Wednesday, October 22, 2008

IFA "United We Stand!"

IFAs have been around in Singapore since the Financial Adviser Act was enacted in 2001. We are licensed individually by MAS to advise on Life Policies and Collective Investment Schemes. We represent the clients by ensuring that they get better value and advice. We are very focused on providing proper Financial Planning Services to ensure plans implemented are aligned with needs. We diligently read and analyse client's investment portfolio to ensure that they are able to achieve better returns via constant rebalancing and reallocation.

Having been part of the FA industry, I observed that the IFAs in Singapore don't seems to grow fast enough and they are not able to attract and retain people in it. The market share of businesses brought in by IFAs in Singapore remain small with only around 6%. The growth is slow and the numbers seems to be stagnant.

The benefits of engaging an IFA for long term is so much better than engaging an RM or a tied agent. An RM are more of transactional type of adviser and their concern for clients will not be for long term, an agent is not able to properly adopt the proper investment stragegies needed and that they can only sell what they carry regardless if its of the best value for the client.

What I feel is that IFAs in Singapore are not united and strong enough. We are not able to innovate and reach out to the public. Each of us have limited resources and we aer too scattered. There are so much ignorance and misunderstandings among Singaporeans about an IFA even though we have been around for 7 years. All the FAs in Singapore don't seems to talk to each other, there are no unity, no shared resources, no shared knowledge, no combined efforts, etc.

I really hope that there will be a day whereby all IFAs in Singapore stand up strongly and do things together and bring out the benefits of IFAs in Singapore. Some crazy ideas I suddenly thought:

1) Every adviser in Singapore contribute a small amount into a pooled fund to run a non profit professional IFA association. This IFA association shall market the IFA industry agressively by probably coming up public events or materials to be distributed to public, etc. Their role is to create awareness and will also be a very strong body to protect the interest of IFAs.

2) A centralised compliance and training unit for all IFAs in Singapore. This Centralised compliance unit is run on non-profitable basis and will charge individual IFAs on a yearly average headcount basis. Such compliance unit will have strong knowledge on compliance and is able to free up so much labour and mistakes, especially for the small/medium sized FA firms where turnover rate of staffs are high.
* They are also able to co-ordinate trainings and events on a larger scale basis. Example, a product launch organised for 1000 audiences instead of 100.

3) Standardised forms in all IFAs. By having standard forms, we can use technology more effectively. We can come out with a platform whereby all IFA can do away with papers and submit cases electronically. This way, the administrative work in IFAs will be reduced. No more waste papers, scannings, manual filings, etc Can save a lot of money and time for advisers and company alike.

4) Special softwares created specially for the IFAs industry. Softwares such as Advisers Matrix by i-fast is a very good example. Softwares that can be created include a comprehensive Financial Planning Softwares, powerful Clients Relationship Management Softwares, etc They must be so special and unique only to IFAs and no insurance companies can adopt.

I believe that there are many other innovative ideas out there but no one bothers to share. The IFA of current is like every man an island. Most of us are only concern on survival. We are simply not United enough to do something big. We cannot push the blame that we don't grow to anyone except ourselves. There are simply no strong reason why a consumer will not want to engage an IFA.

15 comments:

Anonymous said...

The problem is the FAs are behaving like the tied agents who have been known for unethical practices but the FAs are catching up. Thery may end the worse.The consumers are stupid . MAS is not doing enough to educate the public. Moneysense didn't deal with this.

patrick lim said...

dear adrian,

excellent post.

with your points in mind, and in my small way, i have been doing what i can in my 11 years in the financial industry to share my very own limited resources with all fa/ifa as well as with all insurance companies.

for example, i have been invited to speak mainly on wealth protection planning in fa/ifa/insurance companies. in other words, sharing my intellectual property even though i have not been compensated in any way.

another area where i believe i have contributed is in representing fa/ifa/consumer by sitting in the product committees of insurance companies in enhancing existing products as well as in the design of new products.

one recent example of these is in the impending launch of uob life's new whole of life product, maxi secure and the enhancement of maxi future II in the later part of this month.

and yet another way of my giving is to share my time and advice to fellow fa/ifas when approached through personal meetings, emails, mobile calls and also by sms.

yes, i do agree 101% that much, much more will still have to be done to rally our fa/ifas together and stand united in our collective role to reach out and serve all consumers especially in the area of financial iq, equipping them with financial literacy.

and last but not least, our afa (association of financial advisers) stands committed to do the utmost in all areas that you have highlighted but having said this, the afa has very limited resources (financing) to do things on a bigger scale.

ps: please let me know in what other ways can i rally all fa/ifas to be united.

thanks and God Bless.

Anonymous said...

IFAs do not have access to all the financial and insurance products the industry has to offer. This means that their recommendations are not necessarily the best the industry has to offer.
AT the end of the day, it is the agent's service, expertise and intergrity that matters,ifa or tied.

Regards
Zenpoet

Anonymous said...

Mister,
What you mentioned is common among other industries too.

You want to know why?

It's because this is BUSINESS.
You compete with one another and the weakest link gets eliminated thru' bankrupcies, discontinuation of biz, merger, acquisition.

This is how business works.

Harlow.. you ok or not?

Philip Calvert said...

Interesting article - thank you.

You know there IS a way for IFAs in Singapore to unite, collaborate and advance the financial advice profession. And it's already happening on the Internet.

Since I last spoke at the Asia Pacific Financial Planning Conference in Singapore, I've been working on building the IFA Life website - a social networking website where IFAs and financial planners can network, share best practice, get marketing help and provide support and help to one another.

Although UK based, IFAs from Singapore are already joining. There is also a Singapore specific forum on the site.

I hope this helps - see www.ifalife.com

Philip Calvert

Anonymous said...

Patrick Lim,
you are an IFA but I haven't seen you coming out to promote the merits of IFA and IFA best practice. Perhaps you still have the broker baggages and have not really understood the roles of IFA.IFAs are not brokers.IFAs are supposed to be an outfit for financial planning and which tied agents can't perform adequately because of limited products for client solution.
As a veteran you should step out and tell the consumers hundred of reasons why IFAs are better poised to meet their needs efficiently, adequately and effectively and which the tied agents can't.

Anonymous said...

You got to be careful otherwise your former colleagues may think you IFAs are ganging up against them, taking away their business.
Well , it is happening sooner than expected . By next year ntuc agents will have real hard time coping up with the changes. Their days are numbered. Their product pushing days will end and so is their career as product pushers.The good news is they will go down in history as the greatest product pushers in the industry. None could hold up a candle to them
The pushing skill is unsurpassed.

IFA Exceeelent

Khiat Han Hwee Adrian said...

Thanks everyone for the feedbacks. I was rather surprised to see a visitor from UK giving us some tips which might be applicable in Singapore context. Tks for sharing, Philip...

Hi anonymous 11:35,

Tied agents and bancassurances will always be there. No matter what happens, they will have enough resources and talents to hold them strong together.

However, if anything unfortunate or bad news are to hit the FA industry, we may not be able to stand up as strongly as they are.

Wilfred said...

Adrian,

The Association for Financial Advisers (AFA) is the organization you are talking about. Every year a few hundred IFAs in Singapore attends its Congress meeting. For this year's congress meeting, I didn't see you there? I have a good time fellowshipping with other IFAs and catch up with some old friends as well. Hope to see you next year. Some of your colleagues was at the congress too.

Wilfred said...

Zenpoet said "IFAs do not have access to all the financial and insurance products the industry has to offer. This means that their recommendations are not necessarily the best the industry has to offer.
AT the end of the day, it is the agent's service, expertise and intergrity that matters,ifa or tied."

Perhaps you are not aware that fee-based financial advisers do not require to sell any products and they can recommend anything.

http://www.wilfredling.com

Wilfred said...

To the anonymous posted dated "October 22, 2008 9:35 PM", to be fair to Patrick Lim, he had been promoting the merits of IFA in the public forum and it is through his afforts that I join the industry as well. Unfortunately some forumers in those forum view his promotion of IFA merits as promoting sales and those did not view him positively. I too tried to promote the merits but got misunderstood as trying to sell something. Due to these reasons, we stop sharing our knowledge and stop "promoting".

Khiat Han Hwee Adrian said...

I'd heard about Patrick Lim way before I joined the FA industry. I read his blog and get to know about IFAs. I saw him as an FA with passion and conviction and is a model to me in certain aspects.

Promiseland is the first IFA firm that I know and I read many articles written by their advisers. With all the things that he did for this industry, I don't think he works just for money.

Philip Calvert said...

An interesting and constructive thread.

I am planning to visit Singapore again early next year to run some seminars on how IFAs can use the Internet to collaborate, share skills and develop their businesses.

Can anyone point me to a list of IFAs in Singapore please?

Thank you.

Philip

www.ifalife.com

Wilfred said...

Philip,

You can get the list here of companies here: http://www.afas.org.sg

Anonymous said...

Hi Wilfred

I am aware of fee-based advisors, that does not make tied/ifa more of less unprofessionals.We should never have a mindset to sell products, but to serve the needs of the clients and put their interest and financial planning as top priority.

Regards
Zenpoet