IT MAY be small and relatively new but the group representing independent financial advisers has ambitious plans to take on the big boys in the industry.
The Association of Financial Advisers (Singapore) wants to increase its numbers and grab a much bigger slice of the pie to rival the biggest financial institutions here.
Speaking at the association's annual conference yesterday, Afas president Vincent Ee said the number of independent financial advisers has grown too slowly over the years.
Despite the fact that the association was formed more than a dozen years ago, there are only about 3,000 financial advisers in the industry today.
"Today we easily have more than 12,000 agents within the insurance companies, a few thousands personal bankers, but we barely hit 3,000 financial adviser representatives in our channel," said Mr Ee, who is also the managing director of one of the bigger financial advisory firms, Financial Alliance.
But the competition for talent is stiff, with most fresh graduates opting to start their careers with insurance companies or become personal bankers at the banks.
Still, while the independent financial advisory firms may not have the same big-name draw as the large players, he noted that many new entrants choose to join the industry a few years after working in those institutions.
Part of the reason is that there has been a healthy growth of business among the firms, which has in turn attracted people to join, said Mr Ee.
"It's a good sign, but as an association we want to urge everybody to work even harder because this industry has to be bigger, for the benefit of consumers, the industry and country," he said.
He plans to embark on aggressive recruiting in tertiary institutions even as firms start to grow and develop financial resources that bigger financial institutions already have.
"The size of our industry must grow to a level that is comparable to, if not bigger than, other channels.
That is our vision. We hope to see it happening over the next five years."
Today, about 40 per cent of the life insurance market is held by agents of insurance companies while independent financial advisers hold just 17 per cent.
Having a bigger industry will also grow the public's awareness and confidence in independent financial advisers, added Mr Ee.
"It is a channel that's supposed to flourish but the growth of the industry has not lived up to our expectations," he said.
He also noted that Afas launched a professional indemnity insurance for its financial advisers last year and almost 1,000 have signed up.
This protects advisers against the cost of lawsuits and offers consumers compensation when advisers mess up.
Mr Ee said it will give advisers and consumers greater confidence in the industry, with both sides knowing they are protected.
Mr Tan Lye Poh, director at IPP Financial Advisers, agreed, noting that other professionals such as lawyers and accountants have similar protection.
"This helps to make sure that both the consumer and professional are protected, which is good for everyone. You can get that only if you are a licensed professional."
This article was first published on July 4, 2014.
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