To Prospective Client(s), Love, Lieu
Or...maybe you *SHOULD* pay for fees. Here's why - below
I write this to explain why I charge fees for my financial advisory services. I feel this deserves an explanation because you deserve my respect when you make an inquiry on my services, and I'd do the same thing in your position as an informed consumer if we were to switch our roles. I understand that as most of us, you want to seek professional advice on how to better achieve your financial goals but it must be affordable enough. On top of that, you want to ensure you engage a competent and ethical financial planner who can deliver measurable results that is worth the money you paid - just like any other products or services.
I am sure you work for someone or work for yourself. If you work for yourself, this is no brainer. If you work for someone or an organization, I am sure you expect to be compensated fairly for the time, work or services rendered. If you don't get paid for 3 months consecutively, would you still work for the organization?
This is not about me. Thankfully, I have built up a small reputation and credibility in this independent financial advisory industry since 5 years ago. Trusted clients gladly referred me, or my name get around by word of mouth. This is about my peers and aspiring planners who wants to become an independent planner, yet find it hard to be one because Malaysians are not used to paying fees for advice. And you think having a financial planner/advisory will cost you an arm and a leg. Or that we only serve high net worth clients. Now, if you look at the measurable results vs fees paid HERE, I can guarantee that it is likely your investment in engaging a fee-based planner is worth your money many folds.
If you think our fees are expensive, try ignorance. So what happens then? Many fall back to become financial product-pushers, just like many Tom, Dick and Harry out there. Because they are skeptical if they can charge fees for advice.
Do you like product pushers? I am sure I don't because while I like to buy, I don't like to be sold. And high pressure, product pushing approach never benefit the client. Your interest comes second, and there are common cases where mis-selling happens.
While they say one bad apple spoil the entire barrels, in the financial planning industry, probably (just my personal opinion), half of the people are bad apples. Unethical tied agents. Unqualified personnel. Agents who are more interested to pad their wallet by selling you expensive-lock-you-down-for-long insurance policies. All are calling themselves financial planners, which mislead the public because some are just glorified agents.
I am sure you can relate because you too, have good colleague and bad colleague in your office. As a matter of fact, we charge fees not only because we can, but because we get paid without having to push you any products upfront. That is the difference between a CFP without license and a CFP with license to charge fees.
Sure, we still need the products for implementation stage, but that comes later. The same analogy is that you don't go into insulin therapy without consulting your doctor if you even have diabetes in the first place. Doctor charge you fees for that. We are similar - because just like profession like lawyer or accountant, we have professional indemnity insurance as well.
For the most of us, we spend years and close to 5 figures to get our CFP certifications before getting our advisory licenses. On top of that, just like you, we also have a family to support. So the next time you are thinking of getting free advice, think what would you feel if you were to go for a job interview and the hiring manager ask you if you can work for free for the first 6 months.
These are NOT the complaints of an angry or frustrated IFA. These are the echoed sentiments of every IFA in Malaysia who believe in independent financial advisory going forward is good for clients because it could minimize the conflict of interest in the conventional product-based approach of financial planning where the only compensation is commission-based. I am aware that some of you reading this are open to paying a fee for independent advice. I think this is a beautiful progress for the industry, and thank you for your understanding & support. We know that if you can buy an iPhone or an iPad, they it is likely you can afford our fees. And that in return of the fees you paid, you will get a much more quantifiable monetary returns from your iPhone/iPad.
You see even artists get paid for their music, and with all due respect to artists, music is not something you cannot live without because music is aspirational purchase. Don't believe me? See a public letter written by Taylor Swift to Apple Inc back in June 2015. What I wrote here today is inspired by Taylor's letter itself.
You don't work for free. So please don't ask us to provide you professional financial advice without compensation.
p/s - Want free advice? Browse through my 300+ financial articles I wrote since 2011 HERE.