3 Ways A Relationship Can Sour in Professional Financial Planning

Purchasing insurance can be quite a scary affair. After all, you’re putting a part of your hard-earned money into protecting yourself from an event that may or may not occur.

Given the fact that clients and their financial planners have to maintain this professional relationship over a long time, it is inevitable that there is a chance that the relationship can sour. How so? fundMyLife explores various ways how things can go awry in client-planner relationships.

Financial Planner Quits

It’s hard being a financial planner in Singapore. Turnover rates are extremely high because of the sales-oriented nature of the job. Apart from the general public’s wariness of financial planners, it’s also quite demoralising to see a low salary for the initial part of the career.

In our own data analysis of LinkedIn profiles and personal accounts from our network of friends, attrition rates are the highest in the first two years. What does this mean for the consumer? It’s a classic story for a client to purchase a policy from someone, e.g., a friend fresh in the industry, and the friend happens to quit afterwards.

In such a case, the client is then left hanging after the company assigns him/her random planner. It is understandable why adopter planners are hesitant to take up orphaned clients. There is little incentive in servicing clients whom you do not earn commissions from. However, it is also heartening to find that there are planners out there who choose to take these orphaned clients out of duty to their calling.

In addition, unless the adopted client makes the effort to contact the assigned planner, the next time he/she requires the help of a planner it’d most likely be when it’s time to make claims. It’s a pain for both the consumer and the financial planner as both would be meeting under times of crisis, e.g., an accident or illness.

Financial Planner Goes to Another Company

Good financial planners are hard to find, and talent recruitment can be quite aggressive. In June 2016, 200 out of 400 financial planners from the Peter Tan Organisation – one of Prudential’s largest group of agency units – resigned, with a group of them joining Aviva’s financial advisory firm. In Sept 2017, around 300 financial planners from Great Eastern joined AIA Financial Advisers.

Under such cases, either of the two things can occur. The first case is the same as a client’s personal financial planner quitting, i.e. be assigned another financial planner from the company. The second case – various government and consumer bodies have expressed this concern – is when the jumpshippers convincing their clients to drop their original plans from the old company and buy new ones from the jumpshippers in their new companies to fulfill their quota.

Bank-Insurer Relationship Ends

Ever received a call from your bank, asking if you were interested in their insurance? That’s bank insurance, or bancassurance, right there.

In theory, bancassurance is not a bad idea. After all, you get both banking and insurance done at the same time. However, what happens when the partnership ends? A member in the Insurance Discussion Group, Chan KH, commented that in these partnerships the bank acts as an agent. The banks work as distribution channels in this partnership, offering bank clients insurance products as well.

Once the partnership ends, the insurer will then take over the portfolio of business servicing from the banks and assign the client to an agency or a group of financial planners. He also recounted how his own client messaged him about a Prudential plan he bought via Maybank in the past; it was not performing, but since the partnership ended the client had to call Prudential itself to inquire more.

Is it all terrible? Not exactly. Especially if you don’t sweat the details and would like to get all of your finances done at the same time. In addition, banks like DBS are getting innovative; DBS incentivizes consumers to purchase/transact their insurance under the DBS Multiplier account to enjoy higher interest rates (we wrote an analysis on it, btw).

You just have to be prepared to be on your own after the bancassurance partnership ends.

What Should I Do As A Client?

If you find yourself under such cases, the best thing you can do is make sure you make contact with the person who is in charge of you as early as possible. Responsible planners, upon leaving the company or industry, will do a proper handoff to the assigned planners. However, in the case of sudden disappearance of planners, your best bet is to contact the main companies’ offices to find out who your assigned planner is.

Hindsight is 20/20, but for those who haven’t found a financial planner yet, it’s important to engage someone whom you know will stay in the industry for a long period of time. Where to find such responsible planners?

At the risk of tooting our own horns, fundMyLife takes pride in conducting numerous quality control measures to ensure that the financial planners that join us are capable, credible, and client-oriented.

If you find yourself in a rut or have a burning financial planning question, come to our site and ask away!

fundMyLife is a platform that aims to empower Singaporeans to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions.

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