MAS commissioned an external consultant to conduct a mystery shopping exercise in 2012 to determine the quality of advice given out by financial advisers. The MAS mystery shoppers' statistics were as follow:
- 28% of the recommendations were suitable;
- 40% of the recommendations may be suitable;
- 30% of the recommendations were not suitable.
Because ‘may be suitable’ means potentially not suitable, what the MAS mystery shoppers survey is saying that up to (40+30 =) 70% of financial advisers’ recommendations are NOT suitable.
Imagine you seeing a doctor and there is up to 70% chance he will prescribe poison to you. Or imagine going for a surgery with a 70% chance he will take out the wrong organ.
That is what is happening to the financial industry.
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