investment linked plans with high penalties (except where this is what is wanted/needed) but rather taking someone through the need for different products, and the cross section of savings and protection that should be in place for peace of mind. This might include property, mutual funds, life insurance, medical insurance, permanent health and/or critical illness type cover, as well as pension planning for the older group.

I would be very interested to hear views from Forumosans not just on whether they would use such a service, but whether they think others would do and what the draw backs would be.

I am also interested to hear horror stories. I know that I won't get rich if I do this properly and that the successful guys always rip people off. If you have had a bad experience then let us all know about it - forewarned is forearmed as they say.


Hmmm....very interesting.

My 0.02 is that there are a lot of savers in Taiwan that get a lot of crap advice, (mabe not just Taiwan). These savers also have very unrealistic expectations of risk/reward, (not that we haven't seen that elsewhere either), and don't necessarily want to hear that they can't earn double-digit risk free returns year after year.

It's possible that there is a niche market for people who want sound advice....but that would be against human nature.


Interesting that you assume it would just be investment advice.

I see it more as risk management.

What happens if you can't go to work tomorrow?
What happens if you were seriously hospitalised tomorrow?
What happens if the stock market tanks?
What happens when you go home and the Taiwan dollar is worth nada?
What would you do if you found out you had cancer?
How do you save money? Do you dip into it for emergencies? What constitutes an emergency?
What plans do you have for retirement? How much money do you think you need?

This is all stuff that people don't really want to talk about but when you get it all in place you feel so good about it being there.....well I do but maybe i am sad?


Just a knee-jerk assumption when I heard, "Financial Planning".

What you're proposing is much more interesting and valuable; but I would reckon that people:

1) Wouldn't understand what you're talking about
2) Would keep wanting to talk about unrealistic rates of returns on their investments.

"Why keep it in this boring insurance plan when I can invest it in Acme Corp. and get XX%? Then if I get sick I can sell it and get more money." :blah:

But, there just might be some people who have gotten some religion given the recent unpleasantness....


I did a plan for a friend of a friend this week.

He is 52 and has a 2 year old son.
He wanted life insurance for himself so that if he dies the wife and baby are looked after, and a savings plan for the little one's education at age 18.

Typical Agent in Singapore where he lives suggested a whole of life plan for the insurance, and an insurance education plan, which actually insured the child's life and had a term of 20 years (i.e. would mature after the kid was 22).

This is fairly typical advice and is based on maximum commissions. Two long term insurance plans = a very expensive way of doing it and lots of commission for the agent.

My suggestion
10 year term insurance which will take him to 62 with a sum assured equal to what he suggested in his email
20 year savings plan using mutual funds or a simple 101% type life plan
This gives him a chance to build some savings in the first 10 years safe in the knowledge that everything is taken care of
After 10 years he can either take another 10 year term at a lower sum assured (keeping the cost down) or accept that if he dies Junior will be short of some of his education funding - clearly 10 years from now his health may be quite different
Realistically he is not going to work until he is 72 - so how would he fund a 20 year plan?
I also gave options for how much he should save over 10, 15 or 20 year terms to reach his target amount
I suggested he take a criticall illness, or permanent health plan in case he cannot work at some point during this plan
I also suggested he look at his own retirement needs and check whether his medical cover was sufficient for the whole family

Clearly this is far more complex, requires more work and would pay me less than the Singapore agent was angling for.

On the other hand I think the guy in question would trust me more, and recommend me to his friends in future. Plus i know he couldn't afford the 2 plans that were recommended by the agent.


I could do with some financial advice, for sure. I have absolutely no idea how I'm going to survive after retirement.


You have an interesting idea and I thought of some things you may want to think about.

First is that the internet is full of websites that give out information about savings, investing, retirement and everything else for free. That shouldn't worry you though because a lot of it is redundant and or just wrong. Your strength should be your years of experience. As your example shows, the personal approach you developed with the client, even if it meant less money to you, will pay off more in the long term. People want someone they can trust implicitly when it comes to finances and retirement. If you can fill that role, and save them money, you should have plenty of clients.

Second is what is your demographic going to be? Your OP states that English materials on financial planning are are appalling so I'll wager a guess you'll be focusing only on people from English speaking countries like the US, Canada, New Zealand, Australia, the UK, South Africa, HK and any others that I may have left out. The issue would be that financial regulations from each country will differ so you may have to be a jack of all trades. A financial plan that would work for Canada may not work in the US or Australia. I don't know the regulations but I'll venture an educated guess that they differ significantly, or not so significantly, across the previously mentioned countries.

Third is the age of your clients. I would imagine that a majority of the clients who will be looking for you or recommended to you will be older, in their 30's, 40's and 50's. That client demographic will be looking for term life insurance while a 20-something won't be. I wouldn't immediately write off the recent college grad crowd though. You could still provide them valuable advice on how to reduce debt, fund their retirement and plan for the future. I would say you can try and tailor an approach for that age cohort and see how it goes. If it's too much trouble then stop taking younger clients unless they come well recommended.



Let me add another question to your list.

What happens if you don't retire at 65, but instead remain in productively fair health and keep working for another 20 years after that? (The proviso being that you may need to pay for some fairly expensive medical procedures to attain that.)

More and more people are starting to talk seriously about stuff that the average person regards as fantasy, such as tissue regeneration and the possibility of mitigating (or even reversing) the effects of ageing. Even if you don't take this seriously, the idea of dying by age 70 no longer seems unavoidable. Most of us knoow people who have remained active and productive long after the time when conventional wisdom - and conventional financial planning - says they should be dead. Take a loook at this TED video for a fairly recent overview of what is happening right now in labs; new organs, cures for incurable conditions, and even limb regeneration.

This doesn't mean we can stop planning for the future. It means that the future may be a lot longer, more complex, and maybe more expensive than we realise. It probably means we can also look forward to working for a lot longer than we currently envision.

Getting more on-topic, how do you, Edgar Allen, make money out of this?


Given my past experience with a so-called "financial advisor" of a firm targetting expats and advisor's working at banks I will avoid anyone that takes a commission from the products they recommend because most of them become sales people that work for their own interest as opposed to advisors that work for a fixed amount (dunno the correct term) and have nothing to gain from selling a more expensive product.
Such conditions may however make it difficult to attract potential clients, say you charge e.g. USD100 for a session but the person has only USD1500 to invest then the fee is too high, relatively at least. However such a person may not be part of your target clientele anyway.

Assuming you work for an hourly rate or similar perhaps it's a good idea to offer the first discussion for free but keeping it on a very general level, i.e. just getting to know the clients requirements / expectations and his financial situation, explaining what you can offer (but without recommending any specific products) and then see if the client is interested in future sessions, for which he will have to pay. Should it be someone that has unrealistic expecations like constant double-digit returns each year you can then also choose to reject any further meetings and not waste anyone's time and money.


Certainly a service I need, but like Rascal I've come across way to many former FILTH airport construction labourers now in suits spewing out financial advice to the unwary here in HK. I certainly wouldn't put you in the spiv bracket, Edgar Allen, but that's who have discredited a very creditable service here.

We should hook up for a beer sometime.



I could use the services of a good, unencumbered financial planning expert. I'd come to the conclusion long ago though that no such person exists.


No offense to the OP, but isn't the present global economic crisis proof of that? From Goldman Sachs to Motley Fool, from Bernie Madoff to Warren Buffett, what formerly reputable financial expert still has any credibility intact?


Guys thanks - there is some great feedback here, both positive and negative. I forgot may password and was away hence my tardiness in responding

In terms of how I would get paid - initial thoughts are that I would take the commissions but am happy to disclose what they would be. Fixed fee services are not well subscribed and there is a fair amount of work involved to do this properly. First meeting free becomes a given as no purchase, no fee.

With regard to products, I would stress again that this is not about get rich quick investment schemes. I am happy to do debt counselling with those that need it - and there is no money in that for me.

I have been lucky to have an excellent financial advisor over the years. At one point he wouldn't let me buy another product until I had a property. He knows that I know enough to know what I want but is always willing to put a different view. This is the model that I want to replicate.

In terms of audience, yes very much English speakers - my Mandarin may never be good enough to service locals. I do have an idea to train my Chinese tutor from Taipei though, who has become a very good friend.

Loretta you make some good points which are pertinent to retirement planning and annuities as well as health cover. Don't plan to address them here but happy to have a chat sometime.

HG would love a beer, will pm you my number.


I think this is a wonderful idea. I suppose you will need a license to sell the health and insurance products. You'd have to work with one of the firms here, which one would you choose?


The problem with most financial planning, people who need it, and the people who sell it is a mismatch of needs, wants and most importantly cash.

Lets take Basic financial planning 101: If your savings acct is paying you a lower interest rate than what your credit card is charging you then keep 6 months of expenses and then use the rest to pay off your credit card. Most people also don't keep 6 months of expenses laying around in a savings acct or a money market acct like they should. Basically paying off credit cards and not carrying a month to month balance is the most productive thing most people can do with their money starting off.

The reality: Most people know they need a financial plan like most people know they should get their teeth cleaned regularly by a dentist and a yearly physical by a physician. The problem is their eyes just gloss over when you start talking about all the terms. By the time they get around to it, then it is normally too late and they don't bother to set anything up for their kids. I mean WTF, why does Mother Teresa's daughter not have a Roth IRA. My daughter gets hers this year.

Sticking point: Which country? What about taxes?

The people in financial planning: For most financial planning with a financial planner you should be able to see them once a year pay a one hour fee and be done with it. In reality most financial planners make money off of selling you things that you don't really need for a cost that is too high. They need to make money and that's how they are going to do it.

Hard facts: The stock market has been the best long term generator of capital. That doesn't mean over a 10 year period that it was. I have 31 more years of savings and investing, which is about 18 more years than the 52 year old guy who should be sitting on fat cash without a worry if he had started out at 25 when I did. Mutual funds suck, Index funds outperform the majority of them with lower fees. If you don't understand the mutual fund fee structure in 5 minutes, then don't invest in it. Life insurance is a gamble and don't buy term. I'm not a big fan of Insurance yet because I'm young. In 10 years, I will be a bigger fan of insurance.

Dealing with debt: Most people who really should have a financial planner have a lot of debt. Debt is a funny thing, because while you should take care of it, most people don't want to. Sort of like the dirty dishes in the sink that you should wash, but you can't because you have to reply to someone on forumosa. Dealing with debt in America is actually really easy, but a lot of people have this idea that it's all personal and mean, when in actuality the guy on the phone will say anything to you to get you to pay. [color=#FF0000]Also bad credit and credit collection agencies is a good thing if you have screwed up credit. Because once you pay them off, then you challenge the debt and they don't want to spend the $10 it would take to pay someone to say you did owe that money. This makes the last bad debt seem a lot older than what it really is. American Express and Visa will pay people however so don't try that with them. It only gets ugly if you settle and the company decides to play hardball about you claiming it doesn't exist on your credit report. [/color] Everything in red is shady, but is what most debt counselors really do or try to do.

In conclusion: The best time to start out is after you graduate college and get your first job. Otherwise earlier is better as far as savings. I think a lot of excess consumption would be weeded out of the system this way. Most financial planners suck as they give away the skill (financial planning) in order to sell you products that may not be in your best interest. They also probably see debt as a bad thing if they even know how to use it.

As a business: I wish you the best of luck Edgar Allen as you will need it. I'm more of an hourly fee guy in the debate as I had a friend who was a product guy and it really tore at his conscience because the best fit for the client was often the least lucrative for him. I would add a tax service and an offshore incorporating service with a Visa card for those coughAmericans*cough* that will be facing higher taxes in the future and not wanting to pay those higher taxes.


I'll have a stab at answering those in order.

I have cash savings.
I have heavy insurance too.
I have lots of gold.
I have lots of gold.
Drink more and quite my job.
An emergency is running out of toilet paper or my broadband going down.
Retirement plans set up years ago, but thinking about cashing them in for capital for investment seeing as inflation will otherwise make them worth no more than pissy tips for even a bell hop. I think I'll need only about an ounce of gold for retirement at the present rate of economic catastrophe. I should be able to buy the DOW with that in another 12 months.


I think it would be great to have someone whom I could trust, who knew something about finances/insurance in Taiwan and who was not taking kickbacks from companies.

The fluent English is a bonus, too! My Chinese vocabulary isn't up to all of the banking terminology and "small print" of a typical Taiwanese financial planner.

I'd definitely bite. May I PM you, or is this just a hypothetical consideration?


Okami does a decent job of summarizing some of the basics above (pay off credit card debt immediately, be sceptical of insurance products and definitely avoid term insurance, have an emergency cash fund, pay yourself first, start investing early and trust in stocks for the long term), but he's definitely wrong about this:

Why does my daughter have no Roth IRA? Because when she was a baby I set up a 529 College Savings Plan for her instead, which allows us to make annual contributions into a wide variety of well-known funds, totally tax free if we eventually withdraw it for college expenses and with only minor penalties if withdraw for other purposes. Specifically, our 529 plan is through the State of Nebraska, and is repeatedly praised by Kiplinger, Morningstar and others as being one of the best such programs.

So, that should be added to the list: if you're an American and have a small child, or will soon, start looking into the terrific tax advantages of 529 college savings plans, then make a committment (as we have) to make annual contributions without fail and never touch that fund except for its designated purpose. :slight_smile:


I also have 529 accounts for my children. Okami, I'm just curious, how does your (infant?) daughter qualify for a Roth IRA? Does she have earned income at that age? I'd love to create Roth IRAs for my kids, but I don't really know how I can do that without lying about their earned income, of which they currently have none.

Back on topic, I agree that there is a need for English speaking financial planners in Taiwan, but I would be inclined to shy away from anyone charging a commission on products, or from anyone charging a fixed percentage of my assets. If I had very little money saved, then the latter option wouldn't bother me so much, of course.


Okami this was a great post so excuse me reposting chunks of it.

I'm afraid I can't agree with this position, its a great theory and where most planners start out. Of course if you have sufficient money then investing while you carry debt is plain dumb but for many people there is a cyclical mindset with debt - increase the limit available or pay of a chunk of debt and they will use the remainder for "emergencies". These same people are also incapable of holding 6 months cash as there is always an "emergency" that means they have to spend it. Read David Bach's "start late finish rich" for an alternative view point - essentially its important to start the habit of saving for those who do not have it. More on this later.

This has been asked a couple of times and your post goes on to talk about US specific issues. I am not familiar with US taxes but could point you at someone who is. I believe there are issues for many Americans investing outside of the US for tax reasons.

How much would you pay your financial planner? I'm not talking about someone who flogs you a product, but someone who sits down and really works with you on what is best for you and your family? Before you answer think about how much work goes into simply finding a customer willing to spend the time to go through their finances in detail, when the service is free. Equally I agree with the fact that too many "planners" make too much money off of flogging the product with the highest commission - I know doing the job properly will not make me rich.

Term is a tool, that when used correctly serves a useful purpose. I would rather see you with term and a mutual fund than a whole life policy, or god forbid a children's education plan which insures the child's life and pays upwards of 40% in commission.
Also look at your insurance needs sooner rather than later. Premiums increase with age and you may find your health stops you passing a medical later in life. It usually won't stop you getting insured but the loading can hurt your pocket.

I used to build credit and behaviour scorecards and helped develop UK data protection legislation in this respect. I also had a fairly severe debt problem at one point from "gaming the system"; which I eventually fixed without cheating. One of the problems with debt now is the misunderstanding of the system by well meaning journalists and other commentators who seem to think that credit is a right. My view is that you teach people to cut up the cards one at a time, and pay them off whilst simultaneously starting some form of regular savings.

Absolutely agree that earlier is better, compounding is a fantastic thing.
I think most planners give away very little and simply sell you whatever they can get away with. Hopefully this will improve if people use social networking tools for information before they sign on the dotted line.
Good debt and bad debt are probably too complex to cover here, but I believe many people who think they have "good debt" in the form of mortgages are currently getting burned.

At the start I think this may be a bit beyond me, but I will look into it. I appreciate the kind wishes and the detailed post.

Thank you.