I read with interest in a recent article from Sunday Times on 11 May 2014 - “Beauty quests that end in tears” and “The dark side to the pursuit of perfection”. The articles were on the obsession with plastic surgery in South Korea and how a number of Singaporeans who traveled to the country only to come back with a botched face.
As I read those articles, I thought I was reading about the sad state of affairs in Singapore relating to the financial advisory! Here are some similarities between botched plastic surgery and botched financial plan:
|On Botched plastic surgery (quotations based on the above ST articles)||On Singapore's botched financial industry
|"Double eyelid surgery here, for instance, usually costs $6,000. In Korea, it can be done for $3,000."||On the surface, the consultation fee for financial advice $0. But in reality it actually cost your entire HDB flat.|
|"But those who fly over should keep some things in mind - such as the hard-sell tactics."||According to Monetary Authority of Singapores mystery shoppers survey, financial advisers are famous for hard selling products that are not
|"Sometimes I ask patients about the consultation they had, and they tell me things like: 'There was no discussion because he couldn't speak English, so I just left it to him'."||There is also a language barrier between a typical financial adviser and the prospect. The prospect only wants to get free gifts while the financial adviser is thinking about how much commission he can earn.
|"The Korean doctor removed fat from her abdomen and transferred it to her forehead, without her permission."||The financial adviser transfers the clients wealth to himself without permission by getting clients into a loan unknowingly.|
|"Fixing a botched [plastic surgery] procedure can be more costly than the original operation. "|
"And not everything can be fixed. They come to us and we have to tell them the damage is permanent"
|Majority of the botched financial plan (or lack of it) cannot be fixed (more of this later).
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