What you NEED to know about Wealth Management Advisors
This Q&A is for the benefit of investors.
Q: What does a Wealth Management Advisor do?
A: A Wealth Management Advisor is in the business of giving advice about securities to clients and manages the clients’ portfolios of investments. In addition, they may also offer other value added services including regular savings/investments plans, fixed deposits, medical insurance, accident plans and housing loans.
Q: How are independent Wealth Management Advisors different from Insurance Agents?
A: Wealth Management Advisors are able to provide consumers with a wide range of investment products from various product providers. That is, for a given situation that the consumer face, an independent Wealth Management Advisor is able to advise the consumer with a great variety of products from the various banks, fund houses and insurance companies. Only advisors who can clearly show that they do not have financial or commercial links with product providers that may influence their recommendations to consumers can use the term “independent”. Insurance agents in insurance companies, on the other hand, can ONLY recommend products of their companies that they are tied to, often resulting in no other choices for the client.
Therefore, you should find out if your adviser is truly independent. Tied insurance agents can only recommend their companies’ products which may be hardly any quality financial advice, as it means you will be missing out on most of the products out there in the market.
Q: What should I do if I receive an unsolicited call to purchase an investment product?
A: You should find out where the person is calling from, the company he represents and their licensing status. You should not deal with FAs not licensed or authorized by MAS as you may not be able to take action against them should you lose money or come across other problems. You can check the MAS website at http://www.mas.gov.sg/ under “Financial Institutions Directory” for the list of firms authorized to provide financial advisory activities in Singapore.
Q: What should I do if I have purchased an investment product from an unlicensed FA?
A: If an unlicensed FA approaches you to purchase an investment product, you should report the matter to MAS immediately. If there has been a breach of the law, MAS will refer the case to the Commercial Affairs Department (CAD) for investigation.
what about certificate? do you wealth advisers have same as insurance agent? i heard from frd get same plan is cheaper with independent adviser but are weal.th advsers always better?
Hi Wei Sheng,
In terms of qualifications, wealth management advisors are required to take additional exams on top of what insurance agents are required. There is also more stringent requirements in getting the license.
As mentioned, independent advisors being qualified to offer advise on the various products in the market, would be able to seek the best product pertaining to the customers’ needs.
Therefore, independent advisors have the potential to match the needs of the customers much more accurately.
However, this is if and only if the advisor do really understand the needs of the customer and match according to his needs. If the independent advisor chooses to just “simply” recommend a certain plan from a certain company, he would be in no way different from an insurance agent in that sense.