In this economic down turn, many financial advisers are finding it hard to earn a living. There is no price guessing that probably the largest retrenchment that is taking place comes from the financial services. This is not a surprise since the heart of today's economy crisis is due to the financial bubble bursting. Yet the hardship that existing financial advisers face has been aggravated by a long-term problem that the industry has been facing – which is the skill and knowledge taught to financial advisers have been wrong all these while. To add salt to the wound, most regulators in the world and in Singapore have largely ignored this wrong idea.

Traditionally, financial advisers have been taught this: That the purpose and duty of a financial adviser is to do prospecting, get an appointment, make a presentation and close a sale. This 4 steps purpose have been taught in almost every sector of the financial services industry. Whether the person works as a private banker, life insurance agent or an independent financial adviser, all of these advisers have been taught these 4 steps. These 4 steps come in different favors but the underlying principle is the same. I know many people hate me saying this but these 4-steps actually outline the duty of a salesperson. To make things worst, many customers of these advisers have accepted these as norm and anything out of the ordinary is considered extraordinary. Since the job of the a financial adviser has been defined as a salesperson, it is only natural that in this economic downturn, these very same advisers found themselves to have zero sales now because customers do not have much spare cash to purchase products. As the saying goes, if there is no sale there is no earning.

I would like to ask existing financial advisers this question – why have you considered your job as a sales job when what you do has a long-term impact on your customers' live? Unlike traditional sale which is unlikely will have significant long-term impact on a customer life, a financial advisers' job has a very long-term impact on the customer life and often its impact are felt by his descendants. Take for example, when a person buys a TV for $1000 or $5000, there is no material long-term impact on a person life. Yet if a person who was mis-sold an insurance policy will find that his children and wife will have to suffer the pain when the insurance policy do not pay when it should.

If you look at all professional qualifications, what are taught in those courses are completely different from what are taught by the insurance companies, banks and FA firms. It seems that there is a world of difference between the academic ideology and the “real world”. The “real world” is that advisers are taught to be salesperson while the academics consider advisers to be financial doctors. In fact, it is not necessary to look so far at these professional qualifications to realize that there is a large valley in ideologies when you look at what our regulator's prescribed examinations namely the CMFAS to realized that what the students learn from these texts and what they will be taught by the industry are worlds apart. It has been said that a person will not apply 90% of what he learn in school. This seems to be true for these CMFAS examinations. If advisers apply all they have learn in the CMFAS examinations, they will realized that an adviser's job is never about prospecting, appointment making, presentation and closing that sales. If these were so important, why there is no topic on prospecting, appointment making, sales presentation and “how to” close that sales in these examinations? I don't remember it in M5, M8, M9 and HI.

I believe that the industry continue to be held hostage by its own doing. When advisers join a firm, they do not know how to go about in their business and thus they will learn from their seniors who were in turned trained by their seniors who ultimately come from the “old era” of yesteryears who only knew how to make a sale and nothing else.

While many of these academics considered financial advisers to be financial doctors, this probably remain an ideal for a long time to come. What is a financial doctor? There are only two types of patient who need to see a doctor – they are either sick and hence require treatment or are not (yet) sick but would like a seek preventive treatment. There is some similarities to lawyers as well. There are only two type of clients who need to seek legal advice – either person who is legally in trouble or who merely wants legal advice to prevent trouble.

A financial doctor only have two types of clients – a client who is financially in trouble or a client who requires preventive measure to ensure financial trouble is avoided. In this industry, I believe very few clients have met a financial doctor. There is a few reasons why and these are:

• Ignorance – if clients think that financial salesperson is the norm, they will not look for a financial doctor. In fact, if they do come across a financial doctor, they would reject it thinking that a financial doctor is not a norm. The financial doctor will thus be discouraged from such practice.

• Confusion – only the words “financial adviser” is a regulated phrase. The words “financial planner”, “financial consultant”, “wealth manager” etc are completely unregulated. My 7 year old son can call himself “financial consultant” and still can get away with it.

• Low entry barrier – any tom, dick and harry can become a “financial adviser.” The prescribed exams are not difficult to pass. As long as a person can see, add 1+1=2 and reasons that the sun will rise again when it set, he can pass these examinations. Moreover, most firms will allow the the adviser to start meeting clients after undergoing a couple of weeks of training. Some lousy firms probably don't even have that. These low barrier of entry means two things – it means that this industry will not be attractive to the brightest individuals and secondly it meant those who are already in the industry have to compete with a large pool of advisers.

• Problematic renumeration – it is my strong believe that an adviser who is purely on commissions-based cannot call him or herself a financial doctor. Reason is simple. Those clients who are financially in trouble often need solutions that are not product-based and thus there is no commission to earn. For those clients who seek preventive “measures,” often good solutions and products earn little or no commissions at all.

The concept of a financial doctor is nothing new and is not a new invention recently. This concept is written in all the examinations. Just look at a Module 5 and Module 8 and HI. Just look at CFP and ChFC. It is written in almost every page that the duty of the adviser is to solve other people's problems, never a salesperson.

The duty of the financial adviser and financial planner is not about prospecting, making appointments, making a sales presentation and closing a sale.