I would appreciate any advice given, and sorry if I use this space for Q&A purposes.

I quote.

For “advance” financial planning, I’ll charge $200/hour. Typically this takes 10 hours to 20 hours depending on the complexity of the work done, A timesheet is maintained for audit and a report will be generated for the client at the end of the entire process. The report is vetted and subjected to approval from my company’s appointed financial planning specialist so as to ensure all report meet a minimum standard of quality.

My comments.
Very professional approach. If you compare the fees to the commission-based adviser, it is very likely this will be more value-for-money. I like the part on audited timesheet very much too. If Wilfred can perhaps post a pdf of how the eventual report is like, I think it will be great!

The only issue I have is with the ‘appointed financial planning specialist’.

As this specialist is from the company, I feel there may be a vested interest. One way to counter this will be for this specialist to be paid executive, and holds huge responsibilities in signing-off to ‘pass’ the report, analogous to the CPA. Of course, this person should have clocked a number of years of experience and be highly accredited (somehow).

Then, these will further be audited by the regulator (MAS) by taking samples to add an additional layer of check. If MAS finds the appointed FP specialist and adviser to be unprofessional in their dealings, the company can be fined and the respective licenses be suspended. If this can be down for all insurers, brokers, distributors, I think the amount of product pushing will go down drastically.

Thinking further, maybe the report to MAS can include stipulated scenarios, assumptions made, limitations, and how the financial solution will be triggered in all the scenarios, followed by a conclusion of the limitations of the solution (afterall, no plan is perfect).

I am not an IFA .

The client should be asked to read some basic information (such as the FAQs in my website) to get some idea of the basics of investment, insurance and financial planning. The client should also get some data ready.

The fee-based financial adviser can do some calculations with suitable financial tools, and explain the outcome to the client.

If the financial planner handles 3 cases a day, the gross earnings of $12,000 over a 20 day working month, can be quite adequate to cover the office expenses and leave a good net income.

Some clients may need additional sessions to address more specific issues. This can be charged separately.

To wilfred ling: there are thousands of job that are commissioned based, are you implying that everyone of these commissioned based salesperson does not “serve the interest of the client. The client may feel obligated and the practitioner may be tempted to recommend expensive products”?

By the way, using the doctor’s analogy of paying a consultation fee is not exactly appropriate. Most GPs I know who runs their own clinic also charges for the medicine that they prescribed and they too earn a commission from that.

There is nothing wrong with commission based jobs.

Fee-based consultation can be subjected to abuse too. Can a fee-based consultant just keep talking and talking without getting straight to the point? Sure he can. If you really want to go fee-based, can, but let the customer decide how much of the hour is worth paying. If the fee-based consultant is recommending nonsense for 2 hours, why should he be paid for 2 hours? He should be paid NIL and instead the client can asked to be compensated for the 2 hours he wasted on the consultant. It should work both ways.

I have listened to some of these fee-based “consultants” talk their shop before and I really do not agree with their analysis and yet have to pay. As a consumer, I am powerless and it is a waste of my time. That’s why I rather go for free advice. At least, if I don’t like it, I don’t pay.

You are at a foodcourt and before you get admitted the jaga stops you.

Jaga: Mr. Rainbow, you can’t go in just like that. You need to be admitted.

Rainbow: Why do I need to be admitted?

Jaga: You need to consult our dietary consultant first and get a stamp of approval,COE ( certificate of eating).

Rainbow: Don’t I have the freedom of choice?

Jaga: Yes , you do but our dietary consultant must interveiw you first and gather info from for analysis.

Rainbow: I haven’t heard of this before. Why do I need to consult?

Jaga. Mr. Rainbow, you certainly look you need consultation and our consultant can help you with the correct diet. Oh, don’t worry we charge a flat fee. Other foodcourts are charging hourly because some clients are long winded. Don’t you know that it is mandatory to have your dietary habits checked first? It is a new legislation. Have you not read it?

Rainbow: it is getting ridiculous.

Jaga: Oh, no . Our citizens are getting more litigious. We have to play safe and to make sure that you get the right food so that your needs are accurately met and our recommendations are of the best and will not give rise to complications that give you reasons to take us to court. Protection is both ways.

But Mr. Rainbow, don’t worry, our consultation fee is factored into the food that you eat. But if you choose not to let us “implement” our recommendation you may be charged a fee. It is your choice. You have the best deal in town. We waive the fee if you eat in our foodcourt.

Rainbow: I rather eat at the roadside stalls if that is the case.

Jaga: It is your choice. But let me tell you, you risk being fleeced and get stomach upset. That is no warranty. You also risk being rounded up when Ministry of Environment conducts a raid on the stalls. Good luck.

Conversely, the range of financial products in SG is quite limited compared to advanced markets like US. This limits the scope of financial planning advice. People with exposure to financial knowledge, or who knows someone who does, will not need such advice because the financial planners cannot provide any additional benefit over that possessed by these people.

A suggestion. For a fee-based advice, the consultant could upfront show the usual commission charges for whole life policies, and the benefits of paying a smaller fee first. With this common picture, the client may be more persuaded to continue the process.

A personal view. For most people, I think they can also DIY without an adviser. Most of the tips given in Kin Lian’s blog are good and practical. Also, follow the rule-of-thumb in choosing simple products. It is hard to go wrong.

Can you imagine if one should go to an independent mite busting consultant and pay him a fee before he tries to understand your needs and then recommend you to various options and contractors. Perhaps the conversation can be something like this:

Wilfred: Hi, I have a concern with mites in my house, especially on my bed.

IndMiteCon: I understand where you are coming from, we can meet up and we will discuss your problem. Just like to let you know that I am a fee-based consultant and I charge by the hour. We will meet 5 pm at my office next week as I am all tied up this week. See you.

Will Wilfred be interested to go to this Independent Mite Consultant? I think he will prefer the promoter A and her free four hour cleaning demonstration anytime.
At least he will get four hours of highly effective mite removing action instead of having to go to the IMC to listen and pay for advice without getting the job done at all.

I am glad you wrote about this issue. Our partner in Australia have been charging fees for advice for many years already. In Singapore, I suggest you talk to Christopher Tan or Evelyn Goh of Providend. But I have seen their work. Personally, for close to $4,000 for a partial planning I don’t think it’s worth for money.

Just my observation, I do think you sound a bit hao lian like that. :-)

I know I would =)

My concern is we may gradually digress further and further without many of us consciously knowing that it becomes a discussion of insurance, (write selling insurance) from the ignorant vacuum cleaner?

Of course Mr Ling made know that he is such and such, and our Mr Tan’s background is undoubtedly widely known.

If we are not careful in our postings, we may end up ‘inadvertently’ as adertisers or promoters of various products or services in the course of honest contribution of our opinions which are neither clearly ‘black’ nor ‘white’

Thanks folks.