Sunday 11 December 2011

Why one should engage a qualified financial planner

Financial planners have a bad name in Singapore. For many, the mere mention of them often bring back memories of aggressive insurance salespeople harassing passer bys at mrt stations and crowded streets to conduct a fake “survey”.  Being a strong believer in providing professional financial planning services to my clients, I often found it difficult to communicate the value of the work I do for many prospects I meet due to the negative impression people have of advisers in general. 

For those who are yet to understand the difference between financial sales and financial planning, do read up on my other article here.  

So is there a place for true blue financial planners in Singapore? The answer is “YES!”.  Based on my experience interacting with people ranging from low income to high net worth individuals,  I can confidently say that many Singaporeans think that they know a lot about financial planning when they really don’t.  For most of them, their knowledge are either skewed towards areas like investment planning or they have certain deep misconceptions (E.g. “The young should start investing as early as possible to enjoy the compounding effect of long-term investing.”)

Working with a qualified financial adviser can do wonders due to the following reasons:

  •     Constant changes in regulations, products & personal circumstances
  •     Everyone have different needs
  •     One point of contact
Constant changes in one’s financial circumstances
Are we in the know?
The argument here is simple, if full time insurance advisers, property agents already have a hard time keeping track of the constant regulatory changes, is it possible for a layman to do any better? Professionals should be better equipped to provide one with holistic advice. The real key is finding someone who is trustworthy and truly has your interests at heart in a sales focused industry.

Everyone have different needs 

Even if we segregate people by 3 simple characteristics: income, lifestage and financial need, there are easily 75 different combinations at play not taking into account one’s unique circumstances. There is no one size fits all advice, many Singaporeans often mistake generic advice published in newspapers, magazines, online portals as specific advice that should be implemented in their personal lifes, this is a grave mistake.

One point of contact for all financial needs

I have often found it puzzling why so many Singaporeans wish to deal with so many different consultants, agents, specialists, managers when 1 financial planner can be the information hub we need. Of course it is impossible for the financial planner to be proficient in all aspects however given his knowledge and expertise, he should be able to advise a client based on the whole context of their finances much better.  Many of these agents are more keen for the client to transact rather than advise. A financial planner acts as the gatekeeper for the client so their decisions can still work towards their long term financial goals.

                                    The downside of free financial advice 
                                    Why most financial product purchase end up badly