Why would anyone need a financial adviser? I don't think anyone need an adviser unless there is a need. What kind of need justify seeing an adviser? Sometime the "need" is obvious like a divorce, separation or death of a sole bread winner. In such cases, major financial impact can be felt and so a financial adviser is engaged to look into the matter. At other times, the "need" may not be so greatly felt but it does not mean unimportant. For example, most people do not care about retirement planning. With proscrastination it means that a retiree cannot stop working if there is not enough retiremnet funding. If health is not good, a significant downgrade in standard of living has to be done. Thus, certain probloems may not be so obvious initially but it can become an atomic bomb later.

The role of the financial adviser is a financial doctor. If the patient is not sick, why would anyone wants to see a doctor? There are times when a person is seemingly healthly but would still opt for a comprehensive health check (once perhaps every 3 years) as preventive measure. The idea is to detect unknown problems before it is too late.

Similarly, the financial doctor is required when there is a financial problem. If there is no financial problem, the client should sitll opt for a financial health checkup once every few years as preventive measure. Such approach in financial planning is rare in Singapore because many advisers join the industry thinking they are salesman and because they think and behave like one, naturally consumers think they are one. Sometime financial advisers uses various sales technique to earn a living because consumers do not bother about financial planning. Some of these sales technique has proven to work even on consumers who are not keen in purchasing financial products. For example, a simple technique like the rule of law of large number says that if you do cold-call to large number of people, there is definitely a chance to close a say. Maybe need to call 1000 and someone silly will buy the idea. It works and it will continue to work. So many advisers uses such techniques to sell. There are many other ways of selling. I heard of ways which top salesman can really sell life insurance to a person who does not believe in it. Truely amazing.

Now let's talk about concrete examples of financial planning. I have a real life case which a client called me to meet because of drastic change in her life. She is undergoing divorce due to a husband's unfaithfulness. She cries everynight, require anti-depression medication, undergoing counselling and constantly on MC due to depression. I was called in to look at a her financial situation in view of a pending divorce. A particular problematic area I found was the joint property. The mortgage was taken up in joint name. As a private arrangement between herself and her husband she had "top-up" her share of her debt to the extend of paying off all her debts. Unfortunately the bank still consider her liable for outstanding debts. She needed proof that she paid "her part" of her debt from her own money. Apparntly those evidence are not available. So this may cause an ugly legal lawsuit. I am trying to work on getting the required evidence for her. So this is one financial planning case.

Another kind of case is a businesswoman. In such situation, the exposure is potential lawsuit by various parties like regulators, customers, competitors and sometime even shareholders! Also as bussiness person would usually need to take some risk and if that risk does not pay off, bankruptcy can happens. Therefore a financial plan to protect assets from creditors is important for such groups of people. Actually professionals are also at risk of losing all their personal wealth through lawsuit. Some professionals are covered by insurance in the even tof lawsuit but no insurance can completely eliminate such risk because all insurance contracts contain exclusions and a sum assured.

For me, the financial doctor is a noble occupation. Financial doctors must not position themselves as salesperson and consumers must respect finanicial doctors for the work they do. I hope the industry will improve its image and raise the level of competency. I also hope that consumers will select their financial doctors seriously.

(Pardon the numerious spelling errors. Typed this blog whenI am failing asleep!)