Every Sunday night, Darren Lim will host a show called “Unnatural” on Channel 5. Every year there are more than 3,000 reports of unnatural deaths in Singapore, the show explores the various reasons behind them.
In last Sunday’s Unnatural Episode 4, it was about a woman who had fever and was prescribed a kind of antibiotic by the doctor. As her situation seemed to be getting worse and started to have rashes, she went to see the same doctor again and was prescribed a stronger doze. The rashes started to worsen but the same doctor ignored the symptoms and prescribed her another experimental antibiotic which was even stronger.
Tragically, this young lady died eventually as it turned out that she was allergic to the drugs. The doctor was not found negligent because the patient was not aware of her drug allergy.
I cannot refrain from drawing an analogy between this story and a person’s financial planning.
When you go to see a doctor, you tell the doctor that you are sick. The doctor prescribes you some medicine and you say goodbye to each other. The meeting is usually less than 5 minutes. Many times, the doctor does not even know your name and you don’t know the doctor’s either.
Note the doctor typically does not bother to check your medical history and prescribes based on the illness you described.
While this works 99% of the time, 1% patient may turn to catastrophe like the one in the “Unnatural” story.
Similarly, more often than not, a person goes to a broker, a financial adviser, an insurance agent or a banker to ask for a product or solution. The questions are usually like the followings:
“I want to invest in some stocks and funds, recommend me the best ones!”
“Give me a quotation of the cheapest term insurance!”
“We want to buy an endowment policy which give us higher return than the banks.”
They will usually receive a reply which seemingly gives them the desired answer:
“This company has great potential, it is good time to buy”
“This Insurance product is the cheapest based on your requirement”
“This endowment policy has 2% annual return and it is on promotion, you have to buy it now!”
Then the case is closed, everybody is “happy”.
However, have you realized that many times, you are given advice by a person who has never met you before and never want to find out who you are and what you do, just like your doctors.
The main concern of this person, who just know you, is not to help you have a healthy life, but to give you the medicines and products and close the deal.However, this is precisely because many people go to see the doctor and adviser with the intention to just buy a product!
One of the popular debate in financial planning is whether to “Buy Whole Life Insurance” or “Buy Term Insurance and Invest the Rest Savings”. I always find it hilarious because it is just like two doctors arguing whether to use Western or Chinese Medicine without even meeting the patient.
A so-called financial planning without a deeper understanding of the person may just lead to another “Unnatural Death”.