Guest of Honour, the Honourable Mayor, Central Singapore District, Mr Zainudin Nordin,
Representatives of MAS,
CEOs of Insurance Companies, Fund Managers and Financial Advisers,
Presidents and Representatives of Associations,
and Participants

On behalf of the Association of Financial Advisers Singapore, I would like to welcome you to our 5th Annual Congress and hope you will find these two days pivotal in your life and business.

The theme of this year’s Congress “Championing Clients’ Interest” will, no doubt, resonate in your hearts, as it does in mine.  It is important to go back to the fundamental basis and reason for our being in the financial services business, which is to serve our clients and to uphold clients’ interest first.

For many of us who have set up our own independent financial planners and advisers firms, it was this lofty ideal that spurred us on to sacrifice vast sums of money and many months of painstaking work to start afresh.  As we seek to grow our business further, we will, no doubt, face many more challenges to put clients’ interests above our own.  I hope you will find constant inspiration and the gumption to press forward in this worthy cause.

In our midst, we also have many practitioners who have also sacrificed much money when they left tied agencies to become licensed financial adviser representatives.  They have taken the road less travelled, but it is the right road built on high moral and ethical grounds.  We salute you for your bold move, and we know that you will be vindicated.  It has been said that there is no power which can be compared with that generated by an idea whose time has come.  The time has come for clients’ interest to be not only paid lip service to, but life service as well.  Companies and practitioners must put in place business models and practices that put clients’ interest first.  Although the typical Singaporean has become more financially literate, the vast majority still do not know enough to take care of their financial needs and interest.  They need a champion.  They need us, Financial Advisers, to be their champion.    Are you willing to be their champion?

To be able to champion clients’ interest, an adviser must not only be able to give professional and competent advice through a thorough financial planning process, but also be able and motivated to provide the best available products and service.  As far as the process of planning is concerned, all practitioners who are prepared to adopt best practices can qualify.  However, in the area of providing products and services to meet clients total financial needs, only the truly independent firm that is able to source the market can provide the required choices.  The licensed FA is, by many accounts, the model which best meet clients’ interest.

The  Financial Advisers Act allows for the establishment of FA  firms which can operate as independent FA firms and able to source from multiple product providers for life insurance, general insurance, group benefits, unit trust and other investment products, including foreign products.  So far, more than 50 firms have been licensed, housing more than 1,300 representatives.  While the tied agencies force declined by about 1,000 in 2005, the number of FA Representatives has increased and is expected to increase further.  The total market share of FAs is now about 5 to 6 per cent for both life insurance and unit trust, and this is expected to increase each year.  The increase could be even greater and faster if we put our act together. 

What can we do as an association and grouping to do better for our clients?

Firstly, FA firms still lack visibility.  We must make concerted efforts to engage the media to inform the public, especially the working population, of the advantages of using FAs.  To this end, we will conduct a survey through NTU to understand public perception better and implement measures to project ourselves more effectively.

Secondly, the FA scene is more fragmented than united.  There are firms and individuals who have pulled together and contributed much to association work and to enhance the cause of FAs.  I would like to thank these for their labour of love.  But we still have companies which are not members yet and which are not pulling together with the rest.  We may have different models of business and strong convictions, but we must recognise that we also have common interests to further the cause of FAs and to champion clients’ interest.  It has been reported that the banks and, I am sure, the insurance companies, hope that FA firms remain as niche players only and not rival them.  In other words, they wish we remain small and not touch their turf, or disturb their clients’ psyche.  As individual firms, it is hard to make a difference.  But as a united force, we can make our winning business propositions more well-known and carve out a bigger market share.

Thirdly, there are threats to our success and survival which we can tackle better as a united group.  Some Product providers will try to go direct to clients and a few may continue to exclude the FA channel.  The answer to this is for us to go direct to clients to spread our cause that we are their champions who offer them true value and service.  Clients will demand choice when they know they will benefit from making the right choices.

As we seek to champion client’s interest, we have to spare not just a thought but to do what we can for those who really need our advice and service but who are not able to pay for it.  I’m talking about our citizens in the lower economic classes many of whom need financial counselling to manage their lives and finances better.  As you have read, there is a widening income gap even though the average household income has risen.  The AFA Executive Committee is considering seriously how the Association and their member firms and Representatives and staff can contribute to our citizens.  We have entered into discussions with the Central CDC and I am pleased to say that there are a few initiatives that will be followed up.

On behalf of the AFA let me thank the honourable Mayor, Central Singapore District, Mr Zainudin Nordin, who has graciously consented to be our Guest of Honour.

Before I hand the stage over to him, in closing, let me thank all who have put this Congress together, especially the Congress Committee, and all platform speakers and workshop leaders.  A special word of thanks goes to our sponsors, especially AXA our Platinum sponsor.  Let me also wish all participants and fellow practitioners a wonderful and rewarding career.