Staunch believer in insurance

Father's death benefit helped provide for financial adviser and his siblings when they were young.

Tue, Mar 30, 2010
The Straits Times

By Lorna Tan

His father, a doctor, died of a stroke when he was only a toddler. He was the youngest of four children. His mother worked as a private nurse at night to bring them up.

But more importantly, his father had bought an endowment plan and his mother received $20,000 upon his death. With the money, she bought a bungalow. That was in 1958. The family lived in a terrace house which was bought three years later and rented out the bungalow. The rental income saw the children through their education and daily needs.

It is no surprise that, having experienced first-hand the benefits of insurance protection, Mr Benedict Tan ended up in the insurance industry.

However, Mr Tan, now 58 and a business director at financial advisory firm PromiseLand Independent, initially tried to be a pilot after his national service. He did not finish the training course.

He also put in a five-year stint at a health firm as a medical representative.

He joined Prudential as an agent in 1981. He moved up to agency management and became a trainer at the British company till 1990. He worked at a number of insurance firms, accumulating his experience before venturing into the financial advisory sector.

In 2004, he obtained his MBA in financial services from the University of Vancouver via distance learning. He joined Pro-miseLand in 2008.

He is married to a housewife and they have a daughter, Denise, 30, and a one-month-old grandson, Jaden Seow.

Q: Are you a spender or saver?

Sad to say, I have always been a spender. I was never a saver or investor in my early years. I didn't have the discipline for a savings target every month. I would save, and then spend.

I started taking an interest in saving only because I needed to invest, so that I could learn how to invest, and help and teach people to do so.

Q: How much do you charge to your credit cards every month?

I charge about $700 monthly and my bill is fully paid up every month. I withdraw between $200 and $300 every week from the ATM, which I split with my wife.

Q: What financial planning have you done for yourself?

I have about $30,000 in a stock portfolio, of which $20,000 is in OCBC shares and the rest in SingPost and SingTel. I monitor the share market once a week.

I invest another $500,000 in a portfolio that is made up of 80 per cent in emerging markets like Eastern Europe, Brazil, China, Russia, India, South-east Asia and Latin America. The remaining 20 per cent is invested in global funds and bonds.

I'm a high-risk investor but I'm more conservative when it comes to my clients. My target return is 30 per cent per annum. The last two years have been tough and I lost the profits earned. I balanced my portfolio regularly and managed to preserve my capital.

When I was in my early 30s, I owned a term plan with a sum assured of more than $1 million and personal accident plans with the same sum assured. It covered me for 20 years till my daughter turned 23. The insurance cover has since expired.

Q: Moneywise, what were your growing-up years like?

My father was a medical doctor and lecturer at King Edward VII College of Medicine. He died when I was only 17 months old.

I had a strong mother who worked at night and played father and mother by day to bring up four children.

My father had an endowment plan and my mother received $20,000 from it. She bought a bungalow in Bukit Timah with the money in 1958. In 1961, with her savings, she bought a corner terrace house in Opera Estate for $18,000. I was eight then.

We rented out the bungalow and the rental income provided for our education and everything we needed. So I learnt the importance of insurance. My mother also taught us to know the most important person in the world, Jesus. I now attend the New Creation Church.

Q: How did you get interested in investing?

I got interested in investment in 1994 when I had extra cash to invest. On the advice of my friends, I bought into the DBS Shenton Asia Pacific Fund that year. I lost $10,000 as the market plummeted.

To help an ex-staff of mine who became an AIA agent, I invested another $5,000 in the AIG Acorns of Asia fund in 1998. Again, I lost my capital when I liquidated the fund in 2004.

To upgrade my knowledge, I did my MBA in financial services in 2004 and became a chartered financial practitioner.

I spent three months paper-trading. And I monitored the stock exchange and unit trusts daily for at least six months before I started investing and selling.

I started with $5,000 each for myself, my wife and my daughter. Today, our total personal portfolio is about $500,000 with accumulative top-ups.

Q: What property do you own?

In 1985, I bought a five-room HDB flat in Bedok Reservoir for $80,000. I sold it for $250,000 in 1994.

I then bought a ground-floor private apartment in the East Coast for $460,000. It is about 1,000 sq ft and has three bedrooms. It is now worth $700,000.

Q: What's the most extravagant thing you have bought?

The private apartment in the East Coast.

Q: What's your retirement plan?

To be a financial adviser representative with 200 clients and managing $100 million worth of assets. I would like to continue helping my clients and friends to make money as well as mentoring young advisers.

I consider myself financially independent now. My wife and I spend about $3,000 to $4,000 a month.

Q: Home is now...

My home in the East Coast.

Q: I drive...

A Toyota Altis in metallic silver.

Q: What has been your worst investment to date?

Working for the wrong firms and bosses. I have worked with CEOs who were questionable, unqualified and unethical. I worked hard but with negative outcomes. For instance, I joined a securities firm in 2005. The boss wanted to start a financial advisory arm and appointed his secretary to set up and head the unit. She had no knowledge, prerequisite qualifications or skills. It was a joke.

Q: And your best investment?

It was leaving the pharmaceutical firm in 1981 to join this industry. My stints in the various insurance firms including Prudential, John Hancock, Wing On Life, AXA Life, and GE Life have provided me a wealth of knowledge. Education and hands-on experience are my best investments.

This article was first published in The Straits Times.