The terms ‘trusted’ and ‘financial adviser’ may be seen as a paradox by some. Some might even wonder, ‘Are there really financial advisers that can be trusted?’ Just how difficult is the quest to find a trusted financial adviser?
Have you ever encountered any of these situations before?
- You were walking in a mall, and you were suddenly stopped by a financial adviser doing a roadshow. The adviser is trying to convince you, in that same sitting, to buy a financial product from him.
- Your long-lost friend, whom you had lost touch with, suddenly reaches out to you to catch up over a drink, only for you to realise he is a financial adviser trying hard to convince you to buy some financial products from him.
- You did a recent financial review of your insurance and investment portfolios, only to realise that your financial adviser recommended financial products that were not suitable for you.
For me, these three situations were ones that I had personally encountered. These experiences allowed me to gain insight into what it means to be a trusted financial adviser.
Insight #1: A trusted financial adviser should not pressure you into buying a financial product, as a substantial amount of time is required to understand your financial needs, goals, risk tolerance, as well as your time horizon.
I have encountered financial advisers at roadshows trying hard to sell me a financial product without conducting proper fact-finding. What surprises me is how quickly they try to sell me the product without even fully understanding my financial needs, goals, and risk tolerance. When an adviser uses sales tactics like time pressure or a welcome gift to close a product, the focus often is not on the client. While not all financial advisers at roadshows are unethical, we should be wary of those who try to sell a financial product before first understanding our financial needs.
Insight #2: A trusted financial adviser should not use fear tactics but should take the time to help you learn if his services are what you need.
One of my good friends reached out to me after multiple years of not connecting. In that session, what I thought was a simple dinner and catch-up turned out to be one where he attempted to sell me insurance. He began by narrating the anxiety of his relative having cancer, spoke about the importance of insurance coverage, and asked whether I would want to get insurance from him. What made me unhappy was how he was attempting to use fear to sell me insurance. Instead of leveraging fear to sell insurance, a trusted adviser should spend time sharing information about his services so that we can assess if his offerings are what we need.
Insight #3: A trusted financial adviser provides you with comprehensive financial advice that allows you to make the most informed financial decision.
Something my friends, family, and I have encountered are financial advisers who tend to recommend products without providing a proper explanation of the plans or options to choose from. Once, an adviser recommended a whole life plan to me, simply stating that it would be beneficial without mentioning the existence of a term life plan, let alone providing any comparisons between a term life plan and a whole life plan for me to evaluate the most suitable life insurance instrument for me.
After conducting more research, I realised that obtaining a term life plan and investing the rest of the money in a low-cost, globally diversified unit trust, or ETF would have been more beneficial for me. From my experiences, providing an array of information for comparisons, aligning with the client’s goals and needs, and allowing space for clients to voice doubts, concerns, and queries are more important in informed decision-making.
My Journey to Finding Providend
Upon researching online and speaking to family and friends, I found that my bad experiences were not uncommon. The experiences I had were also shared by friends and family. I discovered some countries had even banned the sales of commission-based financial products because of unethical practices. Many fee-only financial advisory firms were started in the US, UK, and Australia. They recognised that if a firm (whether commission-based or fee-based) were paid by product commissions, there would be a tendency to recommend products that benefited them financially instead of what was best for their clients.
Reading about the fee-only financial advisory model overseas made me wonder if this model existed in Singapore. That was when I stumbled upon Christopher Tan’s video produced by The Royal Singapore on why he had left the insurance agency to start his own fee-only financial advisory firm, Providend. His perspective on wanting to revolutionise the way financial advice was given by removing the inherent conflict of interest created by commissions resonated deeply with me. He wanted to ensure that clients received the best conflict-free financial advice.
I was at a crossroads in my career when I made these discoveries. Having been a youth social worker, I passionately believe that every youth is a unique individual with their own set of resources, needs, and goals. I believe that financial advisers could only give the best advice to their clients if they first took the time to understand them. It was a breath of fresh air when I found resonance in Providend’s philosophy of client-centric financial advising.
Interested in finding out more about Providend, I decided to contact a client adviser to experience what it would be like to receive financial advice from Providend. The client adviser whom I spoke to was honest, and genuine, and provided me with greater clarity on my next steps concerning insurance. This gave me a glimpse of what client-centric financial advising could look like. Convinced of this, I then decided to apply for the role of Associate Adviser at Providend.
Having been with Providend for the past 11 months, I am proud to announce that I have finally found a financial advisory firm that I have grown to trust.
I have also begun to plan and implement my family’s insurance and investments with Providend because of the trustworthy financial advice I first received from the company.
My quest for finding a trusted financial adviser ended with me finding both a trusted financial adviser as well as a job I am truly grateful for.
Dearest reader, I sincerely hope that you will be able to find a trusted financial adviser. An adviser who:
- Will not pressure you into buying a financial product but will first take the time to understand your financial needs, goals, risk appetite, and how much you can commit.
- Does not use fear to get you to buy insurance, but takes the time to help you learn if his services are what you really need.
- Advises you comprehensively so that you will be able to make the most informed financial decisions, to lead the life that you have always wanted.
This is an original article written by Sean Tan, Associate Adviser at Providend, the first fee-only wealth advisory firm in Southeast Asia and a leading wealth advisory firm in Asia.
If you are interested in joining our Providend Associate Adviser Programme, kindly visit this link to find out more: https://providend.com/careers
For more related resources, check out:
1. Are You Getting Value From Your Wealth Adviser?
2. Money Wisdom Podcast S3E1: Meet Your New Co-host, Jin Lee!
3. Here’s Why I Broke My Bond and Joined Providend
*Providend is very excited to share that we are now ready to extend our service offerings to the younger accumulators who are looking for holistic, independent, conflict-free wealth advice!
For this group of younger accumulators, we know that it is not easy to make retirement planning a priority when other financial goals – buying a first home, for example, or saving for a child’s education – appear more pressing. Learn how we can help here.
We do not charge a fee at the first consultation meeting. If you would like an honest second opinion on your current investment portfolio, financial and/or retirement plan, make an appointment with us today.