What can I do that Prudential cannot do?
Recently, I have been asked this question by a friend of mine. “What can you do that Prudential cannot do?” It is not an easy question to answer especially with when the public have preconceived impressions. Let me answer the question here.
Prudential is a huge company. If Prudential is willing, there is certainly very little that they cannot achieve. However, the insurance product provider with an asset management arm, is not interested in several aspects of wealth management business. For insurance companies, the sales force, insurance agents, are not under the companies’ payroll. Therefore, the sales force should not be mistaken for Prudential itself. I will rephrase the question to, “What can I provide that other Insurance Advisers, even other Financial Advisers cannot?”
There are a few areas:
Qualifications
In 2002, the Financial Advisers Act was passed to regulate every individual giving financial advice (insurance, investment and other aspects). One of the aims of the Act is to set good standards for the industry, but in my view it has been detrimental so far.
With minimum requirements being 21 years old and above, ‘O’ levels passes and Singapore citizen or PR, I believe that the entry qualification requirements are too low. I am not discriminating against people of lower academic qualifications. I know many senior Financial Advisers with low academic qualifications but have examplary knowledge and expertise gained through experience. However, I still believe it is a problem. Imagine a society where high school graduates who passes biology are allowed to practice medicine (just as the ones with M.B.B.S. are) and the only differentiation is their reputation, years of experience and number of clients they have treated. Read my views on the shortcomings of the current regulatory framework.
The Act also has an effect of leading the public to think that all Financial Advisers are of such low standards. Truthfully speaking, I am upset on the rare occasions when people confuse me with others of minimum standards. I have a Bachelors in Business Management majoring in Finance and Masters in Wealth Management with good GPA.
Knowledge & Calibre
Experience gained during my employment with Citibank in SME banking, in OCBC Private Bank (now Bank of Singapore) and Citi Private Bank gives me knowledge of how investment advisers and fund managers analyze information and arrive at the advice.
Some Financial Advisers do not even know what is alpha, why a short term money market fund will drop in value or how a structured product bought from a bank works. I have seen many factually wrong information even on www.moneytalk.sg and www.cpf.gov.sg/imsavvy. Some of these celebrity bloggers just have insufficient calibre. Similiarly, like million-dollar-round-table achieving insurance agents and millionaire trading coaches, who advertise their ‘guaranteed profitable strategies’ so often in newspapers, it is a case of who shouts the loudest wins!
Conduct of Business
I am on the client’s side! I go about my profession now acquiring clients, I to not go about trying to sell products. Once I accept a client, we have a relationship. I am forever responsible for the client’s financial situation. I will be handling every aspect of the client’s financial needs, representing them to deal with whichever financial institution necessary, it is immaterial where the product is from. I will go with my client to meet a banker to discuss his investments, banking and loan needs.
I am an Adviser, I am not a salesman. Sadly, I also concede that a salesman definitely earns more than an Adviser. My conversation and dialogue with my clients are measured, based on facts, numbers and probabilities. A good salesman strikes up a conversation with you, make you like him, assess your weak point and exploit it to bring out the emotion of fear, excitement or greed. I do not believe clients should make financial decisions based on emotions, although I know that this will remain so as long as we are human beings.
Many people will tell you, “Oh, I have a Financial Adviser in so-and-so company. In fact, I have a few Advisers.” In reality, this only shows there was a few salesmen who sold them several financial products before. I am aiming to achieve my clients saying this to someone advertising their financial product, “this product sounds good, speak to my Financial Adviser, he will assess it and I’ll get it from you.”
Range of Service
There is a weakness of me in that I am too proud to be in a role going around selling insurance. As I have mentioned earlier, to be my client’s Financial Adviser, I must be equipped with all the knowledge and tools related to financial service. This includes investment management on all instruments, insurance protection (personal and valuable possessions), property loan, will writing, setting up offshore private investment companies and trusts for planning purposes, management of liquidity and crisis.
I view each with equal importance.
In conclusion, I aim to be a Financial Controller of the client, hired by the client to handle his financial situation, regardless of the companies that I need to deal with representing the client.
2 Responses to “What can I do that Prudential cannot do?”
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The disappointment is that despite 80% of the financial advisers being product-driven sales people, there are still many bread winners who are under-insured in Singapore.
Your piece here shouts about you as a salesman nonetheless, selling the equity of your knowledge and unique proposition that you can bring to your clients.
While the minimum requirements for being a financial adviser may seem low, the entry exams however are structured with intent, aimed at equipping each practitioners before they hit the streets.
90% of patients with ailments do not need to visit a specialist. A GP will do for most. In fact, many people do not even visit a GP to get by a common cold. In reality, there is a wide spectrum of needs represented in the marketplace. The beautiful part about being a FA is that you get to choose which segment of the market you want to serve and you position and prepare yourself appropriately for that.
There are many Certified Financial Planners (CFP) accredited people, who are no longer a practicing adviser, after they acquire their accreditation. The basic insurance plan is such a simple and yet powerful product, that an insurance agent should be proud to be carrying. The sad truth is that many FAs are afraid to be associated with being an “insurance agent”.
I would applaud an insurance salesman who managed to convince a family man to take up a $500,000 term insurance and be able to bring this cheque to his widow and children. I would give a standing ovation to the collective insurance sales force in Singapore to be able to to this simple task for all families.
Trust me, the financial security of Singaporeans as a whole would be better established with enough of these “lack of enough knowledge” sales people.
My dear contributor, this is an awesome task that the 0.1% of highly knowledgeable practitioner like yourself in Singapore can never do for Singapore.
Perhaps more than 90% of the population will not understand what you are writing about in your blog. And a good majority of practitioners may not as well – you are right. But any knowledge is useless, unless they are changing lives on the streets, where it matter.
So let’s applaud each and every insurance agents or financial planners, whatever they are called, who is making a sale everyday. Because it is not about the commissions they are making – let the product manufacturers worry about that. What matters is the financial security they are adding to each and every family.
I applaud you too for your effort here. But you might do better as a lecturer or professor if you can’t make more money than a regular insurance salesman, given the knowledge you have.
As someone who spent 4 years in this industry and left for a number of years, I admire your passion and efforts. However I agree with Samuel Koh, and still proud to have been an insurance agent. Unfortunately the financial planning/ wealth management industry is imperfect. As long as people don’t pay for advise, they are not going to get an independent advise. Commission creates bias. Financial products created by corporations are INTENDED to make profits. That is the reality. The more profitable the product, the harder they will try to sell it – Lehman Minibonds, High Notes, etc. Anything that pays a high commission, comes with flashy marketing material, tv advertisements, must be raking in huge profits for these financial institutions.