Is Financial Advisory a Lucrative Job?

I like to ask those young Pru or AIA agents during roadshows on why they joined the industry when they tried to get me to complete their survey forms. I also asked the same question to some of our new advisers in my company.

The common answers are time flexibility, the skies the limit, can earn lots of money, its like our own business. We fail, we can still go back. Financial Independence like my manager, etc... Generally, the largest pull is the money and the time flexibility.

I'd seen advisers top the company by doing roadshow alone, I'd seen advisers specialising in only 1-2 products and memorised all the ways to handle rejections. I'd seen advisers with their "Introducers" bringing in load of policies for them. There are some who did well adopted different business model by targetting only a specific market and some who got promoted to managerial level and just keep training the 50-60 advisers under their belt.

They are capable of earning a lot of money and its proven to be lucrative. Their annual income probably range between $300k to $1million. Don't be surprised that by doing roadshows alone, some agents can earn as much as $30k/month. They are generally specialised in 1 or 2 products during the roadshow.

Just a guide for you. An MDRT earns around $100k in 1st year earned commission alone. We have not considered 2nd, 3rd yr, etc and all the renewal commissions. All these renewal may comes to around 40% of their 1st year commission. This means, they should be getting around $140k/yr or rather $11.5k/month. A COT earns 3 times more, which equates to $420k/yr and TOT is 3 times of COT which means $1.26million.

From a sale point of view, they surely deserve such pay because they are really good in convincing their prospective clients and have the capability to build up a profitable business model. From a professional point of view, I feel that most of them don't deserve a pay cheque of $30k/month for the type of advice they gave. Most of the time, they did not even identify their client's actual needs. For a minority, maybe yes. They probably are able to tap into the high networth market correctly who willingly pay them the money for the premium advice and service.

Financial advisory falls under a very grey area of professionalism and sales. The smart ones will earn all the money they can. They didn't do anything wrong. The financial system is built for them to excel towards sales and the higher cost plans they sell, the more they earns. They did not mis-sell anything because they are licensed to sell them.

The insurance companies love them because they are the geese that lay golden eggs and make the CEO rich. They will honour them and make them role models for all the new agents.

Please don't mistaken me for saying all insurance agents earn lots of money or don't deserved to be paid. There are still many good advisers out there who will look after your best interest and recommend things that are of good value to you. They may not be the one driving big cars or wearing expensive watches. Also, please don't give them too hard a time by making them running round Singapore 5-6 times for a plan that gives you good value or trying to ask for gifts and rebates for the low cost plan they recommended, etc...

Well. I did not answer the above question. The answer will depends if you are able to make it lucrative or to convince yourself that it should be lucrative.