(Last Updated On: 08/11/2016)

I am going to be brutally honest with you. It is very unlikely that the financial planners or advisers (or financial agents the likes of insurance/unit trust/estate planning agents) you encounter are already financially free themselves, regardless of how sharply dressed they are or what car they drive. Ask them not to work at all for the next 5 years and see if they can do it without any financial concern.

It is also equally likely that you earn more than your financial adviser and have higher net worth than him/her.

And yes, even the icons of the industry, agency managers/leaders or even the renowned wealth seminar gurus are NOT excluded. If you had the chance to talk to them as a friend that is. (Heck, even agency leaders are having constant problem of increasing attrition rate/drop-off – if they don’t keep on recruiting new blood, do you think they can sustain their agency operation and live like a king on the “outside”?)

The odds are that those who are already truly financially free would just do……..things you wouldn’t know if you don’t know them in person. They could be taking care of their children/grandchildren OR travelling leisurely. They would be OUT of the limelightcomfortable in their own skin doing their own thing.

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It seems that Mark Zuckerberg drives a $ 30,000 Golf GTI to work. Go figure!

Read the article HERE

(It’s a matter of choice, and btw, I drive a Perodua MyVI 🙂 )

volkswagen-sends-mark-zuckerberg-a-gti-sweater-video-75456_1

Maybe if you do know a truly financially-free person real good, you can convince them to share with you a few life-changing money tips. Chances are, they keep their expenses real tight, frugal and admit it’s all hard and smart work being put in all through the years to get to a point where they can be financial-worry-free now. They are no big spenders, which is the reason you can hardly find any distinguishable thing about their life or possessions from the outside.

So does that mean financial advisers, who preached the attainment of financial freedom, are actually living a lie themselves?

The Reality 

No it isn’t. But yes, it’s true that very few people in this industry are willing to admit that they are not financially free yet.

I am willing to admit that many of my clients earn higher monthly income/business revenue than me. They are older. They have higher net worth, usually millionaires.

But yet, clients who are way well-off financially than me still trust and engage me to be their adviser – to grow, enhance and optimize every areas of their financial well being.

Why is that they still pay me to be their financial adviser?

The Simple Analogy

This group of people who are very much financially-conscious,  knows that a doctor doesn’t need to be infected by an illness previously to be able to cure that exact same illness. It does not mean that a doctor cannot get sick at all.

A doctor, however, needs to be qualified – by training and experience, to treat patients.

Also, you’d want a doctor who is health conscious. You wouldn’t want engage doctor who’s a heavy drinker and a chain smoker, right? Someone who doesn’t walk the talk, yes?

Similarly, a mechanic doesn’t need to own a BMW or Mercedes to be qualified to fix your car. Similarly, it wouldn’t make sense for an architect to have built his own skyscraper for his own stay in order for him to be qualified to build a skyscraper.

The Challenges

The other group of people, however, are much skeptical. That simply means, in their mind, they think:

“If this financial adviser guy is not financially well-off than me, why should I even seek his advice?”

It is not entirely wrong to have such perception. After all, you wouldn’t want to seek financial advice from a beggar, would you?

But if I were you, I’d look for financial advisers who have good money habits. That means if he has a black mark in his CCRIS and lots of personal loans (bad lifestyle debt), then if I were you, this is not the kind of financial adviser who walks the talk.

Similar to the doctor analogy above, yes?

But rest assured I’d always strive to be the best person I can be for myself first, and then and only then, I can be my best for others (family, clients, etc).

But it isn’t easy to have this group of (skeptical) people as client. Therefore, comes…

The Rule of Thirds

I come to realize that no matter what we do in life, a third of the people we come in contact with will love us, a third will dislike us, and the rest will be indifferent.

The rule of thirds is obviously an approximation, but it serves as a good reminder that we shouldn’t waste time trying to make everyone believe in your or believe in what you believe. Every moment we spend trying to win over someone we can never please will just distract us from the people who actually like us and believe in what we do.

Instead of trying to bring other professionals and clients around to my way of thinking, I had more opportunities to engage with like-minded individuals who were excited about my service and how I can help them.

Happiness Mahatma Gandhi

My really quality financial planning clients and myself found a really good alignment of values & action to take to take this journey to financial freedom.

It is like the alignment of heaven and earth.

heaven earth align

Now, like they say, the journey itself matters more than the destination. So even if we never ultimately attain total financial freedom, by taking actions, we will already be better financially in leaps and bounds compared to if we were not taking any action in the first place. Clients judge me by how I can add value to their lives, instead of what I have or how much I have (which really doesn’t benefit them).

Bad things happen to good people.

Having said what I’ve said above, of course I am not the only good financial adviser. There are good and even better ones out there, but it is more likely you’ll easily find a bad one – which in my book, referring to someone that places his interest first above client’s interest.financial adviser purpose

Even so, when we’ve lived long enough, we knows all too well that bad things happen to even the best people. Not bad per se, but in this context, remember that financial planning service appears to be an “aspirational purchase,” although it is NOT. For most people,  it is something that even if you don’t do it today, you are not likely to feel any side effect the next day, next week or even next year.

But oh boy, you are going to feel it 10 years from now.

Plus, the market is just not too ready for paying a fee for advice. But a day will come when everything can be bought online – insurance, investment products, so commission will be out of the question. The only value remains is the quality of the advice itself and the personal relationship between client and adviser.

work is awesome

We want to remember that the world is not a meritocracy. If we stop whining about the bumps, keep charging down the road and do the small things right, the big things will fall into place. How long one can hold onto this faith will vary though 🙂

…but one thing for sure, if you are reading this, your good financial adviser needs your support so he can continue to serve + add value to you.  Not for him, but for your benefit as a client because the industry needs to grow & mature to move towards a fee-and-solution based advisory, putting less emphasis on commission. This move will indirectly weed out the many bad apples in the industry. This is not unlike the chicken & egg analogy, yes? 

The wrong mindset in this field is the “shortcut to riches” bad_apple-300x156perception.

The thing is there are so many people in the financial planning industry which is looking for quick buck sans the relationship building OR truly care for people well being. The industry has been so tainted with the “ostentatious” lifestyle culture that involves big houses, flashy cars, expensive watches and so on. And so people join the agency and inculcate this lifestyle, up to the point where they cannot go back anymore. They spend big and fast; some even spend more than what they are getting to support this lavish lifestyle. It is unreal.

So we cannot blame clients for having perception that financial advisers/agent are in for the money alone. One bad apple spoiled the whole barrel – in this case, probably more than half of the barrel are bad apples!

Do share your feedback and experience below.

Your say?

    6 replies to "Why your Financial Adviser or Planner is not actually Financially Free (yet)"

    • K S

      I really admire your truthfulness and candid comments on this topic. It always remind me of the quote “People drive up to Wall Street in their Rolls Royces to take advice from the people who ride the subway to work”.

      The most important criteria for me is the FA must be knowledgeable and able to provide competent and realistic advice. I do not really care if he/she takes the LRT to his office, but the dedication and professionalism shown is most important.

      Keep up the good work.

    • Steve Lye

      Well said CF. 🙂

      I particularly like the part which says:-

      “Maybe if you do know a truly financially-free person real good, you can convince them to share with you a few life-changing money tips. Chances are, they keep their expenses real tight, frugal and admit it’s all hard and smart work being put in all through the years to get to a point where they can be financial-worry-free now. They are no big spenders, which is the reason you can hardly find any distinguishable thing about their life or possessions from the outside.”

      Reminds of the book, “The Millionaire Next Door”. Most of the wealthy folks I know are not the ‘showy type’. Heck, one multimillionaire friend of mine drives an old beaten down Proton and he lives very simply. As the saying goes, “Never judge a book by its cover”.

      Cheers,
      Steve

      • ChingFoo Lieu

        Steve, absolutely true. There is more than meets the eyes 🙂

    • boey hong kim

      life is like a jig saw puzzle. put all the small pieces correctly together and the picture will automatically fall in place.

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