See the right person for your problems

It often puzzles me on how we refuse to see the right person when we have troubles. When we are sick, we go to the doctor right? Using his expertise, were able to gain a deeper insight on the problems that plague our body, and he might send us to a specialist if need be.

However this is not the same for our financial health. We do not see a financial advisor when we have questions regarding our insurance and financial planning aspects of our lives. Once I read on hardwarezone, a local popular forum, that someone has questions regarding purchasing of private shield plans. A financial advisor offered to help, but the threadstarters reply was that she dont need or want to see a financial advisor. And this reply of hers garnered popular support.

It sure is sad to see how the reputation of a financial advisor stink like that, but unfortunately I think that the smart man or woman would consult an advisor rather than asking clueless people on forums because they do not have any idea on the clauses in the insurance contract.

Whilst it is sad, nobody can blame these people for feeling that financial advisors are just out there to con their money. To put it simply, the name stinks. How many advisors are genuinely there to help a client? The number of people who do a fact find before proceeding to recommendations are considered to be extremely rare.

There are a couple of reasons why I would think that financial advisors have a hard time, and I believe that the industry has to improve for its reputation to go up. But the smart move now would be to find a trustable advisor to begin advising you on any matters.

1. It is easy to be a financial advisor
A doctor has to undergo specific training up to 6 years in duration before he is allowed to practise. An advisor only needs a pass in o levels? Furthermore, how convinced can you be of an advisor selling you an investment plan in a mutual fund if he has no qualifications regarding finance? Only a handful of financial advisors proceed on to get their CFAs. Can you imagine your advisor recommending you to select a fund, but he does not really understand how it works? Telling me it will go up does not convince me at all.

2. Lousy standards with respect to learning about new products
I have participated in the launch of new financial products. Advisors have to sit in for a few hours of lessons and then take a mcq test. Throughout the lesson, certain words are emphasized in a different colour to signify that it would be tested. When the mcq is being taken, people discuss despite being told not to. If our A levels are conducted like this, Im sure no one would have any faith in our qualifications. Similarly, how much faith can I put in my advisor if their knowledge on new products are built on shaky foundations?

3. Not following proper procedures
Do you know that advisors are supposed to get your financial details like salary, CPF contributions, dependents details, monthly expenses, existing insurance plans etc before recommending you any product? However, how many advisors truly adopt such a measure? How many times has your advisor called to say that theres this new product and arranges for a meeting? As opposed to having yearly reviews before saying I think this product suits your current needs or I have a new product, but I dont think it suits your needs at all. This layer of transparency and integrity would go a long way in improving the reputation of financial advisors.

Although there are many black sheep in the industry, there are good ones too. Ask your trusted friends if they have any advisors they trust. I do not like talking to agents on roadshow particularly because I do not know them enough to trust them. But the main lesson of the day is to seek proper help and never ask a completely untrained person for financial advice.

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