- Radical Business Model

Radical Business Model

Written by Wilfred Ling

Friday, 27 February 2009

This week, I met many people except potential clients (opps). Joke aside, I had a chance to meet many fellow practitioners of the industry. All of them were from other FA firms. Either I told them or they found out from themselves that I could recommend products which traditionally pays no commission.

Initially they thought Promiseland must have been carrying so many more products than theirs. But of course, we are all IFA firms – likely the number of products we carry is similar to everybody else. Hence, they were curious how I could earn a living out of recommending say (examples) that ETF or a Group Term insurance. I told them that they must stop relying on commissions and goes on the fee basis. I thus shared with them in detail my business model on how I do it. Of course, I wouldn’t state the mechanism on this blog but I am willing to share the mechanics of how to setup a fee business even to my competitors. Every practitioner I shared with was enlightened upon hearing this model. They couldn’t believe that such a practice will liberate them from the bondage they are having – which is the necessity to rely on product providers for compensation. Sometime, product providers are unreasonable and give insultingly low compensation. They think financial advisers eat and drink air. Some product providers are over generous and give outrageous compensation which is of course to the detriment of the client. Such an overly “generous” product providers have no concern over the interest of their clients. So to avoid these problems, not being overly dependent on commissions is a good way of being freed from this bondage altogether.

I hope to share my model with as many people as possible. My wife told me why should I share my “secret” with others. But I have no secrets because this model isn’t proprietary. In United Kingdom, fee based model will be the only model left when commissions are eventually outlawed. It is important for financial advisers to brace themselves for the next era.

By the way, I discovered many financial advisers are reading my blog. They came to me and told me that they frequently visit my website. So now I know most of the traffic comes from this group. Interesting….

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