Career & Education
Oversupply of Financial Practitioners And Its Effects
By Sethisfy  •  August 23, 2012
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 ......
Read the full article
By Sethisfy
As an adult, I’ve been through many ups and downs in my career path and personal finance journey, not unlike many Singaporeans. From my years as a tied insurance agent turned independent financial adviser, I realised that there are very few sources of proper, unbiased financial advice for working adults to access. Worse, self-styled “financial consultants” are selling products like savings plans and ILPs to the detriment of the clients whose interests they were supposed to serve.
LEAVE A COMMENT
LEAVE A COMMENT

Your email address will not be published.

*

Your Email Address will not be published
*

2 Comments

2 responses to “Oversupply of Financial Practitioners And Its Effects”

  1. hyom says:

    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.

  2. Seth says:

    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)

Leave a Reply

Your email address will not be published.

Read More Articles
More from thefinance
%d bloggers like this: