What does it mean to be a successful financial advisor in Singapore?
Success is a relative word that has been used and abused many times over.
Used by people to abuse other people into doing whatever they want them to do.
Before going any further, lets first take a look at the dictionary for its meaning of success.
According to one of the definitions found in Dictionary.com,
Success = The favorable outcome of something attempted
When you don't define what success means to you, i.e. the favorable outcome you personally want, it is very easy to find yourself subscribing to other people's standards of success.
Everyone needs a direction. When a person finds himself lacking in an inner compass, he will tend to look to others for direction.
In the life insurance & financial advisory industry, it is the same.
If you don't decide strongly for yourself the favorable outcome you want out of this career, your 'success' will likely come from others' definition of success.
In Singapore, if you want to be seen as a successful financial advisor by your industry peers, you must at least hit MDRT (Million Dollar Round Table).
Currently, the criteria to qualify for MDRT is to produce SGD$110,900 of commissions for the year.
Not a million dollars like most outsiders instinctively think.
It doesn't matter what you do to hit MDRT, you simply MUST hit this MDRT.
When you have achieved MDRT for the year, you will receive the stamp of success by fellow financial advisors and management.
You get a MDRT certificate which you can frame up for display.
You can also order a MDRT plaque to show off to your clients.
If those are not enough reminders to yourself that you are successful, you can still order a MDRT pen to bring to outdoor appointments.
Over to the clients' end.
Clients don't get whats the big deal about MDRT.
It doesn't mean anything to them.
When a client's advisor gets MDRT, it doesn't mean service to them will improve, it doesn't mean their investment portfolios will rise, it doesn't mean their insurance payouts will increase, it doesn't even guarantee that the advisor will be in the industry when they need to rebalance their portfolios or make an insurance claim.
But in the financial advisors' circle, MDRT means the world and is their main reason for existence.
What happened?
The financial advisor is supposed to take care of the client in areas of financial services.
How did the financial advisor end up valuing an award more than a client?
In desperate attempts to qualify for MDRT, I have even heard of managers teaching financial advisors to tell their clients to help them out for MDRT.
The MDRT award is supposed to be a byproduct of good financial advisory practice but in many cases, the client seems to have been displaced and become instead THE byproduct of the financial advisor's MDRT pursuit.
Lets take a look at the 2 groups of people who are integral in shaping financial advisors' behavior.
Clients and Management.
Clients
What are the favorable outcomes that clients want when dealing with their financial advisors?
Most clients I have come into contact with actually have rather simple needs.
They just need their advisor to give proper and objective advice, be reachable when they need to reach him/her and provide follow-up service from time to time.
If an advisor can fulfill the above and continue to stay to be of service, the relationship is already considered a success.
Unlike what managers always tell their advisors, MDRT is not a requirement for client to feel the advisor's commitment and competence. You don't have to match your client's incomes. Have you ever walked into an appointment and your client ask you about your income to compare with you?
Don't fall for what your manager tells you. Whatever he tells you, always ask yourself whether is he making any sense.
Management
What are the favorable outcomes that management want? How can they get the outcomes fulfilled from advisors?
Management also have simple needs.
They want more financial advisors to join them and they want all of these financial advisors to work.
To them, that is what success means:
More Financial Advisors X More Production per Financial Advisor = Much More Money for each Director
MDRT is a double advantage tool for the management.
It can be used to recruit more advisors and it is also a means to make financial advisors keep to a certain level of production.
1. Recruitment
Every company will like to boast to potential recruits that they are possibly the BIGGEST FA firm / life insurance agency in Singapore with the HIGHEST ratio of MDRT-ers.
It makes the company look really competent and more people are likely to join.
Unknown to potential recruits, it doesn't matter how the MDRTs were achieved, MDRTs can easily be produced with creative means to show up for the company's portfolio.
2. Keep to a certain level of production
Airy fairy MDRTs are good enough to show on a company's CV but aren't sufficient to pay for the directors' salaries.
They want solid MDRTs being produced too.
It is not by chance that every advisor feels compelled to adhere to MDRT standard.
The financial advisory work environment is cleverly structured to equate the financial advisor's self-worth to his / her production.
When you enter an insurance agency / FA firm's office, the only wall art pieces you will see are production charts.
These charts list every individual's production for the month and year.
Everyone can see how much you have produced to date and whether you have hit MDRT or not.
In some companies you can see each advisor's name and production clearly even when you are standing 10 metres away from the production charts.
It won't come as a surprise if in future LCD billboard screens are placed outside of the building, broadcasting to every passerby the company's production and flashing pictures of all those who have already hit MDRT.
When you walk past your colleague in office, especially close to end of the year, the question you are most likely to be asked is not "How are you?"
Its "How far are you from MDRT?"
In the office, financial advisory work is termed as running for production.
Running for production is like playing a game of snake and ladder.
When you climb up the production ladder, during team meetings your manager will ask all your colleagues to clap hands for you and get you to explain your production success of the month.
When you slide down the production snake, they will take turns to ask you with intense looks of concern, " Are you ok? What happened?". In worse case scenarios, managers punish advisors with low production by ignoring their emails, texts, calls when these advisors need their managers' approval for client servicing like countersigning on documents, online approval of trades, advice for special cases etc.
This is all done to reinforce that production = good, decreased production = you are not ok, you better do something about it. Or else...
This intensifies greatly towards the end of the year, as the closing date of MDRT qualification draws near.
Precisely because of this, even some top producers fear the loss in face from fallen production grace.
The maintenance of yearly sales accolades achievement is used as a whip on themselves to go on and on.
The very running of production for the sake of sales accolades is damaging for both the financial advisor and the client.
Financial advisors only see themselves as worthwhile as their production achievements and take production figures very personally.
While clients, who are actually supposed to be the financial advisor's focus, are being displaced and become byproducts of this MDRT race.
If MAS bans the usage and promotion of sales accolades, it may actually cut down on the number of complaint cases FIDReC has to handle.
The hierarchy in this whole financial advisory business is supposed to be:
1. Client
2. Advisor
3. Management
But with clever propaganda and structured environment, the actual hierarchy of needs fulfilled has often become:
1. Management
2. Advisor
3. Client
Bear in mind, MDRT is really not the root of evil here. It is simply a tool that has been misused.
Both good advisors and not-so-good advisors can produce MDRTs.
The key lies in who/which was the byproduct in the process. The client or the award?
It is very obvious that we need our clients and every level of management needs us to pay their salaries.
Financial advisors are clients too. Clients to the company who deserve to be served and supported at a level which helps to serve and support our end-clients.
If a FA firm / insurance agency does not serve and support their advisors well, the advisors will also face unnecessary obstacles at work to serve and support their clients well.
Putting things in perspective:
Will we get success i.e. favorable outcomes from serving people whom we need or serving people who need us?
