I have done many financial plans for fee-paying clients. Often at the end of the plan, I’ll make some recommendations. Most of these recommendations require the clients to do it themselves simply because I cannot do it. For example, revoking unnecessary life insurance nominations is one example. Other times it involved buying a product directly from the product manufacturer. I believe that to … [Read more...]
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These articles are about ethics and market conduct of financial advisers
How a typical financial adviser / financial planner earn a living?
Financial advisers and Financial Planners are distinct occupations. Most financial advisers earn a living by selling products. The “sales cycle” that an adviser employs is usually group into three stages namely: (1) Prospecting or leads generation, (2) Presentation and (3) Closing. Typically an adviser needs to put an estimated 80% of his time in the first two stages. He would source for … [Read more...]
Free advice is going to cost you your entire HDB flat!
Everybody I know is concerned about their salary because they want to save for retirement. Financial advisers are no different from the human being next door. They need to earn a living as well. Unfortunately, such clients are going to be sold expensive product. Why? It has to do with low levels of productivity. Productivity is the amount of output for each unit of input. For financial adviser, … [Read more...]
Why engaging a financial adviser may not help?
Many people who engage financial advisers on investments have some unrealistic expectations. How well a portfolio can perform depends 99% on the investor himself. So regardless of how good a financial adviser is, if the investor does not do a proper job, it is guaranteed that the portfolio will lose money on a long run. The following are some of my thoughts speaking from real life experience with … [Read more...]
Smart arbitrageurs get GPF Warning Circular to change career
This is a work of fiction. Any resemblance to persons fictional or real who are living, dead or undead is purely coincidental. MORE Singaporeans are being led by their unscrupulous Trapped Commoditized Advisers to buy and sell commodity rapidity in a bid to withdraw cash from their Guaranteed Pension Fund (GPF). GPF is a source of low cost capital to help finance the city’s state … [Read more...]
Finexis ‘dumping’ AXA FutureProtector at $0 for first year
Some of you may have read that US often accuse China of “dumping” cheap products into the US market. Not too long ago, China also accused US of “dumping” cheap products into the China market. What is “dumping” really? The act of a company “dumping” their products is by selling their products at below cost of production. The company does this to enlarge its market share. On surface it appears to be … [Read more...]
What Is Really Meant By “Professionalism”?
A professional financial planner/adviser has 4 qualities namely: One who possesses specialized knowledge not generally understood by the public; One who has qualification which acts as a threshold entrance requirement; One who has a sense of altruism; and One who subscribes to code of ethics. What are these qualities and why most financial advisers and planners are not able to fulfill … [Read more...]
How could a financial institution pay 100% of the annual premium year in commission?
Has anyone wondered how is it that insurance company could pay more than 100% of its first year regular premium insurance in commission? I never figured it out until now. When an insurance company pays commissions, it will book this payment an amount owed to the insurance company by the policyholder. Thus, the policyholder “borrows” this amount from the insurance company in order to pay … [Read more...]
Why financial advisers must abandon their clients?
I often hear of complains from clients that their previous advisers stop contacting them after a few years. Clients often felt that their advisers were just out to make money but did not bother about after sales service. I would like to write about this from a new perspective. Let’s say the adviser need to earn $4000 per month in earnings. Assuming a banding rate of 70%, the gross revenue to … [Read more...]
If a financial planner can do more things, why aren’t there many financial planners?
Firstly, it is not true that financial advisers are not planners. Many financial advisers are already helping their clients to do budgeting, tax planning and estate planning. However, this is often done on a “by-the-way” basis and may not be conforming to the professional standards. Secondly, for a comprehensive financial plan to be conducted, it will require significant time and effort. For … [Read more...]
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