Is the Financial Industry doomed like traditional media, or will it evolve? The day before I released Money Maverick’s 50th article, I attended a conference that spoke to updates in the insurance and investment market.
Being a specialist in ECI (Early Critical Illness) and Investing, it turned out to be a really good use of my time (even when I wasn’t even that sure what it was all about).
The speaker was witty, and he gave a story which I remember quite clearly talking about the outlook of the Financial Industry.
In translation, there’s two ways of looking at the future of people in my line of work:
1) ‘Make Hay while the Sun Shines’.
This opinion is not uncommon. Tied Agencies have been losing market share per year, but generally market shares for financial institutions have been going down or becoming less concentrated.
To achieve MDRT, a coveted award for sales in the Financial Planning sector, is far easier than it was before because the standard is lowered – presumably because the top 6% of international sales has been measured by a declining performance the previous year on average.
Also, outspoken people have tarnished your reputation before you even begin.
Competition has come from all sorts of creative sources. There are niche insurers which are taking away what were small but important parts of other companies’ businesses - where they were once dominant and the only available, convenient option – their unfocused attention versus a specialist results in a product that is often inferior in that category, and causes them losses.
Technology continues to displace jobs in this particular sector. Plenty of DIY tools and research are available on the internet. Investing was always more prevalent, but you can even purchase insurance online now – in an industry where insurance was always sold and not bought, this is an unprecedented historical change.
Even if they became a polarized monopoly, both Insurance Companies or Investment Companies can still cause their own downfalls. The medical insurance industry in Singapore is notorious for making losses year on year, to the point that today’s current copayment system is required. For investments, people can overplay their hand – and once their credibility is shot, it becomes a negative spiral that leads to inevitable failure.
While a Financial Consultant cannot be legally let go of since they are technically self-employed, declining sales leads to a higher turnover rate. This is even further enforced by higher standards from the company to filter out stronger performers and incentivise them to perform or retain talent, meaning that Consultants who start out slow are also penalized if they cannot meet minimum production requirements to represent certain companies.
It is especially hard for Tied Agents (strictly in my opinion – I admire them more for their choice) although someone in my profession has it bad enough already. Blood is not thicker than water when it comes to money.
With the ability to shop around, compare, negotiate discounts with the company or branch before finalizing a proposal – it is not difficult for me to compare a product on a fair, head to head level and have a price difference in the thousands, or worse, tens of thousands across the premium term period for the same policy value.
You could be the best agent you want to be, but as long as someone can charge a lot less for roughly the same thing – you may never do business. And everyone is killing your business – technology, competition, online resources and even your own company.
So – Make Hay while the Sun Shines.
Because when it sets, you’re done.
2) ‘There will always be Hay. Make the Sun Shine’
The second approach is more optimistic.
Despite generally unsaturation of the market, the top performers are still rewarded at even higher levels than top performers of years before.
As I wrote about recently, even the lowered standards for MDRT will not adjust for the rest of the difficulties presented. Even a one-time MDRT will find it impossible to maintain a lifetime award if not competent.
Competition has created a higher standard in Financial Consultants – where they would be objectively better than Consultants decades ago with the same amount of experience. Such competition has also increased regulations. Both competition and regulations have increased creativity – where Consultants who genuinely strive to serve in this line will come up with creative measures to stay relevant and useful to their clients in the face of such difficulties.
Technology has been an excellent assistor for Financial Consultants for their efficiency – consolidations of policies, expense trackers, projections for shortfalls and future goals, stunning visuals and comparisons across the board. It creates a positive impression and strength of service that is far beyond what used to be a leaflet, a set of forms and a quick drawing.
Such tools also help to ensure that there is reasonable accounting within the organizations itself. Investment returns are transparent and paid out fairly with accountability. Instruments are designed better with a higher likelihood of managing both profits and client interests successfully, creating jobs, convenience and generally building the economy.
Turnover rates are not necessarily poor indications of a failing business model – where others realize that their desire to be part of the Financial Industry may be better served in backend roles rather than poor performance.
Incentives continue to be high. A Consultant is only as good as how efficiently they acquire a client compared to an alternative method. And Financial Consultants still have plenty of reason to be needed – as an authority in a Financial Area that is an uncomfortable topic, as someone who is accessible, trustworthy and where complex questions can be clarified.
Where alternative methods such as aggressive advertising may fail, a comfortable face to face discussion where people can learn from, relate to each other and do business – even on a small level – will ensure that Financial Consultants will always have a place in the world.
Not in the technical skill level, as important as it is - but by showing decent human connection and providing service on a personal level.
So there will always be Hay, but it’s the responsibility of a Financial Consultant to make the Sun Shine. If you are not useful to a client, to the world – you will not have a job.
This is a universal truth of having a job no matter which industry you are in.
Thoughts and Thanks
What do I think?
I am not so optimistic, to be honest. I think that the Consultancy business will be like Newspapers. They will hit a point where they have a much smaller historical base than they did before.
Perhaps that is where Christopher Tan has had tremendous foresight.
When the dust clears (assuming near-complete DIY), only the clients willing to pay for the highest quality, non-conflicted advice will be left (if all sales-based consultants lose their jobs) and Providend will have been a pioneer in this particular venture, as they have been all this while.
Even when it comes to using a product feature to outcompete for a person’s business, there’s a tinge of guilt.
Yes, there’s more benefit to the client. But I also knock out someone else’s income. It’s not a good feeling, but not poor enough that I would not put myself first if my service is better.
Ultimately, who knows what the future holds. I really know nothing except for this - much like what happens when Financial plans go awry, stubborn people get creative when you push them into a corner.
…And I am a stubborn person. If only a few newspapers are still successful today, I want to be one of them.
Money Maverick hit its 50th article last week. Prior to that, we had less than 150 organic views on average, we now have about 4 times that. I am not flawless. But clients have been generally happy.
It’s not a lot, but people are reading this because they want to.
That's a miracle in itself. That makes me really happy and fulfilled.
The blog is really the result of years of hard work in the background. Much like Budget Babe, it takes a certain boldness to call yourself a name. And Money Maverick is who I can confidently say I am, without it sounding completely ridiculous.
Working in this line has not solved my lack of social skills. I am socially inept. I still continue to unintentionally alienate both large general groups of people as well as potential clients.
And quite frankly speaking, I’m not even doing that well yet (no MDRT).
But I am thankful that I can find something that I am passionate about where I can wake up positive about going to work. As for how long I can keep doing this…Well. I continue to get creative as I get backed further in.
And I would not have room for my creativity without you guys.
I would really like to thank the following, of which it would not be possible for this blog to exist, for me to do a job I love so much and to contribute more to the world than I thought was possible for a mere B-minus student, B-plus athlete like myself who is easily the least in his family.
To Jesus Christ, My Lord and Saviour: For which I can do nothing without. Through some months where I had a hundred dollars to spare and felt like giving up, you kept me healthy and alive and hopeful. Depending on you is all I can do.
To my Family: For being supportive even in an industry where the turnover rate in the first two years is over 80% and continues to fall till the 5th year.
Thanks to you, I have become a statistical anomaly. I have never been in the top 20% for anything I considered really important in my life, and this is important. Your premiums are not huge, but the warmth I can come back to on my worst days is priceless.
To my Clients: For which none of this would be possible – I am always impressed by your faith in me. Sometimes it is clearly far beyond my means and it motivates me to live up to the hype. Your questions are crazier and crazier and ¾ of all these articles exist because of you.
I have a job I love because of your faith: and I can’t promise not to fail you, but I can always promise to do my best and be accountable in my failings.
To my Colleagues: For dealing with my weird office behavior, idiosyncrasies, endless questions on topics. For the free rides back home, drinks, staying long hours, discussing and sharing freely and generously. For the laughter and the place I can also call home.
Most importantly – for my ethics and a culture of ethics. Whenever I am tempted by greed or ego, I also feel secure knowing that you will set me on the right path.
To the Money Maverick Team:
Samantha’s organizational skills, disciplined work ethic, writing/moderating – you are missed.
Vinod, for your loyalty and tech expertise, and especially for coming up with the ‘Money Maverick’ moniker. We are an actual brand now. Money bleeping Maverick. Wow.
Brice, for selflessly contributing your designs because you have faith in me and my work.
All of you - I am so proud and privileged to have the benefit of your service. It is more than I deserve.
To my Readers and Critics: For which you continue to demand quality from me. I look forward to the day you drop me a message after months, even years of showing you what I can offer.
Even for the people who tell me you trust me, you’ll buy from me, you believe in me - and suddenly leave without a word – I learn because of you. I learn to make sure there are less of you by being a better consultant tomorrow.
Lastly, To my Girlfriend Manow, who inspires me and humanizes me. Without you, I would be an aimless robot with no ability to relate to people.
Brice has done some incredible designs and the upcoming months; the Blog and Facebook will continue to reflect my approval on these changes.
Vinod has also been working very hard – and both of them are available for hire, if you are interested in people who can help you promote your media, do filming, website design.
These are Brice's professional and methodical product designs, such as these - which we will be implementing some across the next few months:
I really hope you like the designs, and do let me know what you think below. If you liked the designs especially much, do contact Brice, who is just excellent at his job.
In the meanwhile, thank you for all your support.
I look forward to the next 50 articles.
As one of the Top Financial Bloggers in Singapore (Feedspot, Withcontent.co), I would be happy to answer any emails and questions you may have, as I have been doing for my readers over the past few years - especially about Insurance and Investing, as it is my forte of personal and professional knowledge.
If you have any such questions about the articles and how it may apply to your finances, you can feel free to leave a comment, or drop a message through any preferred medium (if you prefer privacy).
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Money Maverick is a Licensed Financial Consultant with MAS, who specializes in Investments and Critical Illness Insurance.
The views on his blog are strictly of his own opinion and have no affiliation to any of the companies he works with.
Here are some of my resources on:
3) Retirement and Leverage: Leveraging a Private Annuity, Pros and Cons (ft. Jamus Lim)
4) Spending and Saving: The Biggest Spending Mistakes You DIDNT Even Know you were Making (and how to avoid them)
5) Job Assessment: A Case Study on How a $6k/mth GIrl makes MUCH more money than a $10k/mth Guy
6) Financial Optimisation: How I Avoid the Largest 'Fees' of All
For Brice: +65 9272 3919 For Vinod: +65 9231 0490