- The Last Days

The Last Days

Written by Wilfred Ling

Saturday, 31 January 2009

I am not referring to the “end of the world” but rather this Chinese New Year period represents a rather gloomy period for many because of lost of job during this period.

On the 4th day of CNY, I received a SMS from my daughter’s school bus auntie that she is no longer working with the school bus company and that someone else will take over. It seemed that she was retrenched.

On the 5th day of CNY, I have to say goodbye to a regular drink store at my office because it was their last day of work. I patronized that drink store almost every day. I would visit them in the afternoon for a tea break. This is especially so after meeting a client in the office, I’ll take a break by buying a cup of coffee and a toastie. However, 30th Jan was their last day. The owner did not have any concrete plan on what to do next and all the workers have yet to find another job. I was sad that I no longer will see them and also sad that none of them have found a job. I was glad that I could buy a cup of coffee and my favorite sardine toast that day. While I was still drinking my coffee, my wife called and complained that my daughter’s school bus arrived at our home late by more than ½ hour. My wife was furious that we were not informed of the change in schedule and we were worried that something had happened to my daughter. The school bus was late because it had to fetch many kids. Apparently the school bus operator decided to reduce to 1 school bus instead of previously 2 buses (not too long ago they had 3 buses!). They cited that it was more economical to use one school bus (meaning: cut cost). This implied that they have fired those redundant staff. No wonder the school bus auntie was retrenched. After I hung up the phone and when I was about to go back to office, I saw someone waived at me. She was very familiar – was she my client? My neighbor? A relative? Who was it? Goodness…. She was my daughter’s class teacher!! What a coincident! Apparently she was at Keypoint with her husband for a meal. Her last day was on the same day too (we knew she was leaving). So I took the opportunity to ask her about it. Apparently, 4 teachers in the school have also left! Goodness, I wanted to faint.

In today’s Straits Times, it was mentioned that financial services sector was one of the first to be hit by the lost of jobs. But I want to say that this is particularly so for financial advisers who were earning a living out of selling products. Obviously in economy downturn, people with a tight budget will not want to increase their expenditure buying new products. Even we would to tell them the importance of protection planning, it is not easy for them to increase their expenditure. For the past few years, many financial advisers and banks have been earning lots of money selling investment products such as unit trusts and structured notes. During the economy crisis, nobody wants to buy these products. So logically without any sales, the salesperson must be retrenched. That is exactly the problem with the financial service industry as it has focused in sales of products. It had positioned itself like a retail sector of selling clothes and electronic goods and services. To add salt to the wound, many advisers were mis-selling and mis-representing their products.

For the minority of advisers who have been in the business of problem solving, this is probably the best time ever. There is no “competition”. Other salespersons are unable to close any sales and there is nothing in the equity market to be attractive enough to distract the client. In fact, many people are in trouble – financially. Those who has lost jobs have found problems with their cash flow and net worth. Those who has bought useless rubbish products have found their cash flow negative because of huge regular premium. Those clients who did not do proper asset allocation for their investments have found their investment to be near zero (yes – there is no secret that some well known investments have return -100%) These are problems that require a problem solver. Financial advisers who are problem solvers are in for a good time.

This month (January 2009), I had a comprehensive financial planning case. What was unique about this was that for a typical profile of this client, financial planning for him and his family should be very simple. But it turned out to be quite a different story all together. Apparently for more than past one decade, he had quite an “active” insurance agent who had been selling him products. When I met this client, his insurance was costing him a whopping $27,000 annual premium covering just 3 persons in the family! There were at least 20 insurance products he had. In recent months, this client has decided to do some research and reading and it had become apparent to himself that he is not going anywhere holding on to so many insurance policies. He had tried to “rebalance” his insurance portfolio himself but it was a tough job. Before he met me, he approached an IFA to help him. That IFA offer “free” financial planning but end up recommending another lemon investment product which would increase his burden further because it had a super long lock in period and of course superduper high commission. I tried my best to help him and had spent 20 hours on this case. It was a very tough job because of so many insurance policies and so many duplicate riders. Fortunately he had minimal investments and so the investment part was not a headache.

It is my conviction that financial advisers who are problem solver will always able to find new opportunities. In this economy turndown, many clients will face more problems and this is the time for problem solvers to show their skills – without the necessity of selling products

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