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Hey There,

 

 

Wealth Management is a service offered by financial institutions such as CIMB Bank to help customers balance their investment management and financial planning.

 

A field survey conducted by Blackrock1, showed that 62% of respondents found investing information difficult to understand, with 48% being unconfident in making investment decisions. Though it might seem daunting at first, we will explore in today’s article, what some of these jargons are and what you can do to get started.

 

But before we proceed further, let us address the elephant in the room. Does Wealth Management only apply to the rich and affluent?

It's For Everyone.


You could be new parents looking to save for your newborn’s education, or in your 20s wanting a head start on early retirement or even be looking to sustain your wealth now that you are in your golden years. Regardless, everyone has some sort of financial need to secure an unforeseeable future.

 

We must remember that the affluent market might have access to a lot more spare funds than the mass market. Which is why regardless of our resources, it is important that we do not dismiss the importance of our own Wealth Management.

 

At CIMB Bank, we do not believe in a “one-size-fits-all” solution because every customer’s needs and requirements, financial background and risk appetites are different. And rightfully so. For example, did you know that you could start investing on Unit Trusts funds for as low as S$100 per month, but does it mean that this is the solution for everyone? Probably not.

 

As bleak as it is now, there are positive news arising from the Covid-19 pandemic, as 72% of respondents surveyed for the Syfe's Retirement Readiness Index 2021 Report2, indicated that the pandemic did prompt them to take immediate action towards planning for their financial future. Something that was less focused on previously.

 

So now that the flame has been ignited, where do we go from here? Let us walk through some of the products in the market to have a better understanding of the options available for you.

Here's Your Options:


To start, we have Unit Trust funds.
A Unit Trust is essentially a pool of money managed by a fund manager, who then invests it into a variety of asset classes like equities, fixed-income instruments and commodities. A big plus of Unit Trust funds is that it provides diversification in your investment, and often has limited exposure to any one particular stock or security. This makes it a great way of investing, as you are not putting all your eggs into one basket.

 

Moving on to Structured Deposits. Unlike traditional Fixed Deposits, Structured Deposits have an investment element involved which means that although the returns are potentially higher than the former, there is no guarantee that it will materialise. The good news, however, is the downside protection - as Structured Deposits come with a 100% capital guarantee, if held to maturity. This gives investors peace of mind, as they know that at the very least, they will not lose their capital.

 

Next up are Bonds or Fixed Income investments. These are essentially loan agreements between companies (or sometimes, even governments) that are financed by investors. Investors usually receive regular payments, also called coupons, which act as an additional source of income until the maturity date, which is when investors are repaid the original amount they had invested (known as the principal). There is however a risk that the companies are unable to fulfill their debt obligations, which leads to a default. Should this happen, your principal may face a risk of being unpaid when the bond matures.

 

Investors therefore need to be cautious when considering Fixed Income investment decisions.

 

On a side note, the general assumption is that you need a lot of on-hand funds to invest in Bonds. However, did you know that with tools such as Reverse Repo, the upfront cash portion can be as little as 30% of the investment value?

 

Lastly, we have Bancassurance, which refers to insurance products sold through the Bank. Insurance is very important and an often-overlooked tool that investors should consider in order to ensure protection not only for themselves but for their loved ones too. This is particularly vital when it comes to easing financial burden, in the event of a disruptive event such as total and permanent disability, critical illness or even death. Insurance solutions come in various shapes and forms, such as Endowments, Term Plans, and Whole Life and Universal Life insurance, and the benefits could include one-off or even regular payments.

Allow Us To Assist.


The Covid-19 pandemic has shown more than ever the importance of Wealth Management. People have had their lives turned upside down, some losing their jobs and primary source of income, and needing to tap into their life savings to get by.

 

In the previously mentioned report by Syfe2, it also revealed that almost 71% of respondents felt that they would not be able to retire comfortably, while a Channel News Asia survey done at the start of the year indicated that we should expect Retirement to cost upwards of S$3,000 a month, primarily due to rising medical costs3. The Global Burden of Disease Study in 2017 showed that while the average Singaporean lives until 84.8 years old, they should expect to spend the final ten years in ill health4.

 

Therefore, if you find that your current plans might not reflect the reality of the situation, it might be time to assess your financial options.

 

That is where CIMB Bank can assist. Other than offering over 400 investment funds and insurance options - one of the widest range offered in Singapore, our Personal Bankers and Relationship Managers are trained to customise solutions based on your goals, financial background and risk appetite. We even made it more convenient and accessible for our customers with our online advisory platform, CIMB Consult-OnTheGo, whereby we can advise you even from the comfort of your home, through video conferencing.

 

No matter your life stage - be it starting your career or a new family, or even planning for your retirement, our promise to you is that we will develop financial solutions and strategies to meet your needs and help you achieve your financial aspirations. Leave the heavy lifting to us so that you can focus on other important things in life!

 

 

Yours Truly,

 

Octo.

Important Notes & Disclaimer

Source: 

 

1 www.blackrock.com/sg/en/insights/people-and-money#barriers-to-access

2 www.syfe.com/magazine/wp-content/uploads/2021/03/Syfe-Retirement-Readiness-Index-2021-Report.pdf

3 https://www.channelnewsasia.com/news/commentary/reasonable-to-expect-3000-a-month-for-retirement-planning-10781800

4 www.moh.gov.sg/docs/librariesprovider5/default-document-

library/gbd_2017_singapore_reportce6bb0b3ad1a49c19ee6ebadc1273b18.pdf

 

 

This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy amongst Singaporeans. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve everyone’s well-being. This in turn, achieves CIMB’s purpose of advancing customers and society.