Reason #1: Singapore financial advisors are COMMISSION-based…
My encounter with Singapore financial advisors
When I was younger, I have been approached by many bad Singapore financial advisors. They were desperate to sell me savings plans. “How much do you save per month?” “Which bank do you save with?” Do these questions sound familiar?
These Singapore financial advisors approached me across the island.
When I was just minding my own business in school, they gave me a cold-call. Once I exited the MRT Stations, they approached me. Another time I was out shopping with my loved ones, they approached me. They were everywhere, actively looking to make their next sale.
Don’t you just hate it when these salespeople want to sell you a product so badly to drive commissions into their pocket? Comment below if you’ve ever been approached by them.
Pushing products instead of quality financial advice
Furthermore, I noticed that these Singapore financial advisors were pushing products instead of understanding my financial situation. They were not providing quality financial advice. Consequently, I noticed that every one of them was pushing me an endowment plan. Clearly, there were so many better alternative instruments out there that suited my financial situation back then, but I was not financially literate back then.
In addition, I became tired of how these Singapore financial advisors were operating at such a biased and sales-driven manner. They were hungry for their commissions. These Singapore financial advisors did not understand my financial problems at all.
Don’t believe me? Read this table below.
The above table is an extract taken from the mystery shopping exercise conducted by the Monetary Authority of Singapore (MAS) in 2012. This is the latest statistics of mystery shopping exercise being released by MAS.
A mystery shopping exercise is when MAS hires external officers to pretend to be customers so as to determine whether financial advisors have acted in the best interests of their clients. The above table has shown that only 28% of the products that these financial advisors recommend are deemed SUITABLE, while potentially 70% of the products recommended could be UNSUITABLE for clients.
Poor financial advice results in you suffering in the long run
As a result, there is a chance that you have been mis-sold a product by a financial advisor that you’ve encountered in your life.
Hence, the first reason why you might be OVERPAYING for your financial plans is that it is likely advisors offered you the product that earns them the highest commission. Chances are, the policy premiums are higher and policy duration is longer because these products give them the highest commission.
REASON #2 Your financial advisor is merely a trained salesperson…
Salespeople, not financial advisors
Understand this, the friend that you saw on social media recently turned into an insurance agent because they saw some other agent earning lots of money in the industry and aspire to be like them. All these “financial advisors” that you see at roadshows are approaching you with the intention to sell you the products that their managers have taught them to sell.
Chances are, these “financial advisors” that joined the industry were attracted to this industry because they’ve seen how their managers drive flashy Lamborghinis, owned luxury Rolex watches and flew off in Business Class to the latest sales convention in Hawaii.
Without being fully equipped with the knowledge in managing your financial portfolio, they are merely peddling on products that they were taught to sell. That is because their managers became rich and successful in selling those few products, by constantly grinding through roadshows or making cold calls.
Therefore, they recruited agents under them and taught their underlings to do the same, hoping that their underlings can achieve the same success as they did.
Financial advisors that lack financial knowledge
How do I know this? Because I’ve met tons and tons of “financial advisors” in my life, and 9 out of 10 “financial advisors” don’t even know what on earth are the alternative instruments for wealth accumulation besides those savings plans they were taught to sell.
Therefore, they are likely not financial advisors, but product-peddling salesmen. Now, don’t get me wrong, there are definitely some ethical and properly qualified financial advisors out there. I’m just saying that there is a high chance they lack the knowledge and capacity to be one.
Thus, commission-based financial advisors function more like salespeople than an actual financial advisor that understands all the available instruments available in the market. With the above picture in mind, what do you think are the chances that you are overpaying for your insurance/investment/savings portfolio? Comment below.
REASON #3 The moral hazard that financial advisors face …
Imagine doctors earning through commissions
Picture this, you are visiting a doctor because you have a fever. The doctor does not charge you a consultation fee. He only earns his keep through selling you the medicine that he prescribes. The more medicine the doctor sells, the more income the doctor will receive.
The volume of sales of medicine determines his salary. Will you trust to consult a doctor like that? Will you even consume the medicine this doctor prescribes?
That is exactly what is happening in the financial services industry right now. You, as a client, are visiting the financial advisor, because you want to solve your financial problems. However, the financial advisor can only receive his paycheck through selling you products.
Conflict of interests between client and advisor
Let’s face it. Nobody works for free in this world. Financial advisors want to make money as much as you do because they need to support their family too.
They are only capable of selling products from the companies they represent because that’s the only way they can earn. Impartial and unbiased financial advice is tough. They can only offer products from their company. Otherwise, they don’t earn a single cent.
To summarise, because of the conflict of interest financial advisors face, they are in a dilemma on whether they should offer you the product that gives them the highest commissions, or giving you appropriate advice. An ethical dilemma. Hence, you are likely overpaying for your insurance/investments/savings policies.
Darn, Jim. You made good points. So what the hell should I do now?
Let me share an occasion where I successfully helped my client through my service. This client was paying $10450 annually for her savings needs, life insurance, and health insurance coverage. She was overpaying for her portfolio. I restructured her portfolio, letting her pay only $4270 annually for the same amount of coverage and yet generating better-guaranteed cash value returns for her portfolio.
Still skeptical? The following testimonials are just from a few of the many satisfied clients that benefited from my service.
You now have two options.
1. Continue to OVERPAY for your financial needs for the rest of your life
2. TAKE ACTION and optimize your financial portfolio now.
My service is not for 97% of Singaporeans. This group of people “support” their friends who are “financial advisors”. Don’t you feel bad for them? They value “supporting” their friends over their self-interests. Ultimately, it only leads to them losing out in the long run.
Thus, if you belong to the 3% who are not “supporting” your friend who is a “financial advisor”, I might be able to help you. I DO NOT charge you a single cent until I’ve helped you save potentially tens of thousands of dollars every year for your financial portfolio.