Wilfred Ling is one of the few truly “independent” financial advisers in Singapore. He doesn’t accept kickbacks from insurers, fund companies, or anyone else. Unsurprisingly, he doesn’t sell investment-linked insurance products. Instead, he warns people to avoid them “at all costs”.
To distinguish himself from the other 99% of “advisers” who are actually product salesmen, Wilfred refers to himself as a “financial doctor”. He is highly qualified, experienced, and offers comprehensive financial advice on just about every topic imaginable. Unlike most advisers, he charges clients by the hour. He doesn’t cheat and con by pretending to offer “free advice” while secretly pocketing large commissions for pushing crappy products.
In addition to being an IFA, Wilfred is also a prolific writer. Over the past decade, he has written hundreds of articles for his blog, financial magazines, newspapers, and various online portals. He is possibly the most famous IFA in Singapore. His flair for speaking the unvarnished truth about the financial industry has generated loads of controversy within the industry and widespread admiration outside of it.
Wilfred’s path to becoming an IFA was rather unconventional. He studied electrical engineering at the National University of Singapore and then spent ten years working as an R&D engineer. At some point, after visiting a bank and being mis-sold a structured product which performed very poorly, Wilfred became inspired to start doing his own research about investing. He began sharing his findings and his ideas on an online investment forum, SGFunds.com, where he unintentionally became the top contributor. His posts generated so much attention that he and his fellow forum contributors were featured on the front page of the Straits Times in November 2005, in an article entitled “Amateur investors find a voice on the Net”.
Because so many people were keen to hear his thoughts, Wilfred decided that he might as well become a professional adviser. In 2006, he acquired his license and set up a blog, WilfredLing.com.
Earlier this year, Wilfred upgraded his website. His latest posts are now at IFA.sg.
ILAS Savings Plans: The Impending ‘MegaBomb’
In a recent blog post, Wilfred says, “I saw a presentation which showed that nearly 50% of the fund investments in Singapore is through Investment-Linked policies. Therefore, the ILPs market is very huge. We can say it is selling like hot cakes. But I say that people who buy these ILPs are holding a hot-potato.”
Wilfred knows firsthand just how widespread ILPs are (the products are known as ILAS in Hong Kong). A large portion of his work involves cleaning up the messes that other advisers have made. According to Wilfred:
“I’ve yet to come across anyone who did not buy ILP.” 
“Quite often, the amount of ILPs my clients hold represent nearly 99% of their liquid assets. Thus, I find it quite an irony that although I have never sold a single regular premium investment linked policies, I do find myself providing on-going advice for them on it.” 
Wilfred strongly dislikes regular premium ILPs (often marketed as “savings plans”). In a blog post titled “Inferior Products“, he explains that:
“The product is an essentially a combination of 1 year renewable term PLUS investment. Since the life insurer does not provide value add service by managing the risk of the underlying investment, I do not see why would anyone wants to buy such a product. It will be more straightforward just to buy a separate term insurance and invest the difference (which is what an ILP does).”
In another post, referring to the notorious ‘101’ plans, he says:
The charges are so high that you just cannot believe it. There are also marketing gimmicks which are often used. I cannot list the gimmick used in this blog because I do not have money to hire lawyers if I get lawyers letters from all these insurance companies.
The gimmick Wilfred is referring to is obviously “bonus units”. He says:
“I have attempted to post the details of such 101s on my blog before but I instead got a legal threat from an insurance company and had to apology to them in person for posting the truth.”
Wilfred likens the mis-selling of ILAS savings plans to the mis-selling of Lehman Minibonds, which caused tens of thousands of Singaporeans and Hong Kongers to lose all their savings.
Minibonds were misleadingly labeled, and their prospectuses were convoluted, complex, and impossible to comprehend. They were marketed as low-risk, even though they weren’t. Salespeople were paid unusually large commissions to distribute them.
ILAS savings plans (referred to as savings scams by critics) exhibit all the same problems, but they have been distributed far more widely than Minibonds ever were.
For these reasons (and others), Wilfred believes that ILAS savings plans will be the next “MiniBomb”. In a blog post in 2008, he predicted that:
“This next time bomb will not explode within the next few years but perhaps 10 or 20 or 30 years later. This bomb will not be labeled ‘Mini’ but it will be a MegaBomb.”
In another blog post, he elaborated further:
“If a document cannot be understood, there is no disclosure. That is what is happening to [regular premium investment-linked products]…If the insurer has been mis-selling its ILPs, then effectively the insurer exposes itself to legal risk through class action suit and regulatory penalties. They may also be pressured by the regulator and public to absorb the investment risks in the ILP.”
Wilfred’s assessment was incredibly accurate, but he was wrong on one point:
The MegaBomb looks ready to explode much earlier than he predicted.
Banning Commissions Is Necessary to Save the People of Singapore—and Hong Kong
Since at least 2008, Wilfred has been vociferously calling for a ban on commissions.
In 2012, he wrote a letter to the Monetary Authority of Singapore (MAS) in which he presented an extraordinarily comprehensive and well-argued case for banning commissions. In the letter, he claims that commissions are unfair not only to consumers, but also to advisers.
Here are a few of his points:
- Some products pay outrageous commissions for little work done. This is unfair to the client; afterall, the client is the one who ultimately pays the commission.
- Some products pay insignificant commissions despite the large amount of work that the adviser has to do. Thus, the adviser is under paid;
- Many superior products pay no commission and thus advisers have no incentive to recommend these if they are relying on commissions;
- Many important areas of financial planning do not require purchase of product. Advisers will not be paid for helping clients plan for these areas
- The adviser has no incentive to spent time on matters that will not result in a product sale. Clients will not necessarily get the most holistic advice
- “Moral Hazard: Imagine a doctor who cannot charge a consultation fee but could only earn through commissions selling medicine. Can you imagine the health hazard of being prescribed unnecessary drugs just because the doctor could only earn through commissions selling drugs? Similarly, the financial hazard of engaging a commission-based adviser often put the consumer’s family and their retirement in jeopardy.”
The insurance industry often argues that commissions should not be banned because the poor would no longer be able to access “free advice”.
Wilfred demolishes this argument by pointing out that the industry’s so-called “advice” is usually nothing more than a sales pitch. It is also not “free”. It often costs well more than an entire year’s worth of savings. He says:
“I agree that the poor cannot afford to pay fee. But can the poor afford to buy the products which the salesperson sells? There is no evidence to say that the poor has been benefiting from the ‘free advice’ offered by the financial industry. In fact, perhaps it is good for the poor to avoid buying products from salespersons!”
Wilfred also points out that when the majority of people are sold unsuitable products that are guaranteed to provide inferior long-term returns, it could indefinitely delay many people’s retirement, which might one day cause a significant “social and political problem.”
Wilfred sums up the situation best when he says, “[the] fee-based advisory model is not optional; it is a necessity to save the Singapore people!”
It is also necessary to save the people of Hong Kong.
My Feedback for Financial Advisory Industry Review (FAIR)
(Wilfred’s letter to MAS, in which he makes the case for banning commissions. The comments below it are also worth reading.)
A Decade of Quotes: Wilfred Ling Speaks the Unvarnishe
(A collection of quotes excerpted from Wilfred’s articles.)