Last Updated on 15, August 2022
This video is for financial advisers. However, it is also somewhat relevant to those who are not financial advisors.
Can I ask you something? Have you wondered whom do prospects normally go to find out about investments?
1. Clients rely on courses for investments knowledge
You probably are aware that many of your prospects are relying on the Internet for investment information. That is to be expected. However, do you know that there are a significant number of individuals who are paying 4 digits in fees in courses to learn about investments?
2. These courses are conducted by those who are not qualified and not regulated.
What is worse is that many of these investment courses are conducted by individuals who are not even qualified and had barely invested more than $100,000 of their own money. Moreover, many of these courses are into the most complex form of investments which are derivatives. Of course, many of these trainers do not even have a MAS license to give financial advice.
3. Many clients learn about complex derivatives but do not know basic things like ETFs
The other day I spoke to one prospect who does not even know what is an Exchange Traded Funds although she attended an option trading class and actively traded together with others. So you can see that many of your prospects are already trying to run when they hardly learn how to walk. You probably also noticed that those who attempted to run (such as option trading) do not like to “walk” anymore. That is to say that when you advise them on the benefits of long-term investments, they are no longer keen. It’s like a baby having tasted ice cream, no longer wishes to drink milk. And your prospect no longer wants to drink mik and can you imagine what will happen to your prospect? Needless to say, most people will loss money trading.
4. Why is the situation is messed up?
Why is the investment situation in Singapore so messed up? Well, partly it's because there is a lack of regulation on investment courses. Any tom, dick and harry can set up a school and teach investments. However, I tend to put the majority of the blame on the way many financial advisers are conducting their businesses.
You see, many advisers are heavily focusing on insurance. Even if they say they are into wealth management, it will either be saving plans or 101 ILPs. I am not against 101 ILPs. I do ILPs as well. However, if you just stop there, you are just too shallow. Most of you are financial pharmacists - which focuses on selling products. Many prospects do not need financial pharmacists. What they really need is a financial coach or a financial adviser. As a coach, we may not be better than them. However, all olympic champions have a coach and the coach's main duty is to bring their athlete to the next level.
Many of your prospects and clients want to go to the next level in wealth management. Many ends up resorting to attending expensive courses conducted by unqualified trainers instead of consulting you as their financial advisors.
The way our industry works is also to be blame. I am sure you know there is a lot of focus in achieving the MDRT etc. I am not against these achievements either. I myself am a COT. However, if you are not careful, you may end up focusing on certain products that are easier to achieve.
5. The solution
My advice to you is to focus on holistic wealth management so that you can bring your clients to the next level. Otherwise, they have to seek help from courses which teach them to run when they have yet to master the art of walking.
To all financial advisers, let me give you a challenge. Achieve your COT or TOT through holistic wealth management planning instead of taking the shortcuts in focusing on products that help you achieve it easily, If you can achieve your COT and TOT the harder way through holistic wealth management, your achievement will indeed be remarkable.
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