C OF F E E BR E AK

HIGHLIGHTS

Macro View:Dark Clouds or Sunny Skies?

Holistic Wealth:Can Our Children Handle a Million Dollars?

Family Happenings:~ Emergenetics: The Relational Brain~ How I Pursued My Passion~ Christmas Party 2009~ Spring Cleaning for the New Year

Providend Article:“The Importance of Staying Invested”

Feb 2010

CoFFee Menu

FROM THE BARISTA 1

MARKET OUTLOOK Dark Clouds or Sunny Skies? 3 Fund Watch – Fund Notes 8 Markets Decaf 10

HOLISTIC WEALTH Can Our Children Handle a Million Dollars? 13

BECOS YOU ASKED What is the Strategy in Choosing the Mix of 15 Funds to Be Used in the Portfolio? Is This the Best Time to Consider Refinancing? 17

FAMILY HAPPENINGS Emergenetics: The Relational Brain 19 How I Pursued My Passion 21 Christmas Party 2009 24 Spring Cleaning for the New Year 27

PROVIDEND IN THE NEWS The Importance of Staying Invested 29 Media Exposure in Dec 2009 - Jan 2010 32

* If you would like to receive only the soft copy of CoffeeBreak, kindly drop me an email nerissa.xue@providend.com

1

Fr o m Th e Ba r i s T a

Just a few days ago, I decided to drop by to watch my colleagues play during our regular Wednesday games segment (I had been excused as I am expecting my second child). As I watch these adults with the average median age of 35 years running up and down the basketball court playing their game of Captain’s Ball, my heart is filled with pride.

Pride because this is a group of committed people acting on what they believe in and what they have set their hearts upon.

We started the weekly games segment since the beginning of Providend’s existence as we believe that physical fitness is important for our overall well-being as a company and also for building team spirit. Many of us were not very fit when we first started. But we have persevered and with the encouragement of the stronger members, and the “rah rah-ing” of our commander-in-chief Chris, we became a strong team. I must say that Team Providend plays a mean game. We have had friendly matches with a few of our vendors, and even with our landlord. For all of these matches, we played hard but by the rules, we never played dirty or overtly aggressively and the results show. We always win our matches but never once had brushes with our “competitors”.

At our recent company retreat, we re-visited the “Spirit of Providend”: to have a Strong mind and Passionate belief, to Inspire one another to Run the race Independently yet as a Team. At Providend, our purpose is to assist our clients to achieve their life goals by providing the most honest, independent and competent financial advice. But to stay true to doing the right things all the time is not easy. There will be times like the past year where our philosophy of buy-and-hold is questioned, when our cash flow is battered and we have to tighten our belts, and we are emotionally drained as we coach our clients through the roller coaster ride. This is where we need to have a strong mind, and dig deep into what we believe in passionately.

There will be lots to do moving forward. To ensure a strong future for the company and its stakeholders, we need to lay a

Editor

Nerissa Xue

Writers

Evelyn GohDaryl LiewMudit GoenkaMichele LeeJames HuanPhua Boon WahCherie Kiew Loh Chiu Weng Audra Lim

2

strong foundation. 2010 will be a year of laying foundations, of strengthening processes, and deepening relationships with clients. This is not a 100 metre sprint that we are running, but a marathon. Our business model is not based on harvesting the most from our clients as quickly as possible, but that of a long-term trusted advisor. To run this race well, we need to be fit physically, corporately, structurally, and financially. And we need to be a people who pursue excellence in all we do, to constantly look out for better, smarter and more efficient ways of performing our individual roles. And we need to do this together, to harness the strengths of the individuals synergistically as a cohesive team.

The year 2010 may be sunshine all the way, or it may be tainted with dark clouds in the horizon. But I know that Team Providend will stay true to our calling, to continue to be the flag bearer of doing what is right for you, our family of clients. I know because we have been doing it for 7 years (and counting) and because that is the SPIRIT of Providend.

May you have a blessed year ahead.

Evelyn Goh,Executive Director & Deputy CEO

3

a ma r k e T ou T l o o k bDark Clouds or Sunny Skies?

By Daryl Liew, Chief Investment Strategist

Rising Policy RisksI have been attending quite a number of investment seminars recently to get a sense of what the other financial professionals are saying, as well as for a gauge of investor sentiment. The general feel I get is that most investors are cautiously optimistic that we have turned the corner, and are thus more open to ideas as to where to park their money. Practically all the speakers I have heard thus far have been spouting the same lines: equities are the preferred asset class for 2010 because of undemanding valuations and a positive outlook as

the economy recovers. Government bonds are however on the “avoid” list due to stubbornly high deficits and the likelihood of interest rate hikes this year. If the experts are right, then this year will be a rollicking good year …

It is dangerous however to read too much into these forecasts. I am sure you remember Chris saying that a market outlook is analogous to a weather forecast, as it simply provides an intelligent assessment of what might happen. At the end of the day, many other factors could conspire to distort the final outcome. These outlooks however

4

do have some value in enabling us to be better prepared for what lies ahead. Having said this, let me now share our thoughts and comments on some recent developments affecting the markets.

Thus far, it has been an inauspicious start to the year with most equity markets down for the month of January. The market correction can be traced to two main reasons:

- China starting its credit tightening cycle earlier than expected; and

- President Obama’s surprising shift in stance to adopt the “Volcker rule” (named after former Federal Reserve Chairman Paul Volcker) to step up regulations on the banking sector.

Let me address these two points as well as some of the other factors we believe will have important bearings on the markets.

Will China tightening derail the recovery?While everyone knew China would be reining back lending growth, nobody anticipated that the government would have acted as quickly as it has. China’s central bank first surprised the market by raising the yield on the sale of its three-month bills by 4 basis points in the first week of January. It then increased the yields on one-year bills by 8 basis points the following week, while also increasing the bank reserve requirement ratio by 50 basis points. When these moves did not seem to have the desired

effect, the banking regulator then called up individual banks to tell them to limit lending. (See page 10 for more on China’s tightening.)

The reason behind China’s quick actions became obvious when reports emerged that China banks had lent out a whopping RMB1.2 trillion in the first two weeks of the year! This is an astounding amount considering the government recently announced its targeted loan growth was RMB7.5 trillion for the whole year. The government was obviously unhappy that the banking industry had chosen to disregard the guidelines and felt it had to step in to send the message that the current pace of lending growth was simply unacceptable.

China has also had to control the pace of lending this year because credit growth is contributing to higher inflationary pressures. December consumer prices accelerated rapidly, rising 1.9% year-on-year, up from the 0.6% increase in November. Property sales also surged 75.5% year-on-year to RMB4.4 trillion in 2009, sparking fears about the emergence of asset price bubbles. Meanwhile, Chinese citizens have been increasingly frustrated as the sharp rise in property prices has made buying property unattainable for the average man in the street. The Chinese government is aware of the pitfalls of unrestrained growth and wants to avoid following in Japan’s footsteps. Japan enjoyed tremendous growth in the 1980s, leading to a sharp appreciation in asset prices by the end of the decade.

5

The situation got ugly really quickly following the bursting of the bubble and Japanese asset prices have never recovered to those lofty levels.

The concern with China tightening is how it will affect the local economy and the rest of the region. China’s huge fiscal stimulus programme and RMB10 trillion in new loans helped deliver an impressive 8.7% GDP growth last year. With the government now obviously stepping on the brakes, one of the major drivers behind the sharp surge in asset prices will be eliminated. Indeed, history has shown that equity markets typically correct around a 40-day period at the start of a tightening cycle. This is because borrowing costs increase and there is generally less money in the system to keep pushing prices up. It is also interesting to note that the China equities market has been underperforming since August. The Chinese stock market led in the initial correction in early 2008 and also led the recovery later that year. With the rest of the world likely to commence their own tightening measures soon, is China once again leading global markets down? And if so, is this just a temporary correction, or the start of a downward trend?

The answer to these questions really depends on the pace and degree of the tightening and whether this drastically impacts growth. The good news is that the Chinese government has thus far taken a gradual approach to reining in liquidity, though there are expectations for an interest rate hike in the months’ ahead. Ultimately, everything will depend on

whether inflation and asset prices continue to head higher. If these trends persist, expect firmer tightening measures. In this regard, it is disturbing to hear that some Chinese banks are transferring loans to non-financial institutions to reduce their reported loans so that they do not fall foul of the regulators. I am sure the regulators will look into this matter because if left unchecked, it could dampen the effectiveness of the lending curbs.

Policy risk premium on the riseThe other major concern affecting markets was President Obama’s financial reform plan, the timing of which, coming straight after the Democrats’ loss of the Massachusetts Senate seat, smacked of a desperation move to deflect attention from his failure to pass through his healthcare reforms. The “Volcker rule” basically calls for sweeping changes to the way Wall Street operates, prohibiting banks from “owning, investing in or sponsoring” private-equity groups and hedge funds. It also bans banks from running their own proprietary trading desks. The aim of the plan is to make banks smaller and less risky.

This risk is one that we highlighted at our last Coffee@Home event, when we stated our view that we have now entered the era of “big government”. A major financial catastrophe is always the catalyst for a massive change in regulations as governments attempt to change the status quo to prevent a repeat of the crisis. In this regard, it is

6

interesting to see a shift in power within President Obama’s economic team – the President initially deferred to Treasury Secretary Timothy Geithner and former Treasury Secretary Larry Summers, who were the key parties in the drive towards the liberalisation of the financial sector in the 1990s. Meanwhile, Paul Volcker was relegated to the sidelines as he continued to talk about the need to separate the operations of commercial and investment banks – effectively calling for a reinstatement of the Glass-Steagall Act (an Act Summers helped get repealed). With his dwindling popularity, President Obama obviously believes he needs a change of strategy. He probably has found in Volcker the one person who arguably has the best chance of leading the US out of the current economic crisis.

While the future of the US economy may have improved with Volcker at the helm, this move towards big government increases the policy risk premium, which had largely been removed over the past two decades due to market liberalisation. Global equity markets sold off following President Obama’s comments as the proposed changes would have a severe impact on the bottom line of financial institutions. The banks will not go down without a fight, so expect volatility in asset markets to increase in the months’ ahead as governments and financial institutions debate and flip-flop over the proposed regulatory changes.

economy is improvingMeanwhile, the divergence in economic

conditions between the developed and developing worlds continues.

The unemployment rate has remained stubbornly high in the US and Europe with the official rate standing at 10%. What is worse is that the figure does not look like it will be falling anytime soon, which is why President Obama has now made job creation his number one priority. The situation in Asia and emerging markets is at a polar opposite. Singapore’s resident unemployment rate fell from 5% to 3% in December (partially due to the Jobs Credit Scheme), while Japan and Brazil both also reported better jobless figures.

The global economy is definitely looking a lot better than it did a year ago. The big question now is whether the improving conditions in the emerging markets can continue without a major contribution from Western consumers, because it appears that the Western consumer is still going to be de-leveraging for a few more years yet. Until a new major growth driver emerges, the global economy will likely only grow at a slower “new normal” rate.

Corporate earnings – a mixed bagUnlike most of the other commentators, we still believe asset prices are looking a little pricey. The main reason for our view is the high amount of earnings growth currently factored into prices. As such, the market is setting itself up for disappointment if the anticipated earnings figures do not materialise. The

7

latest fourth quarter earnings season in the US is illustrative of this point. Till the end of January, almost half of the S&P500 companies have reported their earnings. 78% of the companies’ earnings came in above analysts’ expectations while 67% topped the consensus expectations for revenues. While these numbers look pretty good, investors have however focused on the weaker forward-looking guidance provided and started adjusting their expectations downwards, especially in light of the latest macro-economic developments.

While current equity valuations for most markets are not terribly overvalued, a lot depends on whether companies can continue to deliver the estimated 30% growth in bottom line. Companies have thus far managed to deliver better figures because of cost-cutting strategies, something which will be difficult to consistently replicate quarter after quarter. A period of consolidation to allow fundamentals to gradually improve will probably be healthy for markets, allowing prices to trend higher thereafter.

no changes to portfolios In light of all these concerns, particularly on the policy front, we expect market volatility to continue to be high in the months ahead. Having said this, we are not making any changes to the asset allocation of our portfolios, as we believe that they are suitably diversified to ride through the vagaries of the market. While we believe that a double-dip recession is

at the moment a rather remote possibility, we will continue to keep a close eye on the markets and stand ready to tweak the portfolio allocations if circumstances dictate it.

According to the Chinese calendar, 2010 is the year of the white metal Tiger, symbolising toughness, generosity and wealth earned with hard work. It is interesting reading all the diverse forecasts by the various geomancy experts – some say the year will be a dutiful, family-oriented and dependable year; others characterise it as being a tumultuous year, one for knocking down walls rather than building them. Hopefully we will see more of the former rather than the latter. Then again, one should probably not put too much stock into such predictions, and instead stick with the evergreen investment principles of maintaining a suitably diversified portfolio and remaining invested through the business cycle.

Here’s wishing one and all a healthy and prosperous year of the Tiger!

8

An update on the Templeton Asian Growth FundAsia has been in the limelight for the past year due to its economic robustness and quick market recovery. Asian economies managed to deliver positive growth in 2009, unlike many of their Western counterparts. China emerged as the true star last year, and was mostly responsible for leading the region out of the Great Recession. This regional growth translated into stellar market performance.

As a result, the fund recovered some of its losses from 2008. The fund rose 105.4% in 2009, beating the benchmark by 33.5%. In comparison, it was down -59.8% in 2008 and underperformed its benchmark by 7.6%. This performance is characteristic of the fund’s long-term track record in beating the benchmark - the fund is up 128.1% (17.9% p.a.) for the last 5 years compared to benchmarks’ 87.6% (13.4% p.a.). The fund size has also grown significantly from US$2.84 billion as of end 2008 to US$8.22 billion as of end 2009.

The outperformance in 2009 can be largely attributed to the overweight of the commodity-related and consumer discretionary sectors. As economies around the world displayed tentative signs of recovery, the metals and mining industry and the oil, gas and consumable fuels industry benefited. These included companies based in India, South Korea, China and Thailand. The consumer discretionary sector also benefited from rising per capita income and strengthening demand for consumer goods and services in Asia, especially certain Chinese and Indonesian automobile companies.

At the end of last year, the fund had 24.1% in China, 22.9% in Thailand and 22.3% in India. In terms of sector weights, the fund had 27.6% in energy, 17.3% in materials, 12% in banks and 11.5% in automobiles and its components. The large allocations to China and India stem from the domestic consumption play; the allocation to Thailand is a valuation play. While Thailand is definitely a more volatile market due to its uncertain political situation, this risk is inherent to the particular market and has been present for quite some time now. As such, the fund managers continue to hold the undervalued Thai stocks as they have a long-term approach to investing.

Going forward, the fund managers remain positive on the region’s economic growth

a ma r k e T ou T l o o k bFund Watch – Fund Notes

By Mudit Goenka, Investment Specialist

9

due to its strong fundamentals. They expect corporate earnings to remain robust for the next five years and thus anticipate healthy stock market growth.

As such, the managers continue to like commodity-related and consumer-related stocks. Commodity prices should rise over the next few years partly because of US dollar weakness, and partly because global demand for commodities is expected to outgrow supply over the long term. Consumer spending is another significant growth driver in Asia. Rising per capita income and a growing middle class all point to increased demand for a wide range of consumer products and services. In this respect, the fund managers are focusing on areas where consumers will have an impact, e.g. consumer banking, retailing and consumer products.

The fund managers recognize the inherent risks in Asian markets and expect corrections to take place even as the region grows. That said, they view these corrections as opportunities to increase their holdings in selected stocks with strong earnings fundamentals. The fund is currently not expensive as its Price/Earnings ratio is at the middle of the historical 10 year range. In addition, the fund is still cheaper than its benchmark despite having risen faster in 2009. The fund’s dividend yield is higher too.

Price-earnings Ratio Dividend YieldTempleton Asian Growth 16.97 2.08MSCI Asia ex-Japan 23.84 1.88

This fund is currently in our PGP Retirement Income Strategy and Growth Strategy (PGP funds), and all Balanced iFast cash portfolios. The retail share class has an annual management fee of 1.85%, while the institutional share class (that we are able to invest into for the PGP funds) has a lower annual management fee of 0.9%.

10

It should be a requirement that those aspiring to be Chinese bureaucrats have a strong heart. Here’s why. Bureaucrats have had to keep the economy chugging along, while making sure their actions do not result in overheating.

From the recently released economic data, it seems like they have been too successful:

- The economy grew 8.7% in 2009, exceeding Beijing’s 8.0% target.

- Inflation has risen faster than expected. Consumer prices accelerated to 1.9% year-on-year while producer prices accelerated to 1.7% year-on-year in Dec.

- The property market has been revived, but surging sales (+75.5% in 2009 to RMB4.4 trillion from a year ago) have pushed house prices up out of the reach of the average “Zhou” (Joe).

- Finally, RMB600 billion was lent in just the first week of this year – almost twice as much as the monthly average for the second half of last year!

These are heart-stopping numbers indeed.

To prevent the situation from rising out of control, bureaucrats sprang into action. Bank regulators restricted lending at some banks, reduced the amount that banks can lend, and made it more expensive for banks to borrow from one another. The central bank raised the yield of its three month bills, and drained a further RMB200 billion from the sale of 28-day repo agreement bonds. The government announced it will clamp down on unscrupulous property developers that hoard or delay projects.

Chinese equity markets corrected in response, as these were taken as a sign that the liquidity taps could soon be turned off. Speculation is now rife that the Chinese government will raise its benchmark interest rate soon. The other Asian markets fell with the news, as their growth has been very intertwined with China’s. Less liquidity sloshing about in China could mean fewer buyers for Hong Kong property, weaker demand for financial services, and less commodity imports.

The question is whether the Asian markets can overcome this correction quickly, or

ma r k e T s De c a F

By Michele LeeInvestment Specialist

11

if they will be swallowed by it. History has told us that Asian equities will fall at least 10% when policymakers start tightening the liquidity taps*. A recovery will be dependent on a positive economic outlook.

Looking at the current cards that the Great Recession has dealt us, there is no doubt that our region looks good because of the China factor. But as the Chinese bureaucrats adjust the intensity of the stimulus programs to a level that is ‘just right’, I think we can expect to see more volatility as investors deal with the uncertainty. Even so, I think the bureaucrats can be trusted to keep the economy chugging along – no sense in self-prescribing a heart attack if growth slows enough for the netizens to protest the slow growth and high prices.

In the longer term when the shift in power from the West to East has been completed, the region will be more self-sufficient. Till then, this is a good opportunity to recalibrate all of our expectations and assumptions. That is what we are now working towards – a new state of affairs that we can call “normal”.

*UBS’ calculation of the impact of the US Federal Reserve’s tightening in 1994 and 2004.

e DID You knoW? f“Singapore has got a new playground”

Resorts World Sentosa (RWS) has become one of the ‘hottest’ talking points in town: the first integrated resort to open on our shores – how exciting!

+ Want all-day entertainment? The casino is open 24/7.

+ Cannot find a babysitter? Send them to Kids Club and the two amusement parks.

+ Want to avoid the masses? Take the high-rollers’ private tunnels to the gaming rooms.

+ Have to shop? There is Vertu, Jimmy Choo and Victoria’s Secret.

+ Need to work and play? Check out the MICE facilities.

+ Just want to rest and relax? Stay at Spa Villas.

+ Feeling artistic? Visit the Chihuly studio for glass pieces, or Michael Graves gallery for a piece of art by the man who designed the resort.

12

That covers almost all the demographic groups. Even those who cannot afford the $100 casino entrance fee or a hotel stay probably can pay $66 for a day at Universal Studios. It really is a brilliant plan. The place has the glitz of Las Vegas, the fun of Florida, and has no other real competition in Asia (Macau offers a whole different experience).

The tourism industry as a whole will benefit. Day-trippers will need a place to stay in town. Retail and F&B outlets on the periphery (i.e. Vivocity, Dhoby Ghaut) should see greater footfall and inventories moving faster. More employees will be needed to deliver the RWS experience.

Despite all the worries about the global recession, the crowds will come. Not only is RWS the new place to visit, but also a more affordable and comfortable option than flying 24 hours to Las Vegas. Asians have the money to spend, and they are exercising their dollar power.

But there is a caveat: China has to grow for Asians to spend. Will China continue to pump huge amounts of liquidity into the system, or will they turn off the spigots? I think it will be somewhere in between these two extremes. (I write more about this on page 10.) Coming back to RWS, the razzle and dazzle will not disappear, but we need to see the situation as it is: the glass is half-full, with the potential to be full.

13

The front article of the “Home” section of The Straits Times of 28 January 2010 shouts out “PRs, new citizens chalking up huge debts”. The main point of the article appears to be about debt problems faced by PRs and new citizens. As you read further however, you begin to realize that the majority of those with such problems are still Singaporeans. It is surprising to note that the amount owed by each individual who seeks help at Credit Counselling Singapore (“CCS”), an organization which counsels and helps debtors work out how to repay their debts, is on average $70,000! You can’t help but wonder how people put themselves in a position where they can chalk up such debts (those with unavoidable reasons aside, such as medical bills).

a ho l i s T i c We a l T h bCan Our Children Handle A Million Dollars?

By James Huan, Head of Legal & Estate Succession

The number of people seeking help from CCS has been on the uptrend in the last few years. This is obviously partly due to the financial crisis and job-related problems. It is, however, pertinent to note that overspending was one of the top reasons resulting in indebtedness. This remains a risk to all of us, whether Singaporeans, PRs or new citizens. And this may particularly be so for the younger generation who will likely have it much easier growing up.

If you (our client) are reading this, and have children, it is likely that your children will or have grown up in an environment where they have more options and opportunities in life, more exposure to the pleasures and luxuries of life, due to your affluence. This is

14

perfectly natural and expected, but which also comes with risks as mentioned above. Though clichéd, the saying “Luxuries once enjoyed becomes a necessity” holds much truth. Reality may hit your children when they start working and realize that their starting salary may not fully support the lifestyle and luxuries that they have become accustomed to. This will still be alright if you are there to guide them along through their young adult years, until they mature and are able to handle their own family demands and finances. If not, the risk of overspending is real.

The worry remains if both parents should pass on while the children are still young. Considering the type of financial planning that we would have helped you with, each of your children will likely end up with at least a million dollars at the age of 21 in the event both you and your spouse are not around. Objectively, 21 years may be too early an age to handle that kind of money. There are simply too many temptations – whether to overspend, or simply a lack of motivation to work hard and earn your own keep. And many times, it is not our children who are the root of the risk. Friends and people around them are frequently the tempters as well. Friendship and the desire to please others may cause them to make unwise financial decisions. As a suggestion, 35 years or older may be a more appropriate age for when they come into money. This is so

that they have hopefully gone through the rigours of hard work, appreciate the value of money and be in a position to manage it better.

The next time you review your plans, do take this into consideration. Will your child be able to handle a million dollars at 21? If not, your estate plan should be reviewed and fine-tuned to what you think may be more appropriate, as well as taking into account each of your children’s nature and characteristics. And naturally, this should be reviewed and further fine-tuned as time passes and you and your family grow into different phases of life.

If you may be leaving a more substantial figure to them, a more formal trust structure to manage, protect and eventually distribute the assets out to them may be an alternative option. Such a structure allows you to go into greater details such as monthly allowance, education guidelines, providing wedding gifts and even provision for grandchildren.

Regardless of the structure or conditions you impose, what is important is for you to think through what should be done for your children. They may not fall into debt, but neither do you want the situation where their inheritance is quickly dwindled away.

15

a Be c o s Yo u as k e D bBy Providend Investment Team

Question:I understand Providend’s investment strategy, and how individual funds are evaluated. I would like to know what the strategy is in choosing the mix of funds to be used in the portfolio – what parameters are used to gauge if they are performing on track? In addition, if the selected funds fail to deliver as expected, what does Providend do?- Mr. Ong, Client

Answer:Thank you for giving us this opportunity to share our process with you. As the process is rather detailed and lengthy, we will be giving you a broad idea of what goes on behind the scenes.

In selecting the funds to be used, there are three things that we consider.

Quantitative analysis: We have an in-house ranking system that evaluates funds on their performance. These criteria include returns, expense ratio (costs) and information ratio (risk-adjusted ability to deliver returns).

Qualitative analysis: Numbers do not tell the whole story. This analysis takes us through the investment philosophy, methodology, and other processes. Fund literature and face-to-face meetings are used to get the information we need.

Portfolio analysis: In this process, we check the impact of the fund on the portfolio’s risk-return characteristics. Through this, we ensure that the fund’s inclusion will be in line with our asset allocation strategy, and not breach any risk management limits.

To make sure the selected funds perform as expected, we monitor them on various levels.

Monthly monitoring: The funds are monitored monthly for performance, asset allocation, cash holdings, and investment views. Any issue that is flagged out as a cause for concern is investigated, after which the appropriate action is taken.

16

Semi-annual monitoring: Every 6 months, we put the funds through our in-house fund ranking system to see how they have performed against their peers. Note that the criterion used depends on whether the fund is meant for an alpha or beta strategy portfolio.

Annual review: Each year, we schedule a meeting with the fund managers to re-evaluate the fund and ensure that they are sticking to their mandates. These sessions also allow us to keep abreast with any changes in the fund/fund house.

If the fund fails to perform, we determine if the fund’s underperformance is due to the asset class’ performance, or if it is due to fund-specific reasons. Our main aim is to check for any deviation in the investment policy, the presence of significant style drift, or if any major errors were made. If the manager is still on track with his processes, the underperformance is likely to be temporal.

As an example, Templeton Asian Growth fund performed badly in 2008 and fell to the bottom quartile in its peer group. Through meetings with the fund managers, we were assured that they had not strayed from their selection philosophy nor made any significant error. We also determined that there was a good likelihood for the fund to outperform its peers if the Asian equity markets recovered. We thus decided to hold on to the fund. In 2009, Asian equity markets rebounded strongly, which saw the fund outperforming its peers and ending back up in the top quartile of its peer group.

17

Question: Is this the best time to consider refinancing?

Answer:The only loan that will almost never change is the HDB Concessionary Loan. Property owners taking bank loans will be subjected to different interest rates, based on the prevailing interest rate environment and structure of the loan package. As and when the current interest rate you are paying is higher than what is available in the market, it is always advisable to explore refinancing in order to bring down the total interest cost.

For property owners, especially those who bought their properties in 2007, this will be an ideal time to consider refinancing your bank loan. Here’s why:

1. The Interbank rates have dropped from 3.5% in 2006, to 0.67% and have remained flat since early-2009. As a result, banks have better access to liquidity and have reduced their lending rates in order to stay competitive.

2. In the past 2 years when property prices fell, valuers were not able to match the loan valuation. This resulted in property owners who took a large loan quantum (>75%) to be stuck with their loan package as other banks were not willing to lend the amount they need to refinance. Property prices are now close to 2007 levels, allowing valuations to be matched more easily than at the beginning of the financial crisis. This presents an opportunity for property owners who bought at high prices then to explore refinancing.

a Be c o s Yo u as k e D bBy Loh Chiu WengMortgage Specialist

18

3. A higher valuation will also mean gearing opportunities for those who want to utilize the extra funds for other purposes, such as business capital.

Some banks have released attractive fixed-rate packages over the past year, and those who refinanced to these packages may end up paying a slight premium of 0.4% above those who held on to floating-rate packages.

However, prudence plays a big role in financial planning. Interest rates have been low since end-2008, matching the low in 2003, and we think there is a very low probability of it going down further. Locking in a low interest rate (≈ 2%) will help to hedge against rising interest rates, and provide more stability in family budgeting.

That said, there are many other factors to consider in finding the right loan package, and the part it plays in your overall financial plan. An unsuitable loan package can have negative implications. For example, if you opted for a loan package that has a lock-in period of 3 years when your intention is to sell your property within the next 2 years. In this situation, you will most likely be penalised by having to pay 1.5% of the outstanding loan to the bank.

We would recommend that a proper analysis of your requirements be conducted to determine if refinancing your existing mortgage loan works in your favor.

To find out more about our mortgage advisory service, kindly contact your lead consultant.

19

It is Day 2 of your much-awaited free-&-easy family vacation to London – and already your teenage daughter is pouting, your energetic 11-year-old son is practically bouncing off the hotel walls and your wife is looking at you incredulously for suggesting just going with the flow for the day’s itinerary. Both she and your daughter are not talking to each other either.

You wonder what went wrong.

It is known that good communication is the key to building good relationships. Making sure that your message gets to another person the way you intended sounds simple enough, but it is often an intricate process that requires much understanding of your receivers to begin with. Within a family or group of people, it gets even more complex due to the uniqueness of each individual.

The brain-based Emergenetics tool can help decipher why someone thinks and behaves the way they do. It can help you make sense of what your daughter is thinking, why your wife insists on making a plan for each day’s itinerary, and why your son keeps asking ‘why’.

Furthermore, researchers at the

a Fa m i l Y ha p p e n i n g s bThe Relational Brain

By Audra Lim, Certified Emergenetics AssociateIn conjuction with Emergenetics Asia

University of California, Berkeley, have also found that kindness is naturally found in the brain. Human beings are born with the capacity to do good, even in the midst of an increasingly fast-paced and indifferent world. (Science Daily, 9 December 2009)

How does this translate into building good relationships? Kindness and gratitude go a long way in fostering good feelings and deepening the bonds of kinship and friendship. Couple them with knowledge about the other’s thinking and behavioural preferences, and you would have a recipe for success in strengthening ties.

With the brain as such a vital partner in developing good relationships, here are some tips on how to harness the power of all that grey matter using the Emergenetics approach*.

If the other has an Analytical preference: you should limit small talk, offer alternatives to analyse and choose from, establish facts and focus on solving the problem at hand.

If the other has a Structural preference: you should give details, be systematic and prepared, stay on the point and suggest next steps.

20

If the other has Social preference : you should be sensitive to their needs, listen well, focus on the person, not the problem, and be empathic.

If the other has Conceptual preference: you should allow him/her to digress, offer the big picture and skip details, use metaphors and imagination, and brainstorm.

… and that’s just the thinking attributes. To be even more successful, be aware of their behaviours as well:

Regarding Expressiveness, watch the amount of energy you use in verbal and non-verbal communication (are you dramatic or subtle?).

About emergenetics

Emergenetics is a specialist in organisational development and human capital development. We provide innovative, results-oriented organisational solutions specialising in analysing, identifying and leveraging the way people think and behave. The Emergenetics® Profile was developed by Dr Geil Browning, Ph.D and Dr Wendall Williams, Ph.D based on scientific research which shows that how people think and behave is a blend of our genetics and life experiences.

(*Editor’s Note: visit www.emergenetics.com for more information on the Emergenetics profiling tool)

Regarding Assertiveness, watch the amount of energy you use in stating your opinions (are you gentle or forceful?).

Regarding Flexibility, be willing to accommodate the thoughts and actions of others, unless you choose to dig in your heels about something.

*Source: Browning, G. PhD (2006) Emergenetics: Tap Into The New Science of Success. New York: HarperCollins Publishers.

When in doubt, mirror their levels of expressiveness and assertiveness and you should be safe. Happy relationship-building – and hopefully the next holiday is a blissful one.

21

a Fa m i l Y ha p p e n i n g s bHow I Pursued my Passion

By Phua Boon Wah, Client Service Manager

Never judge a book by its cover - that’s one thing I learnt from my friendship with Boon Wah, our recently confirmed Cli-ent Service Manager. When Boon Wah first stepped into the Providend office, he looked everything like a soft spoken and introverted gentleman. So, it was such a surprise when he shared with me that prior to joining Providend, he took a 2 year break from work to pursue his passion in diving and un-derwater photography! Read more about his passion as Cof-feebreak invites Boon Wah to introduce himself to the larger family of Providend.

My last full time employment was with Credit Suisse as an Assistant Relationship Manager. I assisted the relationship manager in managing and attending to clients’ banking and investment needs. After 4 years with the bank, in June 2007, I decided to take a

2 years hiatus from work to pursue my interests in scuba diving and underwater photography.

It is an activity I never thought I would be able to participate in due to the high cost. It started when I worked in an adventure shop offering trekking and diving services. The free diving courses offered to me as an employee certainly helped in making my entry into the sports easier.

Scuba diving is the closest to feeling weightless without having to fly to the moon or pay top dollar for zero gravity flights. Somersaults, double or triple back flips are now possible in the water without having to risk breaking your neck.

Needless to say, my numerous attempts to swim like a dolphin ended up looking like a crawling worm; hardly coming close to the grace and speed we have come to associate dolphins with.

When God said,” Let the water teem with living creatures”. The magnitude of such

22

simple words is beyond what we can quantify even with today’s technology. New species are still being discovered and new areas are being explored. Just to dive the 17,000 plus islands of neighboring Indonesia would possibly need more than a lifetime.

With at least 70% of the Earth’s surface covered by the sea, in this large mass of habitat, it is astonishing to know that a seahorse no bigger than 2.4 cm exists. First discovered in a lab in 1969, pygmy seahorses have graced many covers of diving magazines. Its adorable appeal lies in its short snout which gives Julia Roberts’ lips a run for her money. It is a challenge to find and even when it is found, it still requires a certain effort to have a good look. If a diver is able to locate a pygmy seahorse without the help of dive guides, he has earned bragging rights at the dinner table.

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime”. This quote is rather fitting to describe the anglerfish, or frogfish as it is more commonly known. In this instance, the anglerfish does not need to be taught how to fish.

The anglerfish has a dorsal spine that protrudes above the fish’s eye acting like a fishing rod. The tip of the spine has a fleshy growth which resembles bait. Whenever the fish is hungry, she just has to wriggle the “bait” and lure unsuspecting fish close enough to be swallowed whole. Although the anglerfish is not as adorable as the pygmy seahorse (some even consider it ugly), but to me it is so ugly that it is adorable.

Mention the word “shark” and it will bring up an erroneous image to most. NO THANKS!!! Not even to Hollywood. Thus, it is not surprising to see streaks of fear

23

when the name “whale shark” is mentioned to those who have not heard of it. Ironic as it is, the diet of the biggest fish in the ocean is the tiniest. Whale sharks feed on plankton which are microscopic organisms. The largest recorded size of a whale shark is 12.65 metres, slightly longer than your SBS bus. Shark’s fin soup lovers, I know what you are thinking.

Sharks are no pets but they are certainly not mindless killing machines. They serve an important role in the ocean by weeding out the sick and weak. Being an ordinary diver, I am unable to echo any scientific justifications against shark’s fin soup, but I can imagine the consequences if no one takes out the garbage.

Scuba diving has allowed me to widen my social circle and brought me to places I doubted I would visit. What appeals most to me is the opportunity to be up close and personal with the richness of life in the rainbow seas.

Now that I am back to the realities of Singapore life, I am very blessed to be given the opportunity to work in Providend. I can identify with the level of passion that Providend has in delivering honest, independent and competent advice because of the love that I have for the seas. It is motivating to be part of the Family that is driven by conviction and not remuneration. I am glad to call Providend home.

Boon Wah joins the client service team as Client Service Manager (CSM) and supports Eleanor Ng in all client related matters. He can be contacted at 6309-2477 or Boonwah_Phua@providend.com.

24

It was the 23rd of December, and the Christmas spirit was in full swing all over Singapore. Here in our lovely home that is Providend, it was no different. The decorations were up, the Christmas tree blinked merrily, and jazz-infused carols played.

While the day seemed to begin like any other day, by mid-afternoon the place began to buzz. People were bustling about the kitchen area, and in no time the dining table was overflowing with a delicious feast just waiting to be devoured. Soon after, the projector and screen took their places. Yes, the celebration was ready to begin.

Correction: The fiesta was ready to begin. True to tradition, this year’s Christmas party had a theme - and this time we were transported to Mexico. If the nachos and

a Fa m i l Y ha p p e n i n g s bChristmas Party 2009

By Nerissa Xue

25

guacamole on the dining table weren’t proof enough, the star-shaped piñata that hung from the ceiling had to be.

To remind ourselves about the meaning of Christmas, the party began with the story of Jesus’ birth. The twist: we paused for mini-games. We were divided into four groups for a friendly competition, to bring the family even closer. Yes, Christmas is about family. After all, when Jesus was born, so was the Holy Family. In fact, some of us brought our family members along to join in the fun.

What happened to the Mexican theme? Right, the piñata. Blindfolded, the elected “hitters” took turns to have a go at breaking the piñata, relying on their teammates to guide them towards it. When the piñata was finally broken (it was harder than it looked), there was a mad rush for the sweets that were kept inside. The team with the most points won, but nobody remembers that of course.

Next, James led us in Christmas carols, and Evelyn shared her thoughts on hope for the future, once again paying homage to the bringer of hope who was born on Christmas day, Jesus. And as the warm, fuzzy feeling filled our hearts, we remember to be thankful for our blessings, and that we can place our trust in Him in our times of need.

26

Finally, the Christmas feast was unveiled and up for grabs. We ate and talked and filled our bellies to the brim. True to tradition again, there was too much food to be finished.

As the leftovers sat on the table, we proceeded to play the game called “Christmas Gift Exchange”. A seemingly harmless name, but an extremely ruthless game. We drew lots to settle the order in which we picked our gift. After that came another round, where we had the opportunity to “steal” someone else’s gift and that person had to hand it over without protest. No hard feelings right? Right.

It was a wonderful night of good food, good cheer and good friends, and though the party was over, we brought away with us the Christmas warmth to spread to all those around us.

27

They say the apple never falls far from the tree, but in my case I think I must have hit a rock and bounced. At least when it comes time for spring cleaning.

Before I could even remember, pre-Chinese New Year activities would mean that my mum would clean everything: walls, ceilings, windows, floors, change cushion and bed linen, rearrange furniture, and empty, scrub and re-stock

cupboards. And when that was done, she would take down all the Christmas decorations which included our three Christmas trees, Christmas socks, wreaths, keep our Christmas chinaware, and then, she will hang up our Chinese New Year decoration.

My spring cleaning chore list is considerably shorter: I pack my study table (reluctantly of course).

Okay, I’m exaggerating. But not much.

I thought I could escape spring cleaning for the rest of my life, so I did a quick Wiki search. It turns out that spring cleaning did not just originate with the Chinese but is a tradition that dates back thousands of years ago and can be found in most countries’ traditions! What?! Spring cleaning was first recorded in the Persian Calendar, and fell on the first day of spring (hence the name) as the warmer weather meant that the whole house could be aired, clothes could be washed and hung dry, and the house scrubbed clean. I almost ran out of excuses.

Hey, but today’s world is quite different! Most of us have ready access throughout the year to washing machines and dryers, vacuum cleaners, and not forgetting the faithful

a Fa m i l Y ha p p e n i n g s bSpring Cleaning for the New Year

By Cherie Kiew

28

domestic helper. So, I just don’t get it when I have to do spring cleaning. Honestly, is there a need to wash the house from top to bottom, drag out all my clothes and repack them, and scrub the floor thoroughly?

now, when the news came that Providend was going to have a Spring Cleaning, I almost flipped. What irony. I don’t even do Spring Cleaning at home, and I had to do it here?

30 December 2009 - the assigned day. Each of us were given an area of responsibility; wash the toilets, repack the kitchen cupboards, clean the windows, disinfect the kids area, throw out unused stuff in the storeroom. With Sylvia as Mother Hen, we diligently cleaned our allocated areas for 4 straight hours, then another 2 hours to clear our desk. 6 hours of cleaning was very tiring, and for some, they suffered back aches throughout their New Year break. But I have to say that all in all it turned out to be good fun and good fellowship.

Frankly, I saw the benefits of spring cleaning when I stepped into the office on the first work day of 2010. The entire office smelled fresh and clean, the carpets washed, the floors and corners of the rooms scrubbed clean, the kids area inviting, the office bright and cheery, and best of all my table was spotless and clutter-free. My good efforts in cleaning my work space proved effective to throw out the unwanted, and unnecessary distractions and prepared me for work in the New Year.

Have I become a spring cleaning convert? Well, I’ll just say this, you know how some people say that you become just like your mum when you have kids? Perhaps, when I own my own house and when my daughter’s room resembles a pig sty (like what my mum calls my room), I might just become as fanatical as my mum! (But honestly, I don’t think I could ever be like Mum. Haha!)

Dear clients, we invite you to come by our office and see what a difference one spring cleaning can make. As a family serving families, we treasure the opportunity to catch up with you, so just pop by anytime for coffee, to try out one of our famous home-baked cookies, or just have a chat with your consultant or any one of us at Providend.

29

g pr o v i D e n D i n T h e ne W s h“The Importance of Staying Invested”

By Christopher Tan, CEO of ProvidendThe Business Times Weekend

The last 12 months was a humbling process for all in the investment advisory and management business. When the markets came tumbling down, most didn’t see the storm coming. When everyone predicted it to last for a long time, the financial markets recovered just 6 months later. During the depth of the crisis, many “experts” appeared and slammed the buy-and hold strategy, advising investors to move to cash and wait for the right time to enter. Many who exited are still sitting on cash today. Staying invested now seems to be a better idea. Those who suggested timing the markets seem to have disappeared overnight. Of course, there are a few who successfully exited and re-entered the markets again. But how many times can they be so lucky? For we all know that no one can be right most of the time. It remains to be seen what their investment results will be in the next 10 years by guessing the best time to invest. But going by history and plenty of research, I am not the least hopeful.

Having spent more than a decade in financial planning and wealth management across 3 crises (Asian Financial Crisis, Tech Bubble and the current crisis), I have concluded that the key to successful investing for most of us is to stay invested and keep investing. Using time to ride through the volatility and using the average long term returns of the market to get compounded returns is the best way to reach our goals. But investors find it hard to believe that it is really so simple. We prefer to believe that there must be someone really smart out there who has a crystal ball, and can tell the future with great accuracy. Hopefully, the last 12 months has shown us that this is a fallacy.

Although the idea of staying invested and keep investing is simple, it is really difficult to execute. I know it sounds oxymoronic, but let me explain. You need the 3 S’s to be present: (1) Sufficiency mindset (2) Strong financial foundation and (3) Strong adviser

Sufficiency MindsetWhen I asked most investors why they are investing, most would give me a strange look and answer: “to maximize the returns of my money of course!” This is exactly the mindset that will cause you to time the market, to try and beat it so that you can

30

get maximum returns. Sufficiency is the opposite of greed. We should invest for the returns we need so that when the time comes for us to use the money, like retirement or funding our kids’ education, we have enough. Understanding this helps us not be greedy and take unnecessary risk, but instead stay invested and keep investing. This is because, all we need is the average long term returns of the market, which more than a century of history has shown us that it is always there regardless of any crises. But it is difficult to achieve this mindset because of the sin of greed that is inherent in us.

Strong Financial FoundationIf we have enough rainy day funds to tide us through an emergency, if we are not overly in debt, if we are good in our work and earn a reasonably good income, if we keep our expenses low and are able to save 10% to 20% each month, if we are not investing all our money away, if our insurance is well done up to protect us against all life risks, if we are physically healthy, if we have quite a long while before we need the money we invested, the ups and downs of the market mean nothing to us. We will be able to stay invested because our foundation is strong. The problem with most investors is that we don’t spend time doing a thorough financial audit but jumped right in and out of the market because someone invoked our greed or fear about an upcoming trend or financial holocaust that his “crystal ball” is telling him about.

Strong AdviserAs an investor, we need an adviser that is experienced and competent to instill that sufficiency mindset, helps us know what we really need and assesses our financial foundation. He will then put together a suitable investment portfolio that will deliver the returns we need over the long term but yet not go up and down beyond what we are psychologically and financially comfortable with. This is so that we can stay invested and not bail out halfway, because we feel like vomiting! He must have the moral courage to stay and hold on to us throughout the entire investment ride. Unfortunately, over the last 12 months, I have come to know of many advisers who switched to selling properties, land banking products and insurances because “this is a bad time to be selling investments”. They bailed out before the clients do!

I find having a strong adviser the most important of the three but yet the hardest to achieve. Over the past months, we have been looking for advisers who are competent and passionate to do good work, to grow our team. Candidates will come and say how passionate they are in providing good advice to clients but when they realized that they couldn’t make big bucks fast in a firm that doesn’t take commissions, they find a nice way to exit from the interview. That is how much passion costs! People must realize that if you truly want to do good financial advisory work for the client,

31

you cannot make big bucks fast unless you take big fat commissions and incentives at the expense of the clients. You will only make a comfortable income after some years when you have proven yourself to be competent and can retain the trust of your clients. But I guess, not many have that patience to wait. So it was an uphill task for us, especially when the banks are recruiting again.

The markets have generally risen over the past 10 months. Gauging by the crazy prices of properties in Singapore, everyone seems to be bullish again. But please do not let what we have gone through in the last 12 months go to waste. Be equipped with the 3 S’s before we jump onto the investment bandwagon again.

32

g pr o v i D e n D i n T h e ne W s hMedia Exposure

December 2009 - January 2010

PRInT

(1) Hong Leong Finance Home LoansLoh Chiu Weng, ConsultantBerita Harian 19 December 2009

When approached for comment on Hong Leong Finance’s latest loan package for HDB properties released on 18 December 2009, Chiu Weng opined that, despite the slight premium, home owners are likely to prefer the 2-year fixed rate of 1.63% over the 1.33% variable rate, as it helps in their budgeting. However, he noted that savings from lower interest rates will not be significant given the relatively smaller HDB loans and may therefore not be attractive enough for HDB owners who have re-financed their bank loans in the past 2 years.

(2) What asset class to invest in 2010?Mudit Goenka, Investment SpecialistBerita Harian, 4 January 2010

The world has stepped into 2010, a year on after the global financial crisis followed Lehman Brothers’ collapse. While investors regain optimism for the new year in light of the recovering economy, there is still uncertainty about the best investment choices to make this year. This article approached various investment experts for their views. Mudit shared that caution should be exercised with respect to the financial sector as it has yet to pull through the recession. He also commented on the need to be wary of government bonds and on his preference for developed equities vis-à-vis emerging equities. Read on for an overall view of experts’ take on the different asset classes.

(3) Hong Leong Finance Fixed Deposit RatesLoh Chiu Weng, ConsultantBerita Harian, 12 January 2010

Hong Leong Finance recently announced its new fixed deposit rates in conjunction with the Lunar New Year. The rates are relatively higher than others in the market, possibly because Hong Leong intends to take advantage of the festive season to

33

increase its deposit base, Chiu Weng suggested. Property transactions commonly increase after Lunar New Year, which would in turn increase borrowing.

(4) Balancing Risk and RewardChristopher Tan, Chief Executive OfficerThe Sunday Times, 24 January 2010

One may be eager to reap high returns on investments, but it is important to assess one’s need and ability to take risk before investing. This article elaborated on the three important factors that must be determined before investing: willingness, need, and ability to take risk. Chris explained that these factors need to be aligned before choosing a suitable investment portfolio that gives the required returns at a level of volatility that the investor can withstand. When clients’ appetite for returns exceeds the amount of risk they can afford to take, advisers still have to guide them towards a more suitable portfolio. Chris stresses: “We are a fiduciary, we advise clients and sometimes that means going against what they want”.

(4) The Importance of Staying InvestedChristopher Tan, Chief Executive OfficerThe Business Times, 30 January 2010

When the market was down, many investors quickly pulled out to cut their losses, hoping to re-enter when it picks up. Some have been successful, while others were not so lucky. In his latest full-article contribution to the Business Times, Chris dicusses the merits of staying invested as the key to handling volatility and investing successfully. He then outlines the three ingredients to staying invested, or the 3 S’s: a sufficiency mindset, strong financial foundation, and a strong adviser. Read the full article to know more.

TV

(1) Channel newsAsia Business Tonight InterviewDaryl Liew, Executive Director & Chief Investment StrategistChannel NewsAsia, 22 December 2009

In the first 11 months of 2009, an incredible one third of all new global listings went public in Shenzhen and Hong Kong. Daryl commented on the likely reasons for this trend, citing a robust consumer market and more favourable PE ratios in Hong Kong and China compared to Singapore. The interview also addressed the apparent fatigue that is beginning to show in the market, to which Daryl explained may be due to insufficient liquidity to absorb new IPOs.

34

(2) Channel newsAsia Business Tonight InterviewChristopher Tan, Chief Executive OfficerChannel NewsAsia, 23 December 2009

2009 saw several cases of senior executives abusing their power to misuse company assets, leading to the tightening up of corporate governance measures for SGX listed companies. Investors learnt to be careful when investing in companies from countries with lower corporate governance frameworks, and to practise due diligence on the legitimacy of reported numbers. In light of the seeming lack of investment savvy, Chris stressed the importance of knowing that investment is a long-term venture, and that it should be motivated not by returns, but by the need and ability to take risk. He added that investors should not dabble in financial instruments they do not understand well. Finally Chris evaluated the risks in the market environment, advising a cautious outlook moving forward.

(3) Channel u Money Week InterviewChristopher Tan, Chief Executive OfficerChannel U, 29 January 2009

This week, Money Week explored how various sectors will fare in light of the coming Chinese New Year festive period. Chris gave his views on how the markets will fare going forward.

* If you’d like to have any of the articles, radio clip or interview video, simply drop us an email at coffeebreak@providend.com

35

We are Hiring!

As Singapore’s sole fee-only independent financial advisory company, we are passionate about providing the most honest, independent and competent financial advice to our clients. We are currently growing our team of Wealth Management Consultants. If you know of anyone who shares the same passion, has an academic degree with a Certified Financial Planner or equivalent professional qualification, enjoys working with people and able to communicate well, do us a favor, get us connected.

Send all resumes to hr@providend.com. Thank you.

A n n o u n C e M e n T S

PgP Clients: neW “learning & eduCation” seCtion in PgP Website

As part of our ongoing effort to enhance communications to clients, you will now have access to a library of information through our NEW “Learning & education” section in the PGP website. Here, we explain some of the instruments used, and give you an idea of the things we consider before deciding to invest. Learn more about Equity-Linked Notes (ELNs), Exchange-Traded Funds (ETFs) and Futures in this section. We invite you to visit the PGP website regularly to receive the latest updates http://www.providend.com/pgportfolios/index.php

36

ever Wanted a Better understanding of Financial Planning?

Introducing Providend Centre of Financial Education...

Providend began as a private wealth management firm, offering fee-only advice to the high-end affluent and High-Net-Worth. However, our founders, who came from humble beginnings, saw the need to provide honest, independent and competent advice to everyone - people at all life stages and from all walks of life.

The vision was to empower individuals with right and practical financial knowledge so that they are motivated to take action towards their financial well-being. After all, money may not be the most important aspect of life, but it is a reality and the lack of it creates problems.

PCFE was birthed in partnership with Providend to fulfill this vision.

about PCFe

Providend Centre of Financial Education (PCFE) brings empowering financial knowledge to people of all life stages and all walks of life. We specialise in topics ranging from money management, risk management, accumulation for retirement goals, to wealth preservation and business succession. To meet specific needs, topics are also customised to address the current pertinent issues or concerns of our clients.

Do visit PCFE’s website at www.providend-cfe.com to find out more.

37

Providend’s Mortgage Consultancy Service Mortgage planning is an integral part of financial planning. Proper mortgage planning lowers financing costs, improves cash flow and allows ownership at a much shorter time.

Why Consider Providend’s Mortgage Services?

þ Honest & Independent ApproachAccess to major banks and adopts practices that put your interest first. E.g. we evaluate re-pricing options for existing lenders which may be more beneficial to you than refinancing with other banks (Most mortgage consultants do not offer this as they are not compensated through this approach).

þ Fair & Transparent FeesTypically, fees range from $400 to $1,700 depending on the loan quantum. All mortgage commissions will be rebated to you.

þ Regular Mortgage ReviewsThese are necessary because your needs as well as mortgage rates are never static. Through regular mortgage reviews, better loan arrangements could be highlighted to you.

Do contact our Mortgage Specialist Loh Chiu Weng (chiuweng_loh@providend.com or 6309 2461) or your Lead Consultant to find out more about the services we provide.

We look forward to serving you.

38

A Friends of Providend evening Talk

“Preserving & Building Family Wealth, Succession Planning And

Wealth Transfer Strategies”

In this special presentation by Mr. James Huan, Head of Estate and Legal Succession, you will learn how family members

and their Advisers preserve family wealth for generations.

The “Friends of Providend Evening Talks” are talks that seek to share with our client’s friends and loved ones on critical issues pertaining to financial planning. At this small and cozy dinner session, guests are also invited to discuss financial issues that they are most skeptical or

concerned about, and we will seek to address them.

The upcoming Friends of Providend Evening Talk is on

23 February 2010, Tuesday, 7pm – 9:30pm.

To find out more or RSVP, please contact your Lead Consultant.

a cuppa oF reminDersDisclaimers

The information and opinions provided above are general in nature and prepared from data believed to be reliable. No representation, whether express or implied, is made with respect to the accuracy, completeness or reliability of the information or opinions offered, and we expressly disclaim liability for errors or omissions in such information and materials.

Any opinions or views we offer are not necessarily indicative of future or likely performance of any particular investments. The information provided may contain projections and other statements regarding future events or future financial performance of countries, regions or markets. These statements will necessarily only be predictions and actual events or results may differ. You should make your own assessment of the relevance, accuracy and adequacy of the information contained in the information provided and make such independent investigations as you may consider necessary or appropriate. Any opinion or views offered is made on a general basis and is not to be relied on as advice. Accordingly, neither we nor any of our associates, directors, connected parties and/or employees accept any liability whatsoever for any loss, whether direct or indirect, that may arise from the use of information or opinions provided. The information and opinions provided are not to be considered as an offer to sell or a solicitation of an offer to purchase any investments. Please note that investments are subject to risks, including the possible loss of the principal amount invested. Past performance of any investments is not indicative of its future performance.

Providend LtdCompany Registration No: 200209049C

37 Duxton Hill Singapore 089615Copyright © Providend Ltd 2006- All rights reserved.

See you latte!