Tan Kin Lian's Blog: Special report on Financial Advisers

Sunday, February 22, 2009

Special report on Financial Advisers

Read this report in Business Week.

14 comments:

TM said...: How would financial advisers plan if they realised that all our expectations of future growth are completely wrong? How would they react if they were told that we have reached the limits to growth? I strongly recommend this series of videos where the author talks about how intertwined the economy, the environment and energy are and why the next 20 years will be totally unlike the last 20.

I recommended viewers to register (it's free) to view the videos in high resolution, if not you can only see it in standard resolution.

http://www.chrismartenson.com/crashcourse; February 22, 2009 6:20 PM
zhummmeng said...: Certified Financial Planner (CFP)
is The GOLD STANDARD of advisory certifications and Financial planning's HIGHEST standard. Candidates must pass a 10-hour or 6 hrs for Singapore, exam covering nearly 180 topics, from group medical/life insurance to investment to derivatives. The pass rate for the exam is about 53%. There are more than 53,000 CFPs in the U.S or 800 in Singapore.

Chartered Financial Analyst (CFA)
The CFA designation is a STAPLE AND VERY SOUGHT AFTER in the world of investments AND IN THE WORLD. Recipients must pass three exams. Each level demands a minimum of 250 hours of study, and coursework includes corporate finance and financial statements. More than 76,000 people hold the CFA and one-third of them manage private wealth.
If you are looking for a qualified and competent adviser it serves you well to engage one with one of these qualifications or both.
Whether it is insurance planning or investment planning or financial planning, whichever, you will get responsible and competent advice. They are global qualifications and passing is by rigorous exams and they set the industry practice standard. They are NOT salesmen or product pushers.
They are fee based or both . More importantly they put clients' interest first and most prefer fee as remuneration to avoid conflict of interest. Any practitioner found to have committed professional misconduct or breaching their code of ethics will be censured , fined or struck off the register.
Commission is the source of conflict of interest and malpractices. There have been many anecdotal evidences reported as in the recent minibond saga and real estate . In life insurance malpractice is very high and many go unreported because consumers are ignorant of their rights. This is worsened by dubious qualification requirements by MDRT body which encourages unethical practices because the requirement for qualification is by commission earned resulting in agents selling and pushing ONLY high commission products to the detriment of the cleints' financial needs.The qualifiers are only at the best salesmen and definitely NOT financial advisers who plan and advise and NOT push and peddle products like insurance agents or agents masqueraded as consultants.
The shift to solely fee based practice is underway in other countries and Britain has set 2011 as the year to completely switch to fee and ban commission as a way of remunerating advisers. UK has seen too many malpractices and miss-selling law suits against insurance agents and the FIs to warrant the ban of commission quickly. This had been the problem since 1927 and the various bodies formed later was to address them, to eradicate malpractices and to put consumers' interest first but commission was NOT addressed.This explains why malpractices and conflict of interest are still rearing its ugly heads.
It is hoped that the new financial guidelines by MAS will put paid all the miss-selling and malpractices by insurance agents and the FIs they represent and to make the CEOs and the management liable for them.Hoped that this the defining moment for the industry.; February 22, 2009 7:09 PM
Anonymous said...: Flight to safety? Where? There is no place on earth that is safe now.
Some insurers like you to believe that putting your money with them is safe. Another beguiles you that home is safer. What I find in all of them there is one common motive and that is they want YOUR MONEY.
They now tell you traditional insurance products are safe. They are singing a recycled song.Are they? What do these products invest in that you can't do on your own? Put in another way, they still have to invest and take risk to give you the return they project in the benefit illustration.Can they meet their projection? If they claim they can, why don't they guarantee the return? But they dare not. So you still have to take risk when you buy traditional insurance products, right?
You see, there is no straight forward information. They twist and turn and hope that you get into a knotty situation, confused and in a comatose state , then they go for the kill.
Today there is no honesty anymore. Everybody has something up their sleeves. They are desparate and would use anything to 'win' you over but all are trickery.Dishonesty fueled by greed.
So be careful when you deal with financial products salespeople especailly the door to door salesgirls or the koyok selling insurance agents at roadshows.; February 22, 2009 10:45 PM
Anonymous said...: After minibond fiasco, I'll never buy another product from financial "advisers" again; February 23, 2009 10:42 AM
Anonymous said...: In Singapore, ChFC is more popularly sought after than CFP. One reason is because ChFC covers more topics than CFP. Another reason is because many practitioners dislike paying annual fees for their CFP whereas there is no annual fee for ChFC. However, an important reason why ChFC is preferred among practitioners in Singapore is the on-going fear that CFP has become too commercialised. Currently, ChFC is administered by SCI which is a non-profit organization. ChFC is also no less easlier than CFP. In Singapore, a ChFC candidate is required to sit 21 hours of cumulative examination. This is not including the compulsory class presentation.

Due to these reasons many practitioners have given up on their CFP titles and switched to ChFC. The public seldom get to hear of the ChFC - this is due to its non commercialisation nature of this title resulting in very low publicity. CFP has become too commercialised.; February 23, 2009 10:49 AM
Anonymous said...: Of course they cannot meet the projection. Even NTUC Income, which is supposed to be the most conservative and prudent, did not meet two of my policies which recently matured. It is disappointing because projection is at just 5.5%. NTUC Income made over 10% the last two years but the new CEO has decided to smooth it over so policyholders like myself lose. What to do, they do what they like and there is nothing we can do except not buy anymore. For those who have tasted their medicine, we are wiser, only those newbies will still be buying. Good Luck to them.; February 23, 2009 4:01 PM
zhummmeng said...: 10.49AM

I guess you belong to the insurance industry. Although many modules needed to be covered for ChFC, exams are a breeze.Why? it is literally buying a cert. You need to attend classes for some talk on some subjects.Not only that , just pay about $4000 and soon you can have a cert to hang on the wall plus some letters after your name.Now you know why it is very sought after, right? Difficult to get CFP? go for ChFC with $4K. $4K each 'candidate' how much does the college make? A certificate mill? The standard has been lowered so much since a few years ago. As result the CFP stops recognising it and will not compromise its standard, the GOLd standard.Even ISO adopts the standard.Has ChFC make such claims?
Today we are talking about the 6 steps in financial planning and who is the originator?
Try to claim for exemption with your ChFC and see.
There is guy from AMERICAN COLLEGE speaking at the IFPAS congress this 4th March, ask him about the ChFC. American College is the college which awards the original ChFC but the licensee here has 'killed' it. He will be informed of this when he is here. In US, you will be shocked to hear that the college has STOPPED offering ChFC courses instead it is offering the CFP courses.It is like can't beat them join them. In fact many years ago the College tried to buy over CFP but it was not for sale. Why? it was so popular with the practitioners and consumers because of its strong ethics and standard and at that time the buying public was so wary and suspicious of insurance agents who had ChFC after their names but pushing dumb and dubious insurance products for their own interest. The phrase "financial planning" became the industry buzzwords and today when we talk about helping and managing personal finance as financial planning and NOT financial consulting.Anyway, check it out with him, you don't have to believe me .
In Singapore why SCI is still offering ChFC? It is NOT ONLY course, it is also offering other similar sub standard financial planning courses. It is trying to confuse the public and like insurance companies it has NEW products from time to time to offer and once the popularity wanes another course will appear to keep up the revenue? SCI is funded by the government but FPAS is self funded and non profit organisation..The fee like all other professional bodies is for ANNUAL RE-CERTIFICATION.Check the CFP website in US and you can see how stringent the re-certification is. You may notice a lot of CFPs were struck off the register for misconduct and malpractice. It means business. Certification IS NOT for life. As a practitioner what is the $210 yearly? A lawyer spends nearly $5K yearly for renewing the license.A doctor depending on his specialty spends probably more than $10K yearly.
What is cheap or free means cheap advice. It also explains why the title crazy insurance agents are going for this ChFC, free!!!Free advice? The public get nothing but product pushing.
SCI is now flooding the market with easy to pass courses? What have the graduates learned ? The graduates are still as blur as sotong.I know of many who can't make one end of insurance planning TO THE OTHER let alone investment..They found CFP too tough and unfortunately they compromised by settling for ChFC and FChFP another close 2 eyes, easy to get designation...just pay and go through the motion of the course and you get a cert.
The industry is wary of the low standard of the insurance agents and MAS has sounded a warning and danger that consuming public is short changed in all areas.
Publicity for CFP? no need!!how can it escape the public's attention? It is the GOLD STANDARD OF THE INDUSTRY and FINANICAL PLANNING'S HIGHEST STANDARD.; February 23, 2009 4:02 PM
Anonymous said...: February 23, 2009 10:49 AM,
if you are studying for a
Bachelor in financial planning
Master in financial planning or
PhD in financial planning
what is the benchmark or standard that these courses require you to attain?
CFP or ChFC?
Check with the universities in Australia, US and UK
offering these courses and you WON"T be surprised that they are bench-marked against the CFP, the highest standard of the industry.
The FAA borrowed a lot from the CFP
to formulate the practice guidelines and principles.
Hey, go for the best to give the best to your clients. They deserve your best advice and don't compromise and short change their financial life goals.; February 23, 2009 4:17 PM
Anonymous said...: CFP switching to ChFC? It is big joke that CFP certificants settling for something lesser. The truth is many went for the ChFC because they found the CFP course tough even at module 1 and desperate for some letters after their name they switched to ChFC.If this is what he meant by many wannabe CFP candidtes switching to ChFC after finding the course tough? ChFC need NOT pass the rigorous exams and they can "complete" the course with a class presentation in couple of weeks or lesser.This makes a mockery of a professional designation. If you have watched the presentation it is really a sham.This is supposed to be a professional undergraduate course.
Anyway, never mind the non rigour of the exam. "Graduates" of ChFC can't even distinguish between bonds from equities and their characteristics.For some they still fumble with a financial calculator. Time value of money is some kind of creatures they have hardly heard.; February 23, 2009 6:29 PM
Anonymous said...: 4.01PM,
Your special bonus went up in smoke last year. If there was no restructuring of bonus probably you would get more. Hard luck , wrong timing. Now the products are even worse, riskier too and it is anybody's guess what is the return. The special bonus is so special that you may not get it.
Their new product, THE SAIL, not the upmarket condo, is very risky after the 10th years, nothing after this. It is like asking somebody to leave some money with them and wait for 30 years and not knowing what will be declared. How about I ask ntuc to invest with me for next 30 years I will triple their money.Only on paper it looks good, right?; February 23, 2009 10:26 PM
Anonymous said...: China and Japan will outstrip US in the number of CFPs soon. In Japan, it is the most sought after professional designation right now.
In China CFP is very popular in the big cities like Shanghai and Beijing. CFP will be in Russia soon, an unexpected place.
Whereas ChFC is becoming extinct like the dinosuars except in Singapore where it is the case of "no fish prawn also okay". As long got some ABC after my name , ok already, can bluff the stupid customers.
CFP is not going to lower the standard to accommodate these people.
Apart from the annual re-certification fee, a certificant is required to meet continuing education(CPD) and ethics like all professional bodies. Half of the fee goes to the FPSB in US.So what is the "commercialization" this guy is talking about?
Salesmen don't do financial planning, so having a ChFC without the knowledge is alright. They don't need to, they push and peddle products.; February 23, 2009 11:05 PM
zhummmeng said...: It looks like Singapore is the only place on earth that ChFC and CLU are still being passed off as equal or substitute for CFP. Their country of origin has long stopped that.
I am sure that guy from American College will be pleasantly surprised to learn that their designations are still revered here and not extinct yet. But he will be shocked to learn the people who have these designations are only salesmen who are pushing and peddling products and are NOT consulting.This is insulting , isn't it?They should be known as financial insultants instead of financial consultants.And worse some are even known as senior or executive consultants who only peddling koyok products at roadshows and Waterloo Street pasar malam.Not surprised they can be found at Kelantan Lane or Sungei Road.
Please, somebody ask him when he is here on the 4th of March to speak at the Congress at The Rock, why American College is offering CFP course and NOT ChFC and CLU courses which are theirs.It is puzzling , isn't it? Hope he will be brave enough to tell the truth.
On second thought , maybe not a good idea to embarrass your guest.; February 27, 2009 12:47 AM
流氓369 said...: zhummmeng

no matter how much noise you make, MAS isn't going to do anything.

Venting your anger on the Internet doesn't fix any problem, as fists can't go through computer screens. Handle those people who're abusing you in reality.

LOL; February 28, 2009 3:47 AM
zhummmeng said...: Hope the noise gets in through other holes and finds its way to the brain and ear and heart. If you persevere long enough they will relent and give you an audience. Fist is violence. We believe in reasoning with proofs and we can provide proofs.; February 28, 2009 11:18 PM

Sunday, February 22, 2009

Special report on Financial Advisers

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