If the insurance business is saturated, shouldn’t Singaporeans be adequately insured by now?

For many people who join the insurance and financial planning business, they are frequently told by their relatives and friends that this industry is saturated, they know of at least 2 or three insurance agents or financial planners, assuming that everyone else is similarly crowded with such people.

The simple truth is that although there are many who join the business, there are more thaty fall out of the business. Since 2006, there is only a 1.2% increase (from 12,841 in 2006) in insurance agents. This is not in line with our population growth and wage increase numbers.

Another interesting fact is, according to national statistics, the average coverage of working adults is only $165,628 marginally up from $118,000 in Dec 07. A study done by Prof David Yee (NTU) commissioned by the Life Insurance Association, shows an average working Singaporean adult will need $495,000 protection against death. This points to gross under-insurance and a huge market for life insurance.

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In the previous article, we looked at the observations of a 38% increase in premiums collected compared to the 1st quarter of 2009.  There are actually two other areas which bears taking a look at in the LIA Insurance Industry Report 1H 2009. Read it all..

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To succeed in the financial advisory industry is in itself a formidable task. It is important that you get off on the right foot, to have a reasonable chance to last the journey. To start with, ask yourself: have you selected the right financial advisory platform or firm for you?

Assuming that you already decided that this is the right career path for yourself, there are 5 key things you need to look at when choosing what financial advisory firm you are going to join. The 5 key things are:

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What are the licensing requirements for Financial Advisers?

Well there are 3 types of Financial Advisory Firms which has different licensing requirements:

1. Personal Bankers are under the Exempt FA license, but personal bankers need to take M5, M9, HI, M8. M6 is usually required to market structured products, bonds & other securities. M7 only if you advise on futures & other derivatives.
2. Financial Planners under Insurance Companies need to take only M5, M9 before being able to market life insurance products or riders without Major Illness or Medical coverage. HI is needed to market with Major Illness and Medical. No need for the rest of the exams.
3. Financial Advisers Representatives (FAR) under Financial Advisory Companies (multi-tied or independent) have the same requirement as financial planners under insurance companies, but require additional M8 to market collective investment schemes. Under M8, the FAR is required to have a basic understanding of unit trusts and other collective investment schemes in order to competently market them. M6 and M7 are optional.

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Globalization and the Information Revolution is rapidly changing economies all over the world. What is the lasting impact on a career in Financial Advisory?

Three significant changes have a lasting impact on how Financial Planning will be conducted in the future.

1. Migration of cheaper labour limiting Income Growth, threatening jobs.
2. Increasing Healthcare costs and Greying Population
3. Shorter Business Cycles due to Fast Government Intervention

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How would you like to get into the right financial advisory group right from the start? I am about to share with you the research I have done as well as my own personal observations.

A quick refresher from the previous article, the financial advisory pie is divided into three groups: personal or private bankers, tied-agents, multi-tied or IFAs. Due to the breadth of products and services offered, they tend to appeal to differing demographic groups, customer profiles, and also require different skill-set to market services to them. Their business models also have different strengths and weaknesses. Read it all..

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“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” - Sun Tzu

Make no mistake. The financial services market is a lucrative and therefore a competitive one. But does that mean that as a new entrant, you cannot compete with more entrenched players?

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How would you like to command an income of more than $500,000 per year? An established financial adviser managing $50m from 50 high net worth individuals (HNWI) can easily accomplish that. A more average financial adviser managing 100 client accounts each $200,000, manages $40m, and can earn $200,000 per year from wrap fees.

Of the three segments of the financial services market: mass market, mass affluent (between $80,000 to $300,000 per year income) and accredited investors or High Net Worth Individuals (personal net worth above S$2m or income above $300,000 per year), the last two represent great opportunities for you to build a profitable financial advisory career and business. Read it all..

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