As most people know by now that DBS is offering 1% sales charge on their unit trusts even cheaper than the online portals. Some of my colleagues asked me how to survive like this when the sales charge is becoming so low. It is becoming like selling medical shield plans which comes with huge liability for the adviser but with small commission (after expense, there is in fact negative commission!) I told them the simple answer: Don’t focus on sales of products and there will never be any opportunity for clients to compare prices. Of course, majority of the advisers in Singapore can’t do that.

For those reading my blog and are commission-based financial advisers, your days are over.  When you sell products, you either compete on pricing or by misrepresentations. At the end of the day, your remuneration will always come from products sale. This means that by hook or by crook, you must close the sale. If your product is the best – there are countless others selling identical product as yours. So why should the client buy from you? Alternatively, many others will resort to misrepresentation such as saying their product is the best (when it is not true) or by saying their competitor’s product is bad (when it is not true).

When some of my colleagues expressed their fears to me that unit trusts have become so cheap, I personally don’t feel anything anymore as I am used to recommend products that do not pay any commissions such as ETFs, fixed deposits, group insurance and even competitor’s products (if they are really good).