Most of us would have known a financial planner or two within our own circle of friends and relatives. Some of us may also avoid them like the plague, knowing how most financial planners usually start by prospecting from their friends or relatives. But the irony is that we all buy insurance, and sometimes turn to the ones we know first instead!
Indeed, most of the time when we look for a financial planner for our own financial planning, we either seek out someone based on familiarity or through a word-of-mouth introduction from friends. Fear of financial jargon and not understanding insurance coverage are also reasons why we prefer to talk to someone face-to-face instead of blindly buying a policy online. So if we all need to speak to a financial planner sometime in our lives, why is there this aversion towards them, and financial planning as a career generally?
Common Misconceptions/Doubts about the Job
Those who may consider financial planning as a job are usually fresh graduates or mid-career professionals. But like any other employment, individuals often find themselves facing some doubts about taking up the job. Here are some of the common “reasons” for not considering a job as a financial planner.
1. Not sure if the industry is for them
Most people do not know if they like a job/industry until they are in the job. But much like other companies, a financial planning firm provides a huge range of products and services where employees do not have to source for. Very often, a successful organization would already have some good or proven strategies for newcomers. Training will also be provided to ensure you have the right skillset and product knowledge. In fact, the truth is that even if you do not stay in the industry in the long run, understanding these products will ultimately help you in your own financial planning as well.
2. The job requires long hours
Do you know that Singaporeans work the longest hours in the world? In 2016, the average worker clocked about 2371.2 hours, which translates to roughly an 9.5-hour working day (based on 5 working days a week excluding holidays). This is also why more and more people are embracing the gig-economy or going freelance, taking sabbatical and taking longer breaks between jobs to enjoy some form of work-life balance.
As a financial planner, it is not wrong to say that you typically start out working longer hours as compared to a strict 9-hour work day. You might even need to work weekends at roadshows as well. It takes an average of 3-4 years for a rookie to build a sizeable client base (about 50-100 clients). Now, the thing is most people buy insurance for the long term, which means that once you have “matured” in this industry, you will reach the sweet spot of being ‘underworked, over-paid’. At this stage, you are likely to work fewer hours as compared to the average office-worker. In fact, as you stay longer in the business, you will realise that your working hours become more and more flexible.
3. Unstable job
Those who do not mind the hours are also afraid of not being able to earn a steady income since it is largely a commission-based job. It is natural to be attracted to a fixed income job as most people prefer a stable income at the end of each month.
The main problem with a job providing a fixed income is that most of the time, they come with a structured progression which limits your potential. So, if there is a path where you can achieve and progress much more with less time, why settle for a fixed income? This is also the main reason why some people take the risk to venture out on their own to set up their own businesses – the long-term benefit of growing your income exponentially. Obviously, taking this route comes with huge risk and entrepreneurs are mostly prepared to spend all their time working. Comparatively, a financial planner is considered a much “safer” route since you receive much more support along the way. When you’ve reached the stage of having a stable client base, you’d realise how stable this career is!
4. “I’m not cut out to be a salesperson”
This is a common statement heard from those who are afraid to take up the challenge of being a financial planner. These days, many consumers are smarter than you think and if you are a good salesperson without a solid product knowledge providing great customer service, you will not make a good financial planner. Many Singaporeans are well-educated and you may be surprised that a lot of them already have some prior knowledge about insurance products before sitting down with you.
This is why a financial planner is more than just a salesperson. He/she will be able to take a holistic view about a client’s financial situation and take into consideration his needs and aspirations when recommending a product. They may even point out certain blind spots a client will have.
Joining an established agency will also help you get started. One of the biggest challenges hindering people from joining the industry is worrying about how they can get sales leads. A good leads generation system will result in higher financial planner retention so it is paramount that you find out if your leader/mentor will be supporting you in this aspect.
A lot of manual jobs will be replaced by automation/robots; this is already happening. But a financial planner’s work is non-routine and involves working with people, building relationships and understanding the individual needs of a person. This is the reason why many financial planners are still around even if you can now buy a life insurance online.
Some also worry about the stability of the job when a recession hits. The truth is that our work is recession-proof! An insurance is what one needs most during a recession because they’ll need a higher level of protection. Otherwise, they may need to fork out large sums of money in situations of a health crisis or accident when they may be retrenched or tight on cash. Indeed, there is little fear of job displacement for a financial planner.