Why I chose to be a Financial Consultant

I have just recently joined the ranks of Financial Consultant at Prudential. No, this is not an April Fools' Joke.

It is foreseeable the shock that many around me will experience considering my scholastic track record and, in fact, a penchant discontentment against financial consultants in the past. This discontent of mine was derived from the black sheep of the industry, and this phenomenon has perpetuated the notion that FCs are ruthless and crafty by nature. Well, that can be the same for any sales related role if we were to broaden our lenses of scrutiny.

What I am more concerned about would be the in-betweens: those who have the heart for their clients yet lack certain technical skills to provide comprehensive planning. They can be really great people to be with and are always learning to provide the best for their clients. Having met a few of such individuals, I have changed my mind about this industry and have decided to step foot in this highly stigmatised industry with a combination of motivations.

A few main reasons why the bold step in this direction and a brow-raising pathway: Remuneration for Effort, Aspiration in Behavioural Finance Research, Desire for Learning, and Love for Teaching.

Sales roles are well-known for their generous remunerations because the companies are essentially buying the networks of their sales representatives, which can be difficult to obtain even with a good product. This is simply due to imperfect information, the lack of information flow, the complexity of information, inertia to change, and the need for instant gratification superseding the need for protection. Till now, I am contented with what I have in life and have yet to be pressured by the unbearable constraints of money. Though, because of my workaholic nature, perhaps it is more motivating if a job will reward proportionately to my efforts. I won't use the common sob story of how parents have struggled to feed the family - it's probably too cliche. I just want to say that taking a PhD is not for the penniless.

This brings me to my second reason for joining. For those of you who know me, I am looking at furthering my studies in Behavioural Finance part-time in the distant future while staying in the industry to continue experiencing the unpredictable dynamics of it. I am always intrigued how supposedly wise, yet less-than-rational, individuals make financial decisions in the corporate world or in their day-to-day living. I ask these questions: Why do some leaders in companies make blind decisions or impose organisational drag without realising it? Why some individuals choose to gamble, why some choose a certain expenditure, and why sometimes purchases are made with regret a few days later.

The insurance and investment world consists of almost actuarially similar products with slight differentiations across coverage, time periods, claims experience, or returns. Yet, what do individuals base their decisions on? The plethora of choices may also impose decision paralysis and even avoidance of deciding on their own. Financial Consultants exist to provide that clarity. In certain cases, buyers fully trust what they have been recommended either by the halo effect of their MDRT agents or by previously forged relationships. It can be interesting to study how we may be penny-wise on grocery shopping but pound-foolish when picking our insurance policies. Also, there must be a monetary value to relationship since differences in policies are glanced over should a financial consultant gain the trust of the client. The field of behavioural finance in the area of insurance sales is currently under-researched but this field has so many layers of interaction that goes behind decision making of different individuals.

My third reason is that I enjoy chatting with people and learning from their experiences. Having conversations with people from all walks of life could very well expand my horizons and provide me with multiple worldviews. I find the need for intellectual stimulation and to continuously learn from all sorts of things. Unfortunately, I have many interests but a lack of passion (apart from taking a PhD) and the opportunity to chat with different people excites my ADHD brain.

And chatting with different people really interests me. It is a two-way learning. As friends around me generally ask me for investment advice, it may seem that only they will benefit from knowing my view on how markets will react to certain news or developments. Yet, at the same time, I also learn from their views and retorts against my own views too! There are definitely some blind spots that even my 7 years of investing journey may not easily pick up as well.

My fourth and last reason would be the love for numbers and statistics. I always believe in the idea that numbers speak for itself. And, with proper illustrations of complex products, we can justify that it is true that some products in store are indeed promising of returns without too much being chipped away. And breaking these complicated monstrosities excite me with my interest in teaching and analogising them into simple concepts. For instance, some investment plans with little chip-aways can be seen as a cake being given to you on your birthday. However, instead of giving you a whole cake, it is cut up into 6 slices. Three of which are given to you first, then 1 by 1 for the remaining three over your birthday celebration. And a friend decides to say “Hey, let me try a bite off one of your slices”.

First class honours, internships pursuing the famed finance or consulting industry, and a slew of extracurricular achievements - these are the accolades you would expect of someone heading into an MNC in the corporate world. True enough, I did follow the orthodox route into an MNC that I have enjoyed myself in and learned a lot from for a good 9 months.

I recall back then during my entry interview that I don't have a sight of where I will be in 5 years' time, nor do I have a Purpose. But I did set my goal that one day I will be attaining a PhD in Behavioural Finance and in many ways could I achieve this goal of mine. Placing two disparate choices in consideration, a corporate job would help me observe how the leaders of a company make financial decisions while sales will shed some light on consumer behaviour and decisions.

Just about 5 months into my corporate life, the epiphany of discovering my Purpose struck me. I had many colleagues who frequently tapped upon my knowledge of Excel to assist them in their work. I had also the penchant to constantly think of ways to increase the efficiency of doing work so much so that my insomnia had worsened. And I find myself finding solutions that benefit both parties (finance and procurement) of differing and conflicting goals to make our lives easier. With this, I thought that it would be lovely to employ these best-of-both-world mentality into insurance sales – a purpose that I have soon discovered. And perhaps, a PhD in the future could help me assist my clients better too in reverse!

Financial literacy in Singapore has definitely risen over the years but there are many individuals suffering from the Dunning-Kruger effect on their knowledge on insurance. No doubt the awareness and attractiveness of investments have skyrocketed in the recent few years thanks to the rise of cheap brokers, but insurance has always been shunned away from. Those who think they are well-informed with the developments of insurance may find themselves amidst a rude awakening when mishaps do befall on them. Do you really know your insurance policies and other protection-based information?

If you're interested to chat on this topic or to exchange ideas, please feel free to drop me a message on Telegram @elijah2212, LinkedIn, or through email elijah.thj@gmail.com!

http://www.prudential.com.sg/fc-disclaimer