Singapore has a population of about 5 million. 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 |
United States |
311,000,000 |
310,000 |
1003:1 |
Australia |
22,000,000 |
18,000 |
1222:1 |
United Kingdom |
62,000,000 |
20,000 |
3100:1 |
Singapore |
5,183,700 |
20,000 |
259:1 |
If we take the number of practitioners to be 20,000, there are only 259 people to each adviser, a far cry from United States’ 1,000 and United Kingdom’s 3,100. We have more advisers than Australia, a country which has more than four times our population!
Compared to other professions in Singapore
In comparison with other professions within Singapore such as those in the medical ......
Hi SethWee,
I just stumbled onto your blog and I think your post is quite good. Let me share some thoughts on my own experience with insurance agents.
I have been aggressively sold whole-life and endowment policies. So-called “good friend” of the family promoted endowment policies when she herself mainly bought hospital/health insurance for her own kids but did not mention anything about the health policies.
I think term insurance are the best value-for-money deals if the main purpose is protection (I don’t like to mix insurance with savings, investment). Despite letting my preference known, most insurance agents either try to persuade me otherwise or simply walk away. Why waste time on someone with no profit potential? On self-reflection, can I really blame the insurance agents? I blame the insurance companies for setting the wrong kind of incentives that drive our insurance agents to behave badly towards Singaporeans. Can anyone honestly say he will sell term policies if he is paid on a commission basis? Financial planners who sell term policies are fee-based, not commission-based. Are they more ethical than the commission-based who sell policies that cause Singaporeans to pay a lot for insurance and still remain under-insured? I don’t think so. I think the problem does not lie with our financial planners not being ethical. The problem lies with the insurance industry in setting the wrong incentives that reward bad behavior. If behaving unethically leads to the million-dollar round table, you can be sure most of the knights on the round table do not get there in an honorable manner. The cause of the problem is insurance agents being paid mainly on commission.
If Singaporeans want to get good financial advice, they have to pay for it. Unfortunately, if that does not come cheap enough, then fee-based financial service will evolve to serve mainly the rich. Do you see that as a possible trend?
Nevertheless, advice that cost money(even if very expensive) is still preferable to free but biased advice.
Hi hyom, I do indeed recommend term policies to every client when life insurance is required and I am remunerated by commissions. But I guess you are right too, because I am looking at moving towards charging fees when practicable.
Thanks for your comment!
(have cross-posted your comment to my blog post so my readers can view it too)