Financial Advisor Job Review – My personal experience

Financial Advisor Job Review – My personal experience

Financial Advisor Job Review – My personal experience

Looking for a career change to join the Financial Industry in Singapore? Are you deciding whether you are suitable to be a Financial Advisor / Consultant?


Overview: A rewarding career if your passion is to help people in their finance planning. Requires a lot of hard work and perseverance as you will face with rejections. Prepare a saving of least 3-6 months of expenses before you switch career.


Financial Advisor Job Review by Edmund 

Recently, a good friend of mine asked me for advice regarding switching career to be a Financial Advisor. I am inspired to write a review on Financial Advisor Job because I think this is a good topic to share in Value Creation . Profit.

Being a Financial Advisor/Consultant is also a possible route for some to achieve financial success and escape from the Rat Race.

I have asked myself the same question back in 2005 when I was looking for a career change to join the Financial Industry. I was seeking advice from the people in the industry then too.

After hearing all the advice and much consideration, I finally jumped ship from my 9 to 5 career and became an Independent Financial Advisor. I was in Financial Advisory job for almost 4 years before I left the industry due to personal reasons.

I hope to share with you some of my experiences during the 4 years and some thoughts when I was a Financial Advisor and hopefully I can help you make a better decision before you switch career.

 


3 Types of Financial Advisor/Consultant

Financial Advisor/Consultant with an Insurance Company

If you are a Financial Advisor with an Insurance Company such as Prudential. You are most likely able to recommend products created by the Insurance Company.

Financial Advisor/Consultant with a Bank

If you are a Financial Advisor with a Bank such as DBS. You are most likely able to recommend products created by the Bank and sometimes products from another Insurance Company which both parties have agreement on business dealings. DBS used to recommend AVIVA’s products.

Financial Advisor/Consultant with an Independent Financial Advisory (IFA) Firm

If you are a Financial Advisor with an IFA, you are able to recommend any products from any Insurance Companies, Banks and Investment Firms. You are less likely to be biased to any products but to recommend the most suitable one that your clients need. There are many IFA firms in Singapore, some of the prominent ones are IPPFA, PIAS, and Providence.

 


A little about me…

ippfaI was an Independent Financial Advisor with IPPFA Pte Ltd, an IFA firm headed by Mr. Wee Tiong Howe.

IPPFA has a good research platform where the company hires top investment and insurance analyst to do research on the financial markets. There are regular seminars and training on the latest insurance and investment products. As an Independent Financial Advisor, I can leverage on these training to keep myself updated with the industry.

There are many teams (branches) within IPPFA, each headed by a branch manager. I was fortunate that I was with a dynamic team within IPPFA, with their guidance, and my hard work, I achieved Chairman Round Table Award for 3 consecutive years from 2006 to 2008. I was invited to attend Chairman Round Table Conference with other award winners in various countries such as Vietnam, Shanghai, and Australia Gold Coast respectively.

In my 4 years as an Independent Financial Advisor, I met many people and learn so much from them and their life stories. I am sincerely grateful for their trust and confidence placed with me then. I feel really sorry that I could not be with them longer and have to leave the industry.

Before I left, I entrusted my clients to a senior manager in the branch and ensure my clients that she will take good care of them. I did receive feedbacks that she has attended to them well.

 


What is needed to be Independent Financial Advisor/Consultant?

Qualification

  • You must be 21 years old or older and possess at least 4 GCE “O” Levels or equivalent.
  • You must pass all relevant examinations from Singapore College of Insurance (SCI).

There are 4 main papers to be completed from SCI, namely:

  • Module 5 – Rules & Regulations for Financial Advisory
  • Module 9 – Life Insurance and Investment-Linked Policies
  • Module 9a – Life Insurance And Investment-Linked Policies II
  • Health Insurance Module

Depending on the companies that you are with and the products that you are recommending to your clients, you might have to complete other relevant Modules such as:

  • Module 8 – Collective Investment Scheme
  • Module 8a – Collective Investment Scheme II

For more information, you can refer to SCI.

License

If you work with an IFA firm, you are required to apply for a license to be an Independent Financial Advisor. However, if you work with a bank or an insurance company, you may not require to having a license. It is best to check the details with your company.

You can also take a look at FINANCIAL ADVISERS ACT or FAQ for details.

Income Tax and CPF Medi-save

You are considered a self-employed when you become a Financial Advisor. You have to declare your Income Tax as self-employed and it is mandatory to contribute to your CPF Medi-save account. It is best to approach your company’s admin to seek advice on how to declare your tax and contribute your CPF Medi-save.

Keep all your receipts when you are out to meet your clients as these receipts can be used to claim for your entertainment expenses.

 


Be mentally prepared

3 – 6 month savings

Most likely for the first 3 months, you are actively looking for customer and may not have income unless the company is paying you a basic salary.

Recently, many Insurance Companies are offering basic pay as an incentive to recruit new Financial Advisors. If they are paying basic, usually between SGD1k – SGD2k, do take note of the terms and conditions carefully. E.g how much sales you must make to get the basic or must you return the amount you received once your commission is in.

Calling Warm Market

Warm Market here refers to family members, relatives, and friends. Most likely you need to consider approaching your warm market initially to sell your services and prepare to face many rejections and maybe lose one or two friends.

But if your objective is helping people with their finances, rejection might not be an issue to you if you focus on your goal.

Calling Cold Market

If your warm market dries out, you have no choice but to start approaching the cold markets. You might have seen many Roadshows inside MRT stations, shopping malls or even during IT show.

Roadshow is one of the avenues to approach the cold market. Some resort to cold calling methods by randomly calling numbers from a Yellow Page Directory.

Personally, I had not done both during my 4 years as an Independent Financial Advisor. I relied mostly from referrals that my good clients passed to me. Getting referral is a better approach as a referred client usually has a higher level of trust and confidence in you, even before they see you in person.

Thin line between Angel and Devil, be true to your client

AngelDevil

Plan to help your clients, not to help your own pockets. I know that many Financial Planners recommend high commission products to their customers even though the customers could have cheaper and better alternatives.

This is a very thin line between wanting to help your clients and earning your bread and butter. I recommend be true to your client and create values for them. They will eventually appreciate that you are trust worthy, and refer their family and friends to you. Isn’t this a win-win approach?

Office Politics

In this competitive industry where everyone is reaching out to win their own clients. Be very careful not to involve in the office politics because this can hurt your business in many ways.

Be wary of the negative people around you and avoid them as much as possible. Make friends with positive personnel and they may influence you to perform better.

Need New Businesses regularly for Constant Income

In this industry, your monthly income is generally not fixed (not considering the basic pay, if you have any). It all depends on how much effort you put in to acquire new clients every month.

You need to have new clients regularly so that you’ll have a consistence income stream because the commission is paid out generally in such arrangement, assuming you sold an insurance product with annual premium paid by the client:

  • First year – 50% of commission
  • Second year – 30% of commission
  • Third year – 20% of commission

So you can see that by having new businesses regularly, your income will grow consistently. This is also why many people are attracted to this industry due to good commission paid out.

Also do take note of the resignation clause when you join the company. In case you are leaving the company due to your own reasons, are you still able to get your commission paying out 1 year or 2 years later?

 


Career Progression

If you are a top performer in your company, high chance that you’ll be offered a managerial role. As a manager, you can recruit your team members and earn over-riding commissions from them. Meaning the company will pay you a certain percentage of extra commissions over the commission earned my your team members.

This over-riding commission system is to encourage the manager to recruit more team members (= more sales for the company) and reward them for training the team members in financial planning, marketing and sales of products.

As a manager, your time to service your existing clients will reduce. Needless to say, you will have less time to source for new clients. You will spend a lot of time recruiting, coaching and mentoring your team members. You will think of ways to motivate your team to achieve a sale target set by yourself and the company. Thus the over-riding commission is going to be a bigger percentage of your annual income.

Some would choose not to be a manager simply they like to work alone and not wanting to committing time to recruit and train other people. In exchange, they can focus on servicing their existing clients and source for more new clients.

 


Career Quiz

I hope what I have share with you so far do shed some lights in your decision to be a Financial Advisor. It is also good to understand yourself by taking this career quiz I found quite useful, from an American’s Financial Advisory Website.

After all, not everyone is suitable in this industry due to different personality and values in the life of each individual.

 


Do not like Sales, Networking jobs?

If you are more of a person who like to work alone and do not really like highly dynamic jobs like sales where you really need a lot of networking skills.

Building an Online Business might be an alternative to you.

I turned to Wealthy Affiliate University to learn about Internet Marketing after I had thoroughly researched on the ways to make money Online.

An Online Internet Marketing Businesses could generate multiple passive income stream. A great potential for one to achieve Financial Freedom.

>> Check out my Wealthy Affiliate University Review Here <<

 


Final Piece of Advice

Focus on Value Creation, Profit will follow eventually.

To be successful in the career as a Financial Advisor, always put your clients first when recommend financial products that fits their needs. Always remember, create values for your clients and when they feel your sincerity and professionalism, they will refer their family and friends to you.

Not an easy career in the beginning, but as you strive through the first 1,2  years things will start to get better.

If you have any questions, feel free to ask in the comment below.

 

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