In October, I went through the thought process of going through what are some of the considerations that we would consider in the financial planner or firm we would like to hire.
You can read the article here.
I ended off by requesting you guys to help me do a survey and some of you have helped me with it.
I would like to say thank you to the folks taking time to fill up the survey. And today, I would like to present to you the findings.
Now, as survey goes, the sample size is pretty small, so I do find this is not reflective of the general crowd. It does however, reflect part of Investment Moats reader base.
1) All the respondents agree that financial planning should be build upon integrity and ethics. Almost 98% of the respondents feel that we should not compromise this aspect of the service. The firm and the planner needs to put their client’s interest first.
2) Financial health check for the family and yourself is something respondents wishes for. About 77% of the respondents wishes for the firm or planner to check on the state of their financial well being by auditing their financial situation. The rest of the respondents are neutral about it, making this a feature that many wishes their planner to do for them.
This is usually difficult to do because majority of the advisers are commissioned based and if they meet up with you, access your situation and truthfully determine you are in good shape and do not need another product, they would have wasted their time. They have to at least sell you some savings financial product.
3) A high percentage would like the firm to keep a record of their financial situation. This is a fun one for me, as I was interested to see if people see value in the planner able to provide a service to archive and provide a review of your current financial state.
Respondents can choose multiple options and surprisingly the majority would like archival. The popularity of each data archival is as follows:
- Bank Accounts: 84.6%
- CPF Accounts: 65%
- Home Values: 73%
- Mortgage Value: 73%
- Credit Card and Personal Loan: 73%
- Investment accounts with various Brokerages and Distributors: 77%
I was actually quite intrigued about this as I am not sure how much people would actually value the data consolidation aspect of a financial planner.
Providing so much information about my financial situation would help the firm or planner give me a more comprehensive planning. However, there is always a privacy and data security risk there.
Not sure how many people felt that way but from this data it seems most are favorable. I had one person who doesn’t want any of this and one person who wishes all of this.
There were 2 person who only wishes that the firm help them to track their home value and mortgage. There is 1 person who wishes help to only track his or her investment accounts.
Judging by the figures bank account consolidation and investment accounts consolidation is high on the list. I suppose all of them are equally high, and if the firm has good annual snapshots of these data, it will provide a plot line for the planner and the client to consistently discuss upon.
4) Majority are OK to manually input some of these assets and liabilities data. 80% of the respondents felt that they are agreeable to fill in some of these data listed above, if the goal is to help them get a holistic view of their situation.
I think technology can help a bit. If some of the banks, CPF can provide an API, it would allow the firm access to these data, with the client’s permission.
The client could then augment these with figures that were hard for the planning firm to get access on.
5) Everyone placed an emphasis on the security. In this time and age, we stored some of our information that are private at these financial institution. Poorly coded website, or poor security practices can result in these information being used against us.
This could result in future monetary loss, or major annoyances.
6) Majority wishes for the financial planning firm to provide products that can protect their family and themselves. 88% of the respondents wants this as a functionality. I am not surprised since this should be a core product/service of the financial planning firm.
7) Demand for other planning products were not strong and they are not willing to pay a higher fee for them. Only 61% of the respondents wishes for the firm to offer estate planning, wills, business insurance products and services. I see it as the majority may not know why they need these services well, and therefore do not feel a priority for the ideal firm to have that.
It could also be they understand but their needs they felt are more for protection and investments.
Their willingness to pay a higher fee just because the firm provides these services is low. Only 19% of the respondents are willing to pay a higher overall fee for this. 34% of respondents feels they should not pay a higher fee for this.
8) Majority wishes for the planner or firm to be able to plan for their own unique financial situation yet majority do not wish to pay a higher fee for customized planning. 88% of the respondents feels very strongly that the firm they engage in should be able to tailor the financial plan to their situation. Yet only 46% of the respondents are willing to pay a higher fee for this. 19% of the respondents are not willing to pay a higher fee for this service.
9) Demand for Life planning, career coaching and a battle buddy to keep you on track with your budgeting target is low. These 3 areas, are not the traditional financial planning service, so I was curious whether people feel that these are important. 30% of the respondents feels that they do not need any form of life planning.
38% of the respondents felt that career coaching is a service that is good to have. 57% however, like the idea that the firm can offer some form of budgeting, or attention to ensure they keep to their budget.
10) Not everyone feels that the firm or planner needs to offer many investment products but majority would wish the planner or the firm is able to provide good investment products. 65% of the respondents felt that they would go with a firm that offers many investment products. However, 77% of the respondents feels that as long as the firm is able to provide good products, they do not need a lot of choices.
11) Majority wishes the planner or firm to provide investment management services. By investment management, the firm is able to recommend changes to their portfolio such as changing their allocation, recommendation to buy and sell products. 80% of the respondents feel that this is important enough for them to have.
12) Majority do not need behavioral coaching. 57% felt that they require someone to coach them on the behavioral aspect of investing.
I take it that a lot of people are pretty confident about their wealth building skills.
13) Majority do not need a firm or planner to consolidate their financial life. For some, they wish that they have a firm that, through their platform, they are able to consolidate the documents and the data that make up their lives, so that they have a consolidated view about this.
61% of the respondents felt that it is good that the firm is able to consolidate their financial life.
14) Not many of them felt Robo-Advisory services is important. Only 27% of the respondents felt that robo-advisory services are important to them. 38% of the respondents felt that robo-advisory is not important.
As I pointed out at the start, the sample size is small and should not be taken as reflective of how all Singaporeans felt. I would like to think that Investment Moats readers are a pretty savvy bunch so a lot of them do know what they want.
From the result that seemed to indicate that:
- They know what are good investment products and wish to go along with a firm that is able to provide that. They do not need a whole zoo of investment products
- They are cost conscious. While they see value in having a firm that can tailor the investment and protection plan for them, they are not willing to pay above for such services
- They are rather confident in their abilities to follow through and build wealth. This is an inference by the question on behavioral aspect of planning
- This might be mixed but many do not need other unique services outside of protection and investments. However, I do detect that some would like help in ensuring they keep to their spending goals
- While only 61% of the respondents wishes the firm can consolidate their financial life, a large group of them wishes the firm can consolidate some of the main categories of financial data. And they are willing to manually key in to arrive at a holistic picture
- Not many placed an emphasis for robo-advisory
I guess many treat the technology aspect as assistance to the financial planning function. The services and products provided, and how they are carry out is the aspect people take note of.
I tend to think that we tend to underestimate certain aspect of our financial life. We find that we are not lacking. However, that is a problem of we do not know what we ought to know.
And thus we think some areas are not important.
I tend to think your human capital is pretty important, and career planning could help a lot. However, it is not usual for us to think that we have a deficiency in this area and seek help.
Due to my struggles, I find it hard to believe majority of the folks do not need good behavioral nudges, or help in the behavioral aspect of investing. I get a lot of questions that is the result of different behavioral tendencies.
This could be another case of services that you wish to save cost upon and try to DIY yourself.
Let me know if you have some thoughts about the results.
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- Building Your Wealth Foundation – You know this baseline, your long term wealth should be pretty well managed
- Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
- Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
- Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
- Free Stock Portfolio Tracking Google Sheets that many love
- Retirement Planning, Financial Independence and Spending down money