The idea of a checkup is to unearth potential issue before they become a problem. That is why Heartland Boy takes advantage of his corporate benefit to go for annual health checkups. Unfortunately, not much attention has been devoted towards financial health checkups- something that Heartland Boy thinks merits equal importance. Afterall, having good financial health is fundamental to leading a secure and happy life. Taking a holistic financial assessment to ascertain one’s financial health is exactly what MoneyOwl, a social enterprise and joint venture by NTUC and Providend, has launched recently. Here is Heartland Boy’s review of MoneyOwl’s Comprehensive Financial Planning service.
A Comprehensive Financial Planning Platform
As a Comprehensive Financial Planning service, MoneyOwl is able to analyze its client’s cashflow, net worth, insurance coverage, projected CPF LIFE payouts, financial goals etc. No stone is left unturned as MoneyOwl has built in algorithms to integrate national schemes such as Central Provident Fund (‘CPF’) into its financial advice. It forms part of the contents which the client can expect to obtain in a report as shown in Diagram 1.
After receiving the comprehensive financial plan, a MoneyOwl advisor would be in touch with the client to walk him/her through the report in a 2-hour long process. Altogether, this part-robo, part-human process makes it far superior to the traditional approach towards financial planning.
The Bionic Advisory Process
To get your hands on the comprehensive financial plan, the client would have to first submit their personal information on MoneyOwl’s website. To do so, it is mandatory to create an account with MoneyOwl first. To expedite the online submission, it is definitely most helpful to get the following materials ready first:
- Details of dependents (for children, think about whether you plan to sponsor them for an undergraduate degree programme)
- Annual income and expenses, current assets and liabilities (eg: outstanding home mortgage), CPF balances (which can be retrieved using MyInfo)
- Your existing insurance policies
- Your ideal retirement age
- Lastly, dont forget to request for a promo code to waive the fees! (promotion is available for a limited time only though)
This information would be required as shown in the Road Map laid out by MoneyOwl in Diagram 2.
If you have such information ready, the entire online submission process takes only approx. 20 mins. Not to worry, because you have already created an account, you can always store and save your information and continue later. Recognizing that this can be a time-consuming and mentally-draining process, MoneyOwl inserted nuggets of information to encourage you every step of the way! An example is shown in Diagram 3.
Once all the required inputs have been keyed in, the client will have a chance to review them before they are locked. After submission, the client will receive a detailed report with an MoneyOwl advisor contacting the client a couple of days later.
The Human Advisory Process
Heartland Boy met his MoneyOwl advisor in MoneyOwl’s office for a 2-hour review. Here’s a few valuable insights that he gained.
1) Seeing His Future CPF
MoneyOwl’s CPF Analyzer serves as a crystal ball for Heartland Boy to gaze into his own future. Based on his current salary and existing balances, he was able to tell the ending balances in his CPF at age 55. He was also given the age that he would reach Full Retirement Sum (‘FRS’) in his Special Account. In addition, MoneyOwl’s robo-advisor also estimated the required FRS amount when he eventually turned age 55.
2. Investment Portfolio
He was also informed that too much of his cash was sitting idle when they should instead be invested. Basically, his cash is not working as hard as him! MoneyOwl believes in passive investing and staying invested to generate average annual returns. To this end, MoneyOwl provides access to low-cost, broadly diversified funds such as Dimensional Fund Advisors (DFA). Note that another added advantage of signing up for the comprehensive financial planning is that the $500 fee (payable after trial period is over) is credited into the client’s investment account to kickstart their wealth accumulation journey, acting like a rebate of sorts.
3. His Ideal Retirement Age
The most important insight was the amount of retirement income that he can expect to receive at his ideal retirement income age. Certain assumptions have been made by MoneyOwl’s algorithms:
- Since CPF LIFE is an excellent annuity in the market, it assumes the Retirement Account will be maxed up to Enhance Retirement Sum if the client is able to afford it.
- An investment portfolio is assumed to generate returns of approx. 6% p.a. and would then be withdrawn at 4% p.a. at the retirement age chosen by the client.
Such analysis made him realised that Financial Independence Retire Early (FIRE) was still a distant dream.
With this comprehensive financial planning service, MoneyOwl has become a one-stop solution offering a whole suite of financial services which even includes will writing. For instance, MoneyOwl is able to offer a fit for purpose product when the insurance (risk proofing) component of the client is inadequate. An education process can also be provided to highlight the importance of investing in the market and staying invested. In a fast-paced society such as Singapore, Heartland Boy thinks it is important not to neglect one’s financial health. That is because creating a sound financial present not only alleviates current stress, it also lays the foundation for a stable and secure financial future.
This article is written in collaboration with MoneyOwl but the opinions expressed here are entirely his own