Saturday, August 9, 2008
I had the opportunity to rub shoulders with many knowledgeable and qualified Financial Planners during my CFP course, financial seminars as well as fund managers updates etc. I also like to visit blogs of fellow planners and financial forums to understand how they conduct their businesses.
I believe that many of them have the knowledge, qualities and ethnics to be a true Financial Planner. I even considered some to be specialist in their own field. I have a lot of respect for them and I enjoyed walking alongside these advisers.
However, I am always confused whether we are wearing a Consultant hat or a Sales hat. If we are really wearing a Consultant hat, then people should be paying us for consulting us. If we are wearing a Sales hat, then we should not be bothered in giving consultancy services.
I met some of my ex-colleagues recently and I saw them holding on to a pile of policies and bags of gifts for the purchase of these policies. Inevitably, in my mind, I was wondering what hat were they wearing? Did these people buy for the gift or buy for the needs. Did these people buy after a proper fact-finding?
I had an observation during my course of work. A bread winner for a small family of 4 easily need close to a million dollar of dependency needs and probably $200k of Critical Illnesses Coverage and some Disability Income benefits to cover their expenses, etc. Probably 9.5 out of 10 have not met these criterias.
It is not easy to adopt a fee for Consultancy because the acceptance level by the general public is low. Even if they're willing to pay, the range is probably $50 to $70 for a full planning of around 2-3 sessions. 3 sessions of meet-ups, analysis of plan, plan recommendations and comparisons easily take up 5-6 hours of the advisers time. It means the hourly rate of the adviser is as low as $10. Its the same rate I engage a part-time maid to my house.
Of course, we can up the rate to as high as $1,000 per planning or $200/hour, etc, but to charge $200/hr, we must be a specialist and the cream of all advisers. We should also be in the company with the proper system and tools to justify this fee. Of course, the target market must be towards the higher end as well.
So will there be a day whereby Advisers can really wear a consultancy hat and earn a decent income. The day may come but can be quite sometimes ahead. We are still in the era when advices came free from everywhere and when gifts are rampantly used to entice people getting a policy. Which hat do you think the public see us as wearing?
My mind was mixed as I chatted with these ex-colleagues. I know what policies they sold, I know what premium size entitled them to the gifts. I believe that these client of theirs probably did not go through a proper planning. Their income come so much easier compared to a consultant. A consultant went through the whole process of financial planning with proper documentations and audit traits. He probably used four times the time and get half the income compared to them. A consultant was asked probably 10 times more questions than them because he really dug all the worms that relates to their financial plan.
I asked a very well known personality in our field of why good advisers left the industry a year ago. He answered, "Because they forgot to wear the Sales Hat... They need to change Hat and not insist on wearing one." His words carved deep in my heart and thats why I believe we must change hat for the right occasions. The person insisting to wear only the consultant hat may suffer and the person insisting to wear only the sales hat may make the client suffer. There must be a balance.
Yes. We are consultants, but there are nothing wrong taking the sales hat to wear when needed as long as we conduct our business ethically and be true to God and to ourselves. Mr Lee Kuan Yew wore both hats very well for he had convinced people around the world to Singapore for investment. If not for his ability and Salesmanship, Singapore will not be celebrating its 43rd Birthday with such style today.
at 10:35 PM