The following letter was published on Straits Times online HERE:
I SUPPORT the Monetary Authority of Singapore's review of the commission-based structure of financial advisers ('Financial advisory sector faces shake-up'; Tuesday).
Many advisers and firms have their doubts, anticipating that clients will be unwilling to pay for advice.
But that is the case because the main focus of financial advisers now is product sales. As a fee-based financial practitioner for many years, I have had no problems finding clients who are willing to pay fees for advice as long as they understand that the client-adviser relationship is not focused on products.
Patients are willing to pay consultation fees to doctors because they are confident of obtaining good advice without fear of being prescribed unnecessary drugs.
Similarly, advisers can be confident about charging a fee provided they are competent to advise holistically on retirement, investments, Central Provident Fund, insurance and estate planning.
With the emphasis away from product sales, product manufacturers will no longer be able to incentivise advisers to push their products. Product manufacturers, not financial advisers, should be worried.
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