There is a saying, that “diversity is strength”. While this is true on many fronts, can we say the same financial planning and insurance? Throughout our lives, we inevitably meet a lot of financial advisers, and there is always a question of whether to engage more advisers. This is especially true when we move from one life stage to next. In this article, fundMyLife explores the pros and cons of having just one financial adviser for financial planning.
Pros of having just one financial adviser
#1 No need to repeat yourself
Having just one financial adviser, especially if he/she is great, is all you need. He/she understands all of your financial needs and advises on suitable products. In this case, you do not need to keep repeating your financial situation to different financial advisers – it can be repetitive and tiring. Furthermore, if you have just one financial adviser, you just need to update him/her in cases of changes in life stages, e.g., life stages, occupation, financial situation, etc.
Furthermore, if you have any private matters you do not wish to talk about often, it’s easier to have a single person to handle everything. The less people know, the better.
#2 No redundancy
While being under-insured is a big problem, being over-insured is also an issue that is less discussed. Being over-insured poses a problem because you’re paying more than you should, limiting cash flow for other purposes like investments. This happens commonly when you buy policies from multiple people, who are not aware of what existing policies you have. Typically, the policies you own sit in drawers, untouched for a while. This is worse when you get them for reasons other than personal, e.g., to “support” a friend or family who has gone into the financial planning industry.
By sticking to a single financial adviser, you avoid this possible redundancy. Speaking of being over-insured – you do not want to be in a situation where you’re more valuable dead than alive to your dependents.
#3 Single point of contact
Picture this: you bought a life insurance from A, health insurance from B, and a personal accident policy from C. After that, let’s say you get into trouble, e.g., accident, sickness, etc, you’d have to recall who can help you with your incident. During claims situation, you’d want a single person who has access to your entire insurance portfolio. The last thing you want to do when disaster strikes is needing to figure out handles which policy.
Cons of having just one financial adviser
#1 All eggs into one basket
While having a single point of contact is convenient and useful, it also exposes you to risks as well. For example, a common issue consumers face is their financial advisers leaving the industry. Your policies would become orphan policies, a term that refers to policies without any servicing adviser. At best, if your adviser is responsible, he/she refers you to a reliable colleague. At worst, you’re left hanging and when it is time to make claims you’d have to take extra steps to contact the representative the company assigned to you.
Another possible risk is that your adviser becomes unwell and has to take a break from his/her job. It would be a bad timing if you need to make your claims during their downtime.
#2 Limited range of products
Unless your financial adviser is from an independent financial advisory, your choice of plans depends on the company your adviser is from. As such, it might not be a bad idea to engage multiple advisers to obtain specific products from different companies. With apps such as PolicyPal, IOLO, and TrueCover, it’s much easier nowadays to keep track of all your policies.
However, this does not imply that sticking to one company’s products is a bad thing. Products are competitive across the board. Most of the time, the differentiating factors lie usually in gimmicks. For example, wellness programs like AIA Vitality, or partnerships between Prudential and genetic testing company MyDNA. On a related note, the debate of tied adviser vs independent financial adviser is a completely separate issue, which we will explore another time.
Ask fundMyLife financial questions today!
With this article, we hope that you have a better idea of how having just one financial adviser can be a boon or bane. However, no matter whether it’s just one financial adviser that you engage, or several of them for different products, it’s definitely way more important to have the ones you can trust.
If you want to engage more financial advisers, or if you haven’t found the right one, why not consider advisers of fundMyLife? You can head on over to fundMyLife and ask our pool of financial advisers questions. Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.
Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.
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