MR SEAH SENG CHOON
Consumers Association of Singapore (Case) executive director
Q What were the best and worst things (financially) that happened to you this year?
A One good thing I did at the beginning of the year was the realignment of my investments to diversify into different types of instruments.
I decided to put approximately one-third into equities, one-third with a fund manager investing in unit trusts and one-third in bonds and currencies.
Diversifying my portfolio turned out to be a right move as equities have gone down during the last 12 months because of falling oil prices and the strong US dollar, but my other investments continued to generate income above the inflation rate.
On the whole, I am glad that I cushioned my investments well generally. My only regret is not moving more of my investment funds out of equities.
However, the bright side is that oil prices are picking up and
hopefully the blue chips that I have placed my money in will do better in the years to come.
Q How has 2016 been for your industry?
A This has been a very challenging year for consumers.
Many consumers were caught off guard and left in the lurch by company closures such as California Fitness and Sky Travel and Tours. Huge amounts of money were lost.
Sadly, there is a clear lack of legislation in protecting the consumers' pre-payment against errant businesses.
Case could help consumers only by way of education to heighten their awareness of the risk involved in pre-payment and the need for them to exercise precautions such as negotiating to pay lower pre-payment amounts, looking out for insurance possibilities and running a background check on the company before committing to a transaction.
There was also an increase in complaints against service lapses by financial institutions.
Even though pre-emptive measures have been put in place by the Monetary Authority of Singapore (MAS) over the last few years to improve financial services, we have yet to see encouraging results.
The primary role of financial advisers is to assist clients by giving professional advice.
From the many grievances received, advisers were found to be engaging in the "selling" mode rather than the "advising" mode. This goes to show that professionalism is seriously lacking among some advisers. This is a grave concern.
We are seeing an increasing number of complaints against e-commerce businesses.
In 2014, we had 485 complaints.
In 2015, we had 523 complaints, and from January to November this year, the number shot up to 581.
Complaints about non-delivery, shoddy products, hidden costs and failure to refund have been common grouses in the past three years.
Q How do you see 2017 panning out? What is in your wish list?
A The decreasing trend in the total number of complaints against businesses will likely continue in 2017.
There were 24,721 complaints in 2014, 22,319 in 2015, and 17,621 from January to November this year. The number would probably be less than 20,000 by the end of this year.
I am glad that the stakeholders' efforts to rein in errant traders have paid off. All stakeholders should continue to work towards reducing complaints in 2017 and beyond.
To sustain this trend, I hope to see more effective measures put in place. Much needed are timely amendments to legislation to keep pace with the changes in the marketplace, strengthening stakeholders' collaboration against errant traders and educating consumers to take the necessary precautions when making purchases and engaging service providers.
Complaints against errant e-commerce businesses are likely to escalate in 2017 and beyond.
My desire is to see the authorities put in a framework to ensure proper conduct. I believe e-commerce businesses will support this as it will help to restore the confidence of online shoppers.
I do see the need for financial institutions and the Government to constantly look at more ways to upgrade and enhance the professionalism of financial advisers.
On the same note, I wish to see more resources available to educate consumers on their rights to receive professional advice.
Provision of pre-payment protection for consumers for their purchases is crucial. This is a very complex matter and the authorities are understandably taking a very cautious approach when consumers advocate for legislation.
For the time being, industry stakeholders should offer protection to gain confidence from consumers on pre-payment.
Case has put in place protection requirements for some industries that participated in our CaseTrust accreditation schemes.
Financial institutions, too, can offer basic insurance protection for clients who make pre-payments using credit cards. Such protection by banks has been a practice in European countries for many years.
I am still waiting for banks in Singapore to adopt the same practice.
Q Going into 2017, please give some tips to retail investors.
A Here are 10 tips:
•Read up on the investment instruments you wish to get involved in;
•Spread out your investment risk by diversifying your portfolios;
•Pay close attention to possible risks and losses;
•Read the investment contract carefully, especially the fine print. Clarify all doubts;
•Do not follow the crowd and jump on the bandwagon without proper professional advice;
•Beware of hype. Get a second opinion when in doubt;
•If a return on an investment is too good to be true, it probably is;
•Look up MAS website's consumer education section (www.moneysense.gov.sg) that features useful information on financial matters;
•Know your rights. Financial transactions are covered under the Consumer Protection (Fair Trading) Act. The provisions can be applied if the business makes misleading or false claims, or commits any of the unfair practices specified;
•For dispute resolutions, in addition to Case, consumers can approach the Financial Industry Disputes Resolution Centre.