Singapore has a population of about 5 million while the number of practitioners in the financial advisory industry can be estimated to be about 20,000 to 30,000. This includes tied insurance agents, Financial Adviser firm representatives and banks’ financial services personnel. It is a considerably large number for our population size. How so?
Let’s look at how we compare to other countries:
|Country||Population||No. of Advisers1||Ratio|
NTUC Income recently debuted its first ever bond issue of $600 million 15-year bonds which was open to the public and corporate entities. The coupon rate was 3.65% and NTUC Income has the option to redeem the bonds in full at the end of 10 years.
Oversubscribed would be an understatement: the subscription rate was 15 times its $600 million offer, a cool $9 billion which attests to the attractiveness of the returns vis-à-vis the strong credit rating of NTUC Income. (And that’s a lot of money wanting to be invested.)
Imagine having a doctor who purposefully does not treat you completely such that you would constantly remain sick, thus having to visit the doctor repeatedly, each time paying for his services and medication. I am not familiar with the medical fraternity in Singapore and I trust that most doctors do their jobs ethically, but I know for a fact that the local financial industry thrives on this unethical practice.
I recently met a client who bought an investment-linked policy recommended to her by her friend which provided poor coverage while being taxing on her monthly budgeting.
What’s sad was what the agent wrote in the point-of-sale documents to justify the sale of the policy – an ostensibly apologetic “client to increase coverage when financially better”. It shows that the agent was fully aware that such a policy underinsures her client and yet deemed it fit to recommend her friend the policy. It is particularly upsetting since the client had specifically indicated her concern was (quite rightfully, for her profile) insurance coverage with her limited budget.
I will be holding a small seminar on how to avoid costly financial products and potentially devastating pitfalls in Singapore’s commission-driven financial advisory industry on 25th August, Saturday, later this month.
I am targeting this seminar at young working adults and fresh graduates because I know first-hand that this segment of individuals is heavily targeted at for sales of insurance and investment products that provide poor value. Financial agents usually employ advanced sales and prospecting techniques to push products that enrich themselves at the expense of their clients. People with full-time jobs have no time to come to an informed understanding of what they are purchasing exactly.
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