The Ultimate Guide to Investing for Your Child/Dependent on FSMOne

Never miss an idea! Stay updated with the latest investment news and insights! Join our Telegram channel here and follow us on Instagram here!

---

As the saying goes: "There is no better feeling in the world than the joy of having children and watching them grow and thrive." As a father myself, we often strive to give the very best to our children even if it means sacrificing some of our own desires. It also never gets any easier as parents have different things to worry about at different stages of our children’s lives.

During their infant years, we worry about them falling ill or lacking the proper nutrition in the food we feed them.  When they enter school, we become concerned on the friends they make and the people they hang out with. Amid it all, we still must ensure they have enough pocket money to spend and possibly, a financial head-start when they enter adulthood so that they will not have to struggle and survive from paycheque to paycheque.

1st Step: Open Beneficiary Account

While we find ways to invest for their future, we also must make sure the money goes to them in the event of any unforeseen circumstances. The very first step to achieving this desired outcome would be to open a beneficiary account with your child/dependent as the beneficiary. Opening a beneficiary account for your child/dependent ensures that he/she will be the beneficial owner of the assets in the account in case of your untimely demise.

In the event of the account holder’s death, the beneficiary can visit FSMOne’s office with his proof of identity and the account holder’s death certificate for us to process the transfer of assets to the beneficiary. The beneficiary account is also different from a traditional joint bank account where both parties have access to the assets. You will be the only one maintaining full individual control of the account while you are still alive.

When placing an investment order on FSMOne, you will be able to select the different account (personal or beneficiary) you wish to transact with. There will also be a separate account number which you can transfer funds directly into.

2nd Step: Initiate ETF/Unit Trust RSP

Your second step is to plan for your child’s/dependent’s long-term future by taking advantage of FSMOne’s 0% processing fee for ETF Regular Savings Plan (RSP) or 0% sales charge for Unit Trust RSP.

For parents who are new to investing, the ETF Focus List and FSMOne Recommended Funds List can serve as a starting point to identify suitable investment ideas.

3rd Step: Fund the Beneficiary Account

After you have initiated the RSP program for long term growth, the third step would be to fund the cash account for RSP deduction. You can elect to make a lump sum deposit into the cash account or set up a recurring top up plan from your bank account:

By transferring monies into FSMOne into either FSM Cash Account or FSM Auto-Sweep Account, the monies received will continue to earn attractive yield prior to investing.

4th Step: Sit back, relax and know everything is in good order

Once you have set up the RSPs and automated the fund transfers into your FSMOne account, the fourth step is simply to sit back, relax and know that everything is in good order. As RSPs allow you to invest through dollar cost averaging, you need not worry about timing the market as it can be notoriously difficult even for professional investors. Investing via RSPs also instills a disciplined approach to investing, which helps avoid making impulsive decisions based on emotional reactions to market swings.

5th Step: Purchase iFAST Digital Term (Optional)

If you commit to a long-term investment plan through ETF RSP, the cost savings and market performance should enable you to ride out economic cycles and leave behind a substantial legacy for your child. However, there is always uncertainties in life, and some may not live long enough to contribute to the RSP all the way until retirement. As such, the fifth step would be to insure yourself with a term plan like the iFAST Digital Term. The iFAST Digital Term is a group term life policy that is renewed annually based on your attained age. With almost every kiasu parent insuring themselves with high payouts to their children, there is sentiment that children without such inheritance might lose out in the future. Hence, to have an affordable term plan that covers you till age 70 for $1,000,000 checks a lot of boxes, especially for parents. Moreover, FSMOne offers commission rebates on insurance plans signed up through us.

6th Step: Plan legacy with iFAST Global Trust (Optional)

The sixth step would resonate with clients who have substantial assets outside of FSMOne. Even if you have invested through the beneficiary account, the arrangement does not extend to assets outside of FSMOne. Hence, this is where estate planning becomes vital, especially for those with substantial assets. iFAST has recently launched its estate planning and will services division – iFAST Global Trust. The thought of planning for life after your own can sometimes feel morbid but it is necessary to make sure that your loved ones are taken care of financially.

Here's a quick recap of the six steps:

Investing for your children is a crucial step in securing their future and fostering financial independence. By starting early, setting clear goals, and utilizing tools like the beneficiary account, RSP, and iFAST Digital Term, parents can provide a strong foundation. Teaching children about money management and involving them in the planning process also instills valuable financial habits. Ultimately, thoughtful financial planning ensures that children are well-prepared to face future expenses, such as education, housing, or emergencies, while promoting long-term financial stability and success.

Need Investment Advice?

Need more investing guidance? Reach out to us at advisory@fundsupermart.com or call us at +65 6557 2853 or make an appointment to visit our new office at Singapore Land Tower, Level 36, where you can receive investment advice and recommendations from our friendly, professional, and non-commission-based investment advisory team.