Questions About New Independent, Its Management And Track Record

Who is New Independent and how safe are our investments?

New Independent is a management owned organisation. NI is driven by the same management team that founded First Independent, Singapore's first de facto Independent Financial Adviser, which has meanwhile been acquired by a local financial institution.

We operate under licence from the Monetary Authority of Singapore with access to the widest range of investment and life insurance products

The Monetary Authority of Singapore police our compliances stringently, including the strict segregation of clients' funds and the qualification and conduct of our employees. Thus, your investments with us are very safe.

Who are the key staff behind New Independent?

Joseph Chong is the CEO of New Independent. Previously, he was founder of First Independent and before that Vice-President in charge of the Investment Advisory Division within the United Overseas Bank. Prior to that, he was Senior Portfolio Manager at UOB Asset Management (UOBAM). Noteworthy among his achievements at UOBAM was the success of the United Global Capital Fund. During his tenure as Portfolio Manager, the Fund was distinguished with the Singapore's Fund of the Year award in the International category. During the period 1997 -98, he also led the UOB bank-wide strategy review team, reporting directly to the Chairman & CEO. He holds postgraduate qualifications in engineering and investment management. He is AFP certified.

Jason Teoh, Executive Director at New Independent, is in charge of operations. Prior to New Independent, he was co-founder of First Independent. Jason has extensive experience in the field of Investment Research and is a CPA. He is also AFP certified.

How qualified and experienced are New Independent Financial Planners?

Virtually all our Financial Planners have had tertiary education and they possess the required regulatory certification. In addition, it is our internal quality standard requirement that all Financial Planners should obtain the Associate Financial Planner (AFP) certification or its equivalent.

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 Questions About The NI Wrap

Are all the unit trusts in your NI Wrap Account service offered with zero front-end load?

For the NI Wrap account, all the unit trusts we distribute have 0% front-end load! Compared to the typical 5% front-end load charged by other distributors, such as the banks, this is very compelling. Given that clients of the NI Wrap receive on-going advice, this is equivalent to getting FREE continuous investment counseling for at least 2 years!

With regard to the NI Wrap and the offer of 0% commission. Am I correct to say that I wouldn't be paying any load charges or management fees at all?

Correct. You need not pay any front load charges for the funds in your NI Wrap portfolio account. As a NI Wrap client, you only pay a low annual fee and nominal transaction fees of S$15 per transaction. The annual Wrap Fee is for the on-going expert investment advice you receive and the value added services provided. As a client, you are guaranteed continued service from New Independent's professional financial counselors.

In return for no front end loading for unit trust purchases, NI Wrap requires clients to pay a maximum of 1.98% annual wrap fee. Wouldn't I be better off just paying the one time front-end load, which can be as low as 2.5%?

Comparing the front-end load charges and the annual wrap fees is like comparing apples to oranges. The front-end load is a charge for buying the fund and the fund manager levies it. On the other hand, the annual wrap fee is to cover the costs incurred in providing value added services such as providing capital market insights and re-balancing of investment portfolios according to the most appropriate asset allocation strategy.

The NI Wrap is a totally different value proposition whereby the clients' interest is aligned with the interest of New Independent and the product manufacturer. What we have done is to decouple value-add from the cost of transaction. We bring transparency with our NI Wrap.

For those who believe in the one time payment of front-end load, it is indeed worrying to think whether there is any incentive for the distributor to look after their welfare in the long term. These fears are allayed with the NI Wrap account as the client is guaranteed continued service from New Independent's professional financial planners. However, we, at New Independent, believe the choice is the clients'. We will accommodate clients who prefer the traditional pricing structure of paying a front-end load.

It seems that the NI Wrap is only for those who switch funds often? Is this true?

It is not true that the NI Wrap account is only for those who switch between funds often.
To illustrate with an example,

A client goes to a traditional distributor and pays upfront 5% front-end load. The investment turns out to be a disaster for one reason or another. He switches out and has to pay another 5% front-end load. He is down another 5%. Effectively, he pays a total of 10% front-end load. With the NI Wrap, he is at most down 2.5% [1.98% annual fee + 0.5% switch fee = 2.48%].

Thus, you don't need to switch funds often to benefit from the NI Wrap account.

If unit trust investment is promoted for long-term investment, why is New Independent suggesting a regular review and switch of funds in its NI Wrap service?

We do not suggest a regular switch of funds in our NI Wrap service. Our investment approach still focuses on providing realistic returns with a long-term prospective. We strongly recommend diversification and we are advocates for active investment management. Regular review is intrinsic to the NI process. We continually monitor changes in market conditions and the quantitative and qualitative aspects of the funds such as their historical and projected performance as well as the quality of fund managers. The fund with a superior investment approach and proven track record purchased 2 years ago may not have the same merits today. Due to these changes, an investor will have to re-balance his investment portfolio. There is also the need to re-balance when the circumstance of the client and their financial objectives change through time and their moving from one life stage to another. Thus, whenever necessary, we will make recommendations for clients to re-balance their portfolio. Our advisers will advise the clients on whether to buy, hold, sell or switch their investments to make sure their portfolio continues to perform year after year. Of course, the final decision lies with the client.

The process described above is analogous to sailing. To get maximum speed in a given condition, the sails and rudder has to be at a certain angle. Changing wind and current conditions make it necessary for a sailor to trim the sail frequently or even tack. Doing nothing as conditions change may not only be detrimental to one’s speed but could lead to capsize.

Must I keep the funds in the Wrap Account for a minimum time period? If yes, what is the minimum time period and what if I need to sell the funds because of financial needs?

There is no minimum time period to maintain the Wrap account but it is also not advisable for clients to cash in their NI Wrap investments in time of financial constraints. Through the NI Financial Planning Programme, we minimise the possibility of this unfortunate event by thoroughly examining the needs and risk appetite of each individual client before recommending the funds for investments.

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 CPF Investment Schemes

Can one utilise funds in the CPF to invest in the NI Wrap account?

Yes!. CPF funds can be part of the NI Wrap account..

What are the avenues for my CPF investments at New Independent?

Clients can still utilise their CPF funds to invest in individual unit trusts, insurance products, statutory board bonds and shares. Thus, clients have a wide range of products available to them for investment using their CPF funds.

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 Comparison Of New Independent With Others

How do New Independent's products and services stand out against the current financial planning dominators like the banks?

A key element of quality financial planning is impartiality and technical rigour and that is a quality New Independent fulfills right to the letter. How do you judge the quality of advice from a bank that is required to sell a certain quota of the products it manufactures? Even if the bank does not manufacture, having a special agreement to only sell a specific product from a particular product manufacturer makes it impossible for that bank to be impartial.

Compared with the banks and other financial institutions, New Independent stands out because of its integrated proprietary financial planning solutions such as the NI Concept Plan and NI Wrap. No one offers independent financial planning advice, with the kind of qualified financial planners and innovative pricing structure like us.

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 Insurance Products

I understand that New Independent has launched an Insurance programme. What is it?

The programme is NIINA - New Independent Insurance Needs Analysis. It is a proprietary tool we use to calibrate client's insurance needs accordingly to their life stages and available investment assets. Our risk protection is divided into six key areas: basic medical, major illnesses, long-term care, disability, total permanent disability and death. With these risks in mind, the needs analysis looks at your financial concerns at the various stages of your life, e.g. as a single adult, married with children and when you retire. We then help formulate an action plan to address these concerns and provide regular reviews to make sure your financial plan is in tune with your evolving lifestages.

How can I be sure that New Independent will recommend the most cost efficient insurance products and will help me save money from its recommendations?

With NIINA, our financial planners will customise your protection plan by finding the right product combination to meet individual protection needs. Unlike the banks or tied insurance agents, we offer more than 150 life insurance products from 7 leading insurance companies so you can choose from a wide range of products. We are not related to any of these companies nor are we allowed to have any special agreements by law. Having determined the right products, we source for the most competitive products in terms of pricing and product features that meets the protection value required by the client. Only at New Independent do we venture to offer you the advice to "buy term and invest the difference". We take care of both insurance and investments at the same time. Our financial planners guide clients closely to ensure that they do not "buy term and spend the difference", a common investment pitfall among the DIY investors.

I heard that New Independent markets insurance products from a few insurance companies, but they do not include the top insurers like AIA, Great Eastern or Prudential. Why is this so?

These insurers have a large agency force and at the moment, they have not developed their alternative distribution channels such as life brokers. But we can assure you that our more than 150 insurance products from the 7 insurance companies are more than sufficient to select the right product combination for you. By choosing the best and most price-competitive combination from a spectrum of insurance companies, we are able to deliver a value proposition far superior to anything that a single insurer can possibly provide. Indeed, if you had bought all your policies from a single insurer, we would be prepared to construct a comparative insurance portfolio using the best and most cost-effective products from multiple insurers. This service is FREE.

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