Sunday, August 19, 2007

A valuable role for the financial adviser

Is there a useful role for the financial adviser? Can they provide impartial advice that is good for consumers? I have given my suggestion in this article.


jiante said...

I guess the problem with this suggestion is that financial products that the advisor recommends may also cause people to lose money.

Hence, people may be afraid to part with the money for advice.

For example, if the doctor gives bad advice, a patient can seek legal recourse and sue the doctor for a large amount of money. And the doctor most probably could pay up (everyone knows doctors are rich), financial advisors are... well, go figure...

For a financial advisor, they may not be able to sue as it may be harder to prove if the advisor is really acting in the best interest of the client. Different people will have different opinions of how the market works.

The advisor may be really in for the best interest of the client but if the market is bad, and the client may lose money anyway. Plus, there are different opinions on when to withdraw from the market or not.

However, if you compare it with the medical profession. When you have a fever, most doctors will just prescribe panadol and a medical chit. It has been scientifically proven that it works.

Anonymous said...

There are about 20% who can provide and dispense approppiate advice on a reasonable basis like the legal and medical profession. The other 80% are salespeople who peddle products like insurance agents.
The insurance association reckons that in 5 years time there will be only 4000 left out of the current 12000.The attrition rate is about 1500 a year with MAS raising the bar slowly. There is slew of tightening measures expected soon.
Shore up or ship out.This is good for consumers who will be able to get good advice instead of being sold useless products.

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