[PHOTO AT LEFT - Protecting your family in the Citi: Protection needs to start from the earliest life stage — as soon as one becomes financially independent. When one gets married and starts having children, his protection needs will now cover family and income protection as well as securing the education of his children. |MANILA, Philippines]

MANILA, DECEMBER 13, 2009 (STAR) By Ching M. Alano - We all know we can’t take it to our grave (although some have tried), but as long as we’re living above ground, we want to protect the money we worked so hard — and perhaps so long — to amass in our lifetime. While caring for our health, it certainly won’t hurt to care for our wealth, too.

The future begins with ensuring it by protecting your wealth. And Citi is your bank to the future. Citicorp Financial Services & Insurance Brokerage Phils. (CFSI) assists Citigold clients in choosing the right protection products. It is known for assisting clients in growing and preserving their wealth.

“Clients of Citigold, Citi’s wealth management service, do enjoy access to world-class financial products and services,” notes Teng Alday, president of Citicorp Financial Services & Insurance Brokerage Phils.

As their brokering arm in the country, Citicorp Financial Services & Insurance Brokerage Phils. (CFSI) assists in providing Citigold customers with a wide array of investment and insurance products.

Teng asserts, “We are the only brokerage house that can address client needs for both investments and insurance, offering a one-stop financial shop proposition. Last year, our insurance business was ranked first in terms of net revenue, proof of our clients’ trust and continuing satisfaction with our products and services.”

Of course, Citigold clients who come to CFSI already have millions stashed away, so what else would they want?

“Growing one’s wealth is essential even for the already wealthy,” Teng rationalizes. “This is because inflation constantly erodes the purchasing power of one’s portfolio. This can be achieved by carefully investing in assets which provide income, like deposits and government bonds or assets which provide long-term growth, like equities, corporate bonds, investment funds (such as mutual funds and unit investment trust funds), and structured products. Income assets usually carry low levels of risk. On the other hand, growth assets carry higher levels of risk. Investors need to carefully determine their risk profile which will be helpful in determining the appropriate and suitable mix of financial products in their portfolio as aligned with other important factors such as financial objectives, investment experience, and time horizon.

CFSI helps its clients in two ways: grow their wealth by choosing the right investment products according to their financial goals, and then protect their wealth with relevant insurance products.

“Most people think that you need to grow or even have wealth first before you protect it, but financial planning experts believe that wealth generation should go hand in hand with wealth protection,” Teng begins to explain. “This is because while people are busy building their wealth, uncertainties can strike any time and put the wealth and income-generation capacity of people at risk. People should seriously consider employing wealth protection strategies to guard against such risks.”

How does one guard against such risks?

Teng counts the ways:

• Life and medical insurance are some of the more popular ways to protect against the financial implications of life’s uncertainties like death and illness. Today, a client has a wealth of financial solutions at his disposal when choosing to guard against these risks — and this is where CFSI comes in.

• As a broker, CFSI represents the interest of the customer by providing the best product and the best price that can be found on the market. It works with several insurance companies, and does not push any particular brand or product. Instead, it tries to provide the best product solution that will cater to the protection needs of the customer.

On the investments side, by being an active player in the market and having several counterparties to deal with, CFSI is able to also find and execute the best price for the customer.

“May I also add that protecting one’s wealth is not only protecting your monetary and financial assets. It also means protecting the other more important assets in our life — ourselves and our loved ones,” Teng stresses.

But when should one start thinking about protecting his wealth? Would you say when one gets married?

“I’m happy to debunk that myth,” says a beaming Teng. “Protection needs to start from the earliest life stage — as soon as one becomes financially independent. This is usually after you graduate from college and start working — up to your retirement. At this stage, you should try and get protection from major or critical illnesses. When you get married and start having children, your protection needs will now cover family and income protection as well as securing the education of your children. We also encourage retirement planning — it is never too early to consider your future and prepare for life after work.”

Teng enumerates the usual risks people need to protect themselves from: People basically need to protect themselves from the financial loss implications of risks to their life and property. They can either choose to ignore, minimize, transfer, or even share these risks. Insurance policies are one of the ways to protect against uncertainties.

For instance, a sole breadwinner in the family may opt to acquire life insurance to ensure that the lifestyle of his family is maintained, should he die prematurely. Homeowners may consider buying fire (and flood, in some cases) insurance to protect their valuable investments from accidents and natural calamities. Adult children may choose to buy medical insurance for their retired parents to cushion the financial impact of any potential illnesses. Viewed this way, insurance seems to have become an integral part in financial planning and wellness.

Of course, the most basic way one can protect his wealth is to open a savings account dedicated to address a specific “rainy-day” need like hospitalization, education, and even retirement. “However, the person needs to have a very disciplined way of saving to be able to accumulate the right amount that will fully cover the specific need,” Teng points out. “At the same time, this is not a guaranteed way of saving for your future since interest rates can go up and down or something can happen to the person which can jeopardize the planned savings amount.”

But here’s the big “but”: To ensure we give ourselves and our family the peace of mind and security that our most valuable assets are protected, we need to buy insurance — insurance for our home, our car, ourselves, and our family. If we insure our cars and our homes against unforeseen events like flood, earthquake, etc. why shouldn’t we do the same for ourselves and our family?

Teng says with a sigh: “Life insurance penetration in the Philippines is very low — about 7%-10% of the total insurable population. This means that many people still do not see the value of what life insurance can do — ensuring that a family will have the money to pay for the expenses associated with a critical illness, guaranteeing that a child will finish his college education, and having the financial freedom to enjoy their golden years during retirement.”

There are several kinds of financial products that can help people grow and protect their wealth. Teng names them: “Starting with products that allow one to grow his wealth, the most basic would be deposits and government bonds. These income assets provide cash flows at frequent intervals — say monthly, quarterly, or semi-annually. The returns in these products are closely linked to interest rates and inflation trends. Hence, one doesn’t become significantly wealthy over time by investing in deposits and government bonds. But these financial products do serve the purpose of providing cash flows and protection against inflation. Growth assets like equities, corporate bonds, investment funds (mutual funds and unit investment trust funds), and structured products carry higher levels of risk but may provide potentially significant levels of return. Long-term returns of these financial products are usually higher than inflation — that way, there is growth in wealth in real terms as one’s purchasing power is improved. On the protection side, the most basic would be your term life insurance products. These provide life insurance coverage at a fixed cost for a particular period of time. Should one prefer an insurance product with a savings component, there are what you call whole life insurance products that provide not only life insurance coverage but also non-guaranteed dividends as returns from the product’s savings component. Lately, there have been life insurance products that have been linked to financial markets. These products, called investment-linked or unit-linked insurance, mimic the combined benefits (and risks) of investment funds and term life insurance.”

Depending on your life stage, the weights between investment and insurance needs will differ. When you are starting out, it is ideal to be more heavy in investments and then switch to more protection when you get married and have children. Nearing retirement, the mix will shift again, favoring more investments than protection.

CFSI has a range of available products that cover both life and non-life insurance products, and can offer packaged solutions. One of its more popular products right now is a lifestyle protection package that protects both the client/policyholder and his beneficiaries.

“We invite our clients for a Protection Needs Analysis session so we can help match their needs with the appropriate insurance products,” Teng reveals.

If I cannot afford complete protection at this stage of my life cycle, will partial protection do?

Teng replies, “It is perfectly all right not to be able to immediately fill one’s wealth protection needs. As financial planning is an ongoing process for a lot of people, it is however important that the needs are realized early on so that a proper plan can be drawn and the appropriate course of action can be taken. At Citi, we identified four Basic Protection Needs, depending on the different life stages. These cover family and income protection, child’s education, major and/or critical illnesses, and retirement. For each need, we are working with a select group of insurance partners and developed packaged solutions that will answer the identified need. What is more important is that in Citi, we invite our clients to go through a Protection Needs Analysis with a CFSI insurance specialist to be able to identify and rank the four basic needs; determine the amount needed to address the protection need, and agree on a budget that will be dedicated to the identified insurance need; have an annual review of the Protection Plan to ensure that the needs are being addressed over time given the limited budget.

Certainly, CFSI complements the Citigold wealth management service.

Teng tells us, “The concept of wealth management entails that clients are already focusing not just on money they have in the bank but are looking at their assets as a whole. They’re already concerned with growing and protecting their wealth to further secure their financial future and the next generation. So income as well as wealth protection is really an integral part of wealth management. It goes beyond accumulating wealth. At Citi, we make it our business to understand the needs and financial aspirations of our clients. Our objective is really to help them turn their dreams into realities. Part of the services is ensuring that they have access to products which help them reach their financial goals, be it growing their wealth or protecting it or a combination of the two.”

As a Citigold client, you can expect to have access to information and insights from around the world, access to global products and services and exclusive international privileges, and more importantly, access to a team of experts who can guide customers on how to identify and take advantage of opportunities on the market. The dedicated team will analyze and recommend suitable options based on the customer’s specific financial needs and status, making the support truly personalized.

With Citigold, customers also have the benefit of going through a wealth planning session with their relationship manager to determine their financial goals, risk profile as well as their investment horizon. Armed with this information, various investment options are presented and clients can then make their choices accordingly.

Such golden words of wisdom from Citi.

Chief News Editor: Sol Jose Vanzi

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