1) Introduction

The Financial Adviser Industry Review is timely and the five objectives outlined by MAS are apt and necessary, but in my opinion, a few more fundamental issues should be addressed as these would go to the root of the problems.

My feedback is partly based on my long years of running a brokerage and financial adviser firm, but more on fundamental principles of what the industry should be.

2) Shortcomings In Present Structure and Proposals for Improvement

The main points I like to make are:

a) The historical model of product providers themselves distributing their own products exclusively through tied agents is the mother of all problems working against consumers’ interest and national interest. The objective of reducing the multi-tiers in agency structure is just minor renovation and will not remove the fundamental conflict of interests presented by the tied-agency system.

b) The objective of identifying alternatives to the commission structure and especially the aim to achieve lower premiums for consumers must be examined very carefully as a wrong decision could set the industry back instead of helping it forward.

c) The Financial Advisory model deserves greater attention, especially the removal of the current confusing smorgasbord of Representatives – tied agents, licensed FAs, exempt FAs, non-independent FAs, Independent FAs. All should be Independent Financial Advisers and all Representatives should be with Independent Financial Advisers. If not now, at least in the next 10 years.

3) Financial Advisory Industry Structure

The present structure is characterised by:

Product providers (e.g. Life Insurance companies) also having tied agents to distribute their own products exclusively

This presents a direct conflict of interest between the product providers and the consumers since the tied agents can only sell the principal’s products and are rewarded (or punished) by their production and loyalty to the firm. The tied agency is an expensive system to maintain for the insurance company as it has to attract, train, incentivise and retain its tied agents. The multi-tiered structure has evolved over the years because of the need to compensate the agents to sell, and motivate managers to recruit and grow their groups. Marketing and advertising of products are warranted, but the tied agency system also spends huge amounts of money in advertising to give recognition to its agents in order to recruit and retain their agents. Monetary incentives and other forms of rewards such as incentive trips abound to keep and attract tied agents.

In the area of products, since it is their own tied agents who distribute their own products, different commissions are paid for different products to motivate agents to distribute the products which bring most profits. And insurance companies keep making their products more complex with many riders, perhaps, to make them difficult to unravel and compare with competitors’ products. Tied agencies also contribute to high cost for consumers as they have to spend time talking to agents of different companies to choose the best bargain. Time is taken up for both the agents and consumers. Since the products are often bundled and quite complex, consumers are often confused as they hear every agent extolling their own products and often not mentioning the demerits or uncompetitive features.

It does not help that insurance companies often impose quotas and targets on their agents which has led to over aggressive selling.

The tied agency structure is not only expensive for the insurance companies and consumers. It is costly for Singapore as it means that every insurance company is wont to recruit its own large force of agents to distribute its products. This large number of tied agents only pushing one company’s product wastes manpower (engineers and other graduates) and leads to wasteful duplication of training and marketing expenses.

It is estimated that Singapore can save at least half of the manpower now occupied with distributing financial products.

The savings in cost of maintaining multi-tiered tied agents can translate to lowering of premiums and better productivity.

A comparison of the earnings of the tied agency managers compared with that of the managers and owners of the Financial Adviser firms would clearly show that the tied agency managers are being paid much more for doing less work and bearing less responsibility. The Financial Adviser firms are basically paid the same overriding as the Managers in the Agencies, but have to defray all the costs of running their business (staff salaries, rentals etc.) Yet most have been able to survive and grow.

To recap, there are many things to be gained by not having tied agencies – for consumers, for the companies and the nation. The question is whether there is any alternative distribution channel?

Direct distributing has been cited to save on costs but if this is still done by the insurance companies, the basic conflict of interest is not avoided and the consumers are left without advice. At best, only the simplest of products can be distributed online, e.g. term and personal accident.

For term insurance, the best way is to give options for higher sums assured under the Dependants Protection Scheme.

Bank channel is an effective delivery system given the wide branch network and banking visits made by customers, but it would be better if banks have to register their distribution as Independent Financial Adviser so that they have to live up to the higher standard in giving “fair and objective” advice. Currently, banks are only slightly better than tied agencies and only distribute for a few insurance companies and are largely pushing flavour of the month products.

Financial Advisers (firms) are potentially the best suited to give advice and distribute financial products to clients. This channel avoids conflict of interest, and wasteful duplication and competition on the part of insurance companies for sales forces which should lead to cheaper premiums.

However, instead of the present scenario, having both licensed FA, exempt FAs and Independent FAs and non-independent FAs which is thoroughly confusing for customers, it is best to have only one type of FA, i.e. the Licensed Independent Financial Adviser. This means that every firm which wants to distribute financial products applies to MAS to be an Independent Financial Adviser and lives up to the high standards of fairness and objectivity and not just “reasonable standards.” Customers’ interest would be best served by IFAs. Banks, stockbroking firms and others who like to distribute financial products should set up IFAs.

All the tied agents would be housed in IFAs and customers would then be able to choose from among the IFAs who all have the right of distribution of all the insurance providers. Singapore would then have the distinction of being the first nation to solve the many problems now existing because of the conflict of interest and wasteful duplication.

4) Commission Structure and Alternatives

The present compensation structure is commissions and overriding commissions for all insurance products.

A few Representatives charge fees for financial planning and enjoy the commissions on the products also. One firm claims to be on fee only although not all commissions are rebated.

The financial planning which is done ranges from very basic planning (similar to what most Representatives provide and do not charge for it) to modular planning (e.g. retirement planning, estate planning) to comprehensive planning. Fees range from a few hundred to a few thousand dollars.

It is a given that financial planners would be more objective if they do not also provide the solutions and enjoy the product commissions. But to achieve this, we would need to have financial planning done by a separate group of financial planners who charge for fees and a separate group of Financial Adviser Representatives who recommend the products. This is difficult to achieve on a national scale. Whether the Representatives can charge fees for both planning and product solutions is the key issue. The difficulty lies in the perception of consumers. For consumers with complex financial problems and life planning issues to consult with financial planners and to pay fees for the consultation is not an issue. There are already many who are doing so. But to expect everyone who just needs to purchase one or a few products to pay fees would be difficult to achieve unless they are convinced that the premiums have been reduced fairly and they will soon forget this even if this is done initially. Otherwise the fees would be seen as an additional cost. Surveys would show that for consumers to pay for fees separately in addition to paying the premiums would be psychologically more difficult to stomach than to pay for premiums and let market forces operate to ensure they are competitive.

To have a system where Representatives would have to charge fees in place of receiving commissions from the sale of products would result in much unproductive time being spent explaining the fee structure and what consumers are getting for it. A Memorandum of Understanding or Agreement would have to be written and terms and writing the MOU and signing would require careful attention. If consumers shop around, and this is to be expected as the fees set by different companies and Representatives would vary greatly, much time would be spent by both consumers and Representatives. All the Representatives time would still have to be “paid” for and this will be priced into the fees which will eventually be paid by those who proceed.

A commission structure with its inherent product bias and adverse effect on objective advice, actually sees the rich subsidising the lower income since Representatives can make more on the bigger sales and still do not mind taking care of the smaller cases. A fee only system based on the type of advice given and fee negotiation would likely result in the lower income not being served.

Is there any other alternative besides fees?

Salary does not incentivise Representatives and is a fixed overhead which would make companies more selective but also initially and possibly always, more costly. If incentives are added, the system would impose quotas and targets (like what banks now do) and the Representatives are just as driven to make sales irrespective of customers’ needs. The present method of compensation whereby commissions are paid to Representatives and their managers via the premiums is actually an effective system provided the following changes are implemented:

a) Disclosure of commissions

b) Making it mandatory for Representatives to show to each client a term insurance quote if the product being considered is an endowment or whole life. This will alert consumers to the higher cover for term insurance at cheaper premiums. Consumers often still choose to purchase whole life or endowment even when shown the term insurance option.

c) Payment to managers can still be by overriding commissions but the multi-tier structure must be examined to see whether it adds to higher premiums. Most FAs have only two tiers (ie. Firm, Manager and Representative) and this is sufficient to take care of compliance and supervision needs. Salary for managers is an alternative but will add to initial and possibly overall cost of operations.

d) Commission rate for all products should not be too different. One way to reduce the discrepancy between life insurance products and investment products is to state separately the term insurance premiums and the premiums for savings and investment portion. This is done in some countries. This way, consumers can tell the difference between protection and savings. The commission for each portion can also be shown. It is likely that when this is done, consumers will opt for buying term and investing the difference in unit trust etc. Investment-linked policies are notorious for high commissions (compared with unit trust) and high charges, but are not transparent to consumers. The projection for 5 per cent and 9 per cent should also not be shown as it gives the impression that they are likely to be achieved. Follow the way of unit trust which does not show any fixed percentage. FAs hardly sell ILPs because of their knowledge that unit trusts have wider range of investment funds and lower charges.

e) All bundled products must clearly show what they comprise of. For example, term, annuity, whole life, endowment, critical illness. This way, the Representatives and consumers are able to understand the underlying products and costs. Packaging is an effective way to market products but it is essential to list the components of the package. It would be better if products can be simplified (like the ‘80s) but combination of different features is fine if consumers know what they are. Riders have also been added often without consumers understanding them and customers must be educated.

f) If tied agency is retained, it would be good to have an alert to consumers that they should consult an IFA if they wish to have product comparisons (this was done in the UK).

5) Financial Advisory Model

The objective of ensuring that Financial Advisers are strong financially (e.g. higher paid up capital) and are better managed (separation of duties between CEO and compliance and sales) and have dedicated Representativeresentatives (no other conflicting or distracting business or means of income) is good but the root problem is that in the present structure, they face several odds.

a) Confusion of who a Financial Adviser Representative is and how they differ from the agents

The common use of the term “Representative”, while neat and convenient for legislation, blurs the identity and legal position of the many persons who are now all called “Representatives”.

A Representative can be a tied agent with an insurance company, a sales person with an “Exempt Financial Adviser” like a bank, stockbroker, General Insurance broker etc. or a financial planner or sales person with a licensed Financial Adviser. To add to the confusion, a Financial Adviser is given the option to be “Independent” or not, but the public is often not aware of the difference.

Some FA firms which are not Independent have been alleged to receive additional incentive payments to produce more for certain insurance companies, thinking that they can do so just because they do not claim to be “Independent”.

The most important point is that consumers do not know the difference between all these “animals” and the multiplying of Job Titles adds to the confusion. The legal issue is that tied agents represent their principal (the insurance company) while the Financial Adviser represents the clients. When a legal issue arises, this point is important for consumers. Consumers would be best served and their interests protected if all involved in sales are the same, e.g. Independent Financial Adviser Representatives. If this is too drastic a change, it is still better if the legal terms “agent” and “broker” are used as these terms have been tested in court. The term Representative is too generic and blurs the important distinction between agents and brokers that should be known to consumers because it affects their legal rights.If the term “Representative” needs to be retained because it is also legislated, the term “Agent” and “Broker” should be used in name cards and other materials to alert consumers to the legal status of the sales person they are dealing with (this is still the practice in the general insurance industry).

b) Because life insurers have their own tied agencies, they are duty-bound to take better care of their agents and managers and support FAs with just the same overrides and little more. This means that FAs face a great financial challenge to survive. Without tied agencies, FAs insurers would be able to work out what is needful for FAs. Differentiation in compensation by different insurer may still exist but FAs would have to justify their recommendation. It would not be such a bad idea if the compensation can be similar like for the general insurance industry.

6) Conclusion

The FAIR Panel has the opportunity to make fundamental changes to improve the industry, but will certainly face resistance. My view is that with growing consumerism and consumers rising education and awareness of their rights and what is taking place in the developed countries, the industry must put in motion the necessary gears for change.
Ultimately, consumers must benefit in terms of price, service, advice and product benefits. The delivery system is the key issue and my contention is that it is best done by Independent Financial Advisers.
Not the model and size of the IFAs today but perhaps about 30 to 50 sizeable firms well-managed and with well-trained planners, consultants and brokers. A few may even be public-listed. They will likely be able to charge fees for financial planning.
The key question is how they will be compensated for products carried by the product providers such that they will still be fair and objective to consumers. Will it be by standardized commissions like for the general insurance industry? This is possible and the IFAs will compete on advice and service. Premiums and product features will be the areas of concentration for insurers to attract consumers. This will undoubtedly create healthy competition and improve product features and premiums which will benefit consumers.
The deconstructing of the tied-agency structure will be a major exercise but is achievable given the will and conviction. Bear in mind fund managers are using distributors already.

A disclaimer: It should be noted that I currently own and manage an IFA but my proposal will actually generate greater competition for our firm, not lesser. My interest is that consumers’ interests are put first.

Thank you.

“IN HIS STEPS” is a Christian novel which I read in the 1970s and, although I have totally forgotten the story, I remember I was impacted by it then. The title was from 1 Peter 2:21.

21 To this you were called, because Christ suffered for you, leaving you an example, that you should follow in His steps.

The book’s challenge was for the church and for Christians to walk in Christ’s steps.

The recent Holy Land Tour by some 40 Bukit Arang members was organised as a Holy Land pilgrimage and was a tracing of the steps which Jesus took. In my mind, only Muslims and, perhaps, Roman Catholics make spiritual pilgrimages, much less Protestants and least of all Brethren. No doubt, we are pilgrims (strangers, sojourners, aliens) and life is a daily journey, and hopefully, adventure and growth. But a pilgrimage in terms of visiting the Holy Land and holy sites did not sit comfortably in my Brethren mind at first, as no land or site can be holy (although, admittedly, Moses was told he was standing on holy ground back then when God spoke to him out of the burning bush). But, as I visited the various places, I sensed there was much to be gained in understanding better the biblical places and times. More of this later.

But, firstly, why did I sign up for this journey? I tried to recall why I had not visited Israel earlier, preferring rather to go fishing in the Maldives in December many times over the last 20 years.

A few years ago, I had actually signed up to join a group to be led by another well-known pastor. The group comprised Christians from different churches. Strangely, I withdrew a few months before the trip.

But why was I one of the first few to sign up for this trip? It was more a visceral response than mental, but I think there are a few reasons.

1. It was our own church group and certainly more comfortable and more meaningful, more like a small church camp on the move. And it turned out exactly so.

2. The years of heavy expenses for my children’s university education were over and I had saved some money to defray the not exactly small travel cost.

3. Deep down, I felt it was time to see for myself what a difference it would make to my life if I understood better the geography and history of biblical places. I had heard stories of how the Bible became more alive for many who had visited Israel.

We were asked to list our expectations and to ask the Lord to speak to us as we visited each place during the trip. I think, like most others, I was hoping for a closer walk with our Lord, but I had a few other questions to which I sought answers.

1. Praying for healing for one of my friends who had suffered a serious illness;

2. Praying for God’s guidance on whether our church should have greater emphasis on healing and helping members in need and a ministry to help the poor;

3. Praying for direction for our church and, in particular, God’s special blessings of revival for which we had prayed.

Like the others, I had a lot of time to pray and, strangely, I found myself not praying for myself often, but for others. It is not that I do not need anything or am spiritually complacent, but others have more pressing needs.

What I found is that I am powerless to help much except to pray and, even then, my prayer had felt weak. There had been periods and particular moments in my life when I felt my prayers were more “effective”. Would Israel make a difference?

There is one struggle that Christians who have responsibility over others face – how would God use their lives and their ministry and prayer to help others?

We all know God hears and answers prayer and, yet, we struggle when there is an apparent “NO” or “WAIT”. As I knelt at the church built in the Garden of Gethsemane, I remembered Jesus’ prayer and how he sweated blood as He faced the painful prospect of the cross. It was a victorious “Thy Will Be Done”, but that involved His shedding His blood for us. The Via Dolorosa reminded us powerfully of the extreme physical punishment and spiritual and emotional pain Jesus endured. It was not easy, though, to enter into the spirit of Jesus’ suffering in the concrete buildings and amidst the bazaars and milling tourists. But it reminded me that some of God’s answers in His Will are not what man would regard as blessings and circumstances to rejoice over, but we can still rejoice knowing there is a greater good or final blessing for suffering and death.

Many of the spiritual conflicts faced by Christians today are because of our thinking that every experience must be enjoyable from man’s point of view – no pain, no ill health, no poverty, no enemy, no fractured relationship, no persecution, no failures, no loss of jobs, etc.

And, since these do come our way, we think the best thing to do is to get out of it quickly. And so, our prayers are limited to “God, get rid of this; get me out; remove him or remove her”.

I am not saying that we do not pray and work towards improving one’s lot spiritually, physically and emotionally. But, I am concerned about what God wants and wishes for us and, if it involves anything which may be viewed as disadvantageous for us from man’s point of view, let us still welcome it. After all, God knows what is best for us.

At one point, we were asked what we had to leave behind or give up for our Lord and this is a good question. Jesus said the disciple must be prepared to give up everything for His sake. What is most needful and right to do is from God’s viewpoint, not ours. Mary’s example of worshipping at the feet of Jesus and anointing Jesus with the expensive alabaster box of perfume is a strong reminder that it will or may cost us much or all to serve Christ.

At Capernaum, we were powerfully reminded that all the disciples of Jesus left behind businesses, families, comforts and physical safety to follow Jesus and the geography tell us it meant arduous walking, extreme weather conditions and constant threats from bandits and enemies.

Christianity is not easy and following Christ is not a bed of roses this side of heaven.

For us in Singapore, who are used to the security, safety and comforts of life, we often have to choose to go out of our comfort zone to care and minister to others, whether in evangelism, missions or service of the saints. We were reminded that King David fell into sin when he should have been at war, but chose the comforts of his palace and indulged his roving eyes and appetite from his high vantage position. How many Christians have fallen into sin or became spiritually weak after looking into certain internet sites or indulged themselves with the good life and trivial pursuits, especially in their retirement years?

The City of David made an interesting visit as we not only saw how important Jerusalem’s security was, but also how vulnerable Jerusalem was to enemies. Hezekiah’s tunnel to bring water into the walled city was a strong reminder of how we need to be watered constantly and it must be from within like the well or spring and the river of living water Jesus spoke of.

The pool of Solomon and also the pool of Bethesda, only ruins now, nevertheless, spoke of their past usefulness and brought the gospel stories to life. It was these two sites which gave me the conviction that we should minister to those who are sick and we must look out for them as Jesus saw the predicament of the lame man at the fifth colonnade at the pool of Bethesda. It is all too easy to avoid them or ensconce ourselves in a different world from them. How fitting it would be if we in Bethesda could look out for the needy in Singapore and also wider afield.

For many years, I had a tug at my spirit and conscience to minister more to the poor, especially when I read the gospel. Once poor myself, I remembered how a little help was greatly appreciated. Jesus and the apostles remembered the poor. Even when they were on support themselves, they still took collections for the poor. “Blessed are the poor in spirit” in Matthew 5:3 was recorded simply by Luke as “Blessed are you who are poor” in Luke 6:20.

At Bethany, which means House of Sorrows, we were reminded that Jesus loved to stay at the house of Lazarus, Mary and Martha, even though it was likely a humble house, probably with a single room or, at most, two rooms. An interesting note about Jesus’ statement, “Foxes have holes, birds in the air have their nests, but the son of man has nowhere to lay his head”, was that Jesus often spent the nights in caves. In his final weeks when Jesus was in Jerusalem, he preached at the temple but resorted to the Mount of Olives and likely stayed in a cave. Contrast that with our modern air-conditioned and panelled homes and resorts.

George Barna’s book entiteld “Highly Effective Churches”, which was based on surveys done of highly effective churches, stated that there was an expectation of the church to minister to the community and this included caring for the needy poor, sick, orphans, widows and hurting.

Likewise, I am reminded that there is an expectation that our elders, pastors and other leaders also learn to sacrifice in their service of God.

2 Corinthians 8:9
For you know the grace of our Lord Jesus Christ, that though he was rich, yet for your sakes he became poor, so that you through his poverty might become rich.

The many places which we visited spoke of Jesus’ sacrifice and enduring hardship. His waking up a great while before dawn to pray, and praying the whole night and agonising at the Garden of Gethsemane must have been in severely cold temperature. His travels, whether on donkeys or by foot, must have been gruelling as he ascended and descended hilly, unpaved terrain. I could not help reflecting my army training, though tough, must pale in comparison. We have become soft and need to toughen up physically and spiritually, and this calls for giving up comforts and happy pleasures and past times which, though pleasurable, do not enrich us spiritually.

At the time for sharing, I really had not formed my thoughts but just wanted to thank all who had made the pilgrimage a blessing. Unexpectedly, I let out what was really in my heart – my longing for God to revive Bukit Arang. I was excited that the elders and many active members could experience firsthand the steps of Jesus. Is this the tipping point for our members to enlarge their faith and deepen their love for God and strengthen their witness and walk?

The morning and evening devotions ministered to many. I realised that we need to concentrate on digging deeper into God’s word and drink more deeply and chew more into the meat of scriptures. The Old Testament is a vast treasure trove and holds rich veins of precious stones. Pastors, elders and teachers of God’s word must study in detail and in depth in order to benefit themselves and be a blessing to others. It is one thing to feed oneself and quite another to feed others. Instead of pandering to the hawker fare of God’s word with fast meals, there is a need for slowly chewing on and savouring the rich flavours of God’s word and invite others to feast at God’s table as well.

It is not easy to keep to what we did on the days on pilgrimage when we get back into the daily hustle and bustle with multiple tasks demanding our attention. For example, for 11 days I did not have to answer calls or emails and meet with staff and others who demand my time and attention. We have to find a way and keep to it so that we can do what God wants us to do. The way was laid down for us – to walk as Jesus walked. The trail should be clearer for those who have traced it. Others may be encouraged to do it. And better if you start at a younger age but for the older ones, better late than never.

A speech given at PromiseLand’s 2011 Retreat on 15 July 2011:

To be the best in our industry and profession,

1) We must seize opportunities and overcome challenges and dangers, and make right critical choices at major crossroads of our life and business

2) We need to know ourselves, our clients and our business environment well and construct and implement successfully effective strategies

How do we spot the opportunities?

How can we identify the dangers before they become problems?

How we do we make the right decisions in our personal, family and business life?

How do we succeed and move from mediocrity to excellence?

I. SUCCESS ETHOS

1) The secret of success is not knowing all the answer
The secret is knowing all the questions

INSPECTION + INTROSPECTION = EXPECTATION + EXCELLENCE

2) Choice, not chance, determines destiny

“Man is not the creature of circumstances; circumstances are the creatures of men.” Benjamin Disraeli

Goals are a preview of future events and experiences in your life.

The difference between a dream and a goal is a plan.

Your success can only be as big as your dream.

A POEM

I bargained with life for a penny
And life would pay no more
However, I counted my scanty store
For life is just employer
He gives you what you ask
But once you have set the wages
Why, you must bear the task
I worked for a menial’s hire
Only to learn, dismayed
That any wage I had asked of life
Life would have willingly paid

3) Daily Targets and Activities

When you know clearly what you want, you will wake up every morning excited about life.

“It is not what you do each year, each month or each week, but rather it is what you do each DAY that determines your level of success.” Tony Gordon

4) Winners Find Ways

“We will either find a way or make one.” Hannibal

Faced with a wall, you can climb over it, break through it, tunnel under it, find a door.

5) Winners Overcome Disappointments

“Success is going from failure to failure without loss of enthusiasm.” Winston Churchill

6) Winners Never Quit – and quitters never win (see Appendix I)

7) Action

Don’t let your learning lead to knowledge
Let your learning lead to action

8) Conviction

“One person with BELIEF is equal to a force of 99 who have only interest.” J S Mill

9) Courage

There are people who fear big waves and there are those who love surfing them

10) Par Excellence

“Lord, grant that I may always desire more than I can accomplish”. Michelangelo

The greatest enemy of tomorrow’s success is today’s success

Focus on self-development, not self-fulfillment

II. OPPORTUNITIES FOR YOU

1) Singapore will be leading wealth management centre in the world

2) Singapore has world’s fastest growth of millionaires

3) Singapore has all the world’s leading firms based here

4) IFAs have advantages over other channels

5) Singaporeans still underinsured and unit trust investment is still small

6) Financial planning for fees is increasingly emerging as a viable business due to educated population and increasing wealth

7) Inflow of HNWI expatriates in Singapore, e.g. British and European, QROPS

8) Business-to-Business Agreements

9) Corporate Business – ASME, SHRI, SICCC

10) Social Media

III. DANGERS

1) Move towards fees only or fee-based. Both dangers and opportunities.

2) Increase in regulation and compliance, CKA, exams

3) Rising business cost – rental, transport, staff support

4) Commoditisation and disintermediation – clients going direct

5) Increasing complexity of products and need for professional indemnity, e.g. accredited investors

6) Increasing volatility of markets and uncertainty

7) Personal pitfalls
• Health (stress)
• Addictions
• Family

8) Loss of motivation – age, overcrowdedness, health

9) Loss of confidence – information explosion, clients’ knowledge

10) Lack of structure and priorities

IV. MAKING RIGHT DECISIONS

1) Values and Principles

2) Relationships

3) Making Right Decision at Work

4) Practical Wisdom

1) Values

Ken Blanchard

The no. 1 ranked value is Ethical Behaviour

The no. 2 ranked value is Relationship

The no. 3 ranked value is Success

The no. 4 ranked value is Learning

Principles

a) Think Well
• Proactive
• Purposeful
• Future-oriented
• Analytical
• Logical
• Intuitive
• Creative
• Relational
• Sequential

b) Focus, Specialise, Prioritise
• Concentration is learned through practice
• Focus comes from clearer vision
• Specialisation comes from clear mission
• Priorities come from clear strategies and actions

c) Powerful Motivation
• Doing what you enjoy – mental
• Support by family – emotional
• Happy and healthy you – physical
• Spiritual dimension of our lives can have a big impact on our emotional being
• Get rid of
– Excess weight
– Anger
– Cynicism
– Prejudices
– Grudges
– Arguments
– Pet peeves
– Selfishness

d) Know your level (water finds its own level)

i) Beware of
• Overambition
• Pride
• Egotism

ii) Just because you are an expert at one thing does not make you an expert on anything

iii) No one can be a specialist in more than one or two areas

iv) Know yourself and do not envy

v) When presented with options, we should work with what we do well and not be side-tracked

e) Read to feed your mind on
• Your business
• Your values
• Self-improvement

If you can read yet choose not to, you are really no better off than someone who is illiterate

Every leader is a reader

f) Write
• Your thoughts, plans, to-do lists, reflections
• Write your pros and cons before deciding
• Writing forces you to think more clearly

g) Evaluate
• Remember your past success and failures
• Gain understanding and learn what formed your personality, your drive, your skills, your intelligence, your emotions
• Beware of praise, prejudices, envy

h) Have long-term vision
• Think and act long-term. You must have long range to help you from being frustrated by short-term failure
• Marriage – avoid demanding but giving
• Children – avoid absence
• Health – avoid addictions
• Money – avoid debts

i) Have quiet time alone
• Relax
• Refresh
• De-stress
• Creative

“All men’s miseries derive from not being able to sit in a quiet room alone.” Blaise Pascal

j) Beware of anger

i) Anger

“Anyone can become angry – that is easy. But to be angry with the right person, to the right degree, at the right time for the right purpose, and in the right way, this is not easy.” Aristotle

Don’t get mad at the little things

ii) Cost
• Broken relationship
• Crushed spirits
• Stress on our hearts
• Hours spent on repair and reconciliation

Anger is one of the most destructive forces in life

iii) Triggers
• An event
• Internal response
• External expression

iv) Cause
• We do not get our way
• Someone offends us or puts us down
• Disappointments
• Confronted with need to change or improve something in our lives

v) Remedy
• Identify your “hot spots”
• Recognise your inner responses and emotions
• Curb the external explosions
• Strike at the roots
• Why am I reacting?
• Is it reasonable?
• Is the incident worth the stress?

k) Be generous

i) Giving – it is God who gives you the ability to produce wealth

Towards the poor, homeless, orphans, widows, down-trodden:

“Give freely and become more wealthy; be stingy and lose everything. The generous will prosper; those who refresh others will themselves be refreshed.” Solomon

ii) Give time
• Spouse, children, friends, co-workers, others
• Funerals, baptism, birthdays, children’s games, concerts
• Award presentations, graduations
• Visiting ill and aged

iii) Give yourself

“To overcome discouragement, do not focus on yourself; get involved in the lives of other people.” Karl A Menninger, psychologist

Get involved and start helping others. There is no better exercise for the heart than reaching down and lifting people up.

l) Watch out for icebergs

i) Moral temptations

ii) Craving wealth

iii) Busyness

“Cultivate our spiritual garden. When this garden is in proper order, it is a great place and there is an abundance of busyness of defiling noise. The inner garden is a delicate place and, if not properly maintained, it will be quickly overrun by intrusive undergrowth.” Gordon MacDonald

iv) What not to do – Don’ts
• Don’t be an egotist
• Don’t give up when life is hard
• Don’t get into debt
• Don’t spend more than you can make
• Don’t give up on your marriage
• Don’t cheat on your spouse
• Don’t cheat on your employer
• Don’t neglect your children
• Don’t neglect your parents
• Don’t abandon your friends
• Don’t drink alcohol excessively
• Don’t do drugs. Ever
• Don’t smoke
• Don’t use profanity; there are other ways to communicate
• Don’t put other people down or speak badly of them
• Don’t be dishonest in business, finance or speech
• Don’t betray confidences
• Don’t give up on God and religion

2) Relationships

Relationship Do’s (see Appendix II)

a) Treat people well
• Honour – who they are, not what they do
• Respect – regardless of their gifting, position, status
• Love – acceptance of their personhood

Golden Rule:

Do unto others as you would have them to do to you.
Love your neighbour as yourself. Jesus

b) Compliment people (see Appendix III)
• Why criticise when you can compliment
• Be sincere. Don’t use empty flattery.
• Be truthful
• Don’t make a big deal out of it – just do it
• Be an equal complimenter. Don’t play favourites.

“Catch someone doing something good and tell him.” Ken Blanchard & Spencer Johnson, “The One Minute Manager”

c) Be real
• Don’t pretend to be something other than what you really are
• Be self-aware, be consistent
• Be truly focused on other people, listen to them
• Be genuinely caring and concerned
• Get feedback from friends and family

d) Be available

“God does not begin by asking us about our ability, but only about our availability; and if we then prove our dependability, He will increase our capability.”

Open door policy

e) Disagree agreeably
• Help me understand a little more of your thinking
• You may well be right. I need to think about it a bit more
• I’ve thought that, too. Here are some ideas I’ve wondered about.
• Not: Your idea is really stupid. Let me straighten you out.

Clarifying questions
• Use equivocal and affirming expressions
• I appreciate knowing how you think
• That’s a good observation. I’d like to weigh it more carefully.
• I see you have given that a lot of thought
• Have you considered …..
• Never attack the person. Let him know that your acceptance of him is not altered.

f) Speak gently and be kind

“A gentle response defuses anger
But a sharp tongue kindles a forest fire
Kind words heal and help
Cutting words, wound and pain” Solomon

g) Say “thank you”

Appreciation and affirmation motivate people more than money and rewards

h) Call back

He who is faithful in very little things is faithful also in much

i) Don’t carry a grudge

As far as it depends on you, live at peace with everyone

j) Make and keep close friends

“Not just acquaintances or colleagues
There is a friend who sticks closer than a brother” Solomon

k) Meet with a small group

Choose to meet and share openly on marriage, children, work, personal strengths, career issues

l) Make love
• People who truly love others leave an incredibly valuable legacy
• Learn to love and make love permeate your love and relationships
• Love your family, your employer, your employees, co-workers, neighbours
• Love never gives up

3) Making Right Decisions At Work

a) Work hard

“All hard work brings a profit but more talk leads only to poverty.” Solomon

“Far and away the best prize that life offers is the chance to work hard at work worth doing.” Theodore Roosevelt

Give a full day’s work for a full day’s pay
Do more than just enough to get by
Don’t give up when the task is difficult
Help others in their work
Keep learning how to do your work better
Hard work reveals your character

Some turn up their sleeves
Some turn up their noses
Some don’t turn up at all

b) Leave some things undone – WORK SMART
• Not everything that can be done should be done
• Not everything that can do should you do
• Deliberate choices not to get immersed in businesses that consume time with little results

c) Focus on contribution, not position

Whoever wants to become great among you
must be your servant, and whoever wants
to be first must be your slave Jesus

d) Learn to write well and speak well
• People judge you by your communication
• Writing is a learned skill
• Keep a brief journal and write something everyday
• Join Toastmasters Club
• Teach a class

e) Make lists
• Help you organise your day or week
• Offload your memory and free your mind
• Help keep you from forgetting things you need to do
• Help you hold on to information that otherwise might be irretrievably lost
• Relieve anxiety

f) Compete but don’t be competitive

Good leaders will always seek out people who are more gifted and skilled than they are to better the team or company

We develop our God-given gifts by education, practice, focus and training. We are stewards, not owners, of our gifts and capabilities.

g) Do what you say you will do
• It makes you as a person of your word
• It makes you a load lifter on your team
• It makes you a more valuable employee
• It honours your co-workers
• It is the right thing to do

Otherwise, undependable, unfaithful, a slacker, poor worker

“Reliable friends who do what they say are like cool drinks in sweltering heat – refreshing.” Solomon

h) Expect your leaders to disappoint you

Nobody is perfect. The best of men are but men of God.

We expect leaders to be perfect

We expect visionaries, pioneers, innovators, good managers to be positive role models

To have razor-sharp judgement, unlimited energy and patience, exemplary families, faultless morals, available 24/7

Sometimes they disappoint

i) Learn in-depth – don’t be shallow

i) Seek a tried and true expert who really knows his or her profession

ii) Don’t be a mile wide and an inch deep

j) Finish

i) If you have been entrusted with a task, see it through to the end

ii) People don’t get kudos for what they start, only for what they finish

4) Practical Wisdom

“The purpose of life is a life of purpose.” Robert Burns

The man without a purpose is like a ship without a rudder.” Thomas Carlyle

So many houses, so few homes
So many people, so few friends
So much rhetoric, so few words
So many listeners, so few heard
So many believers, so little faith
So many wishes, so little hope
So much passion, so little love
So much laughter, so little joy
So much sympathy, so few care
So much courage, so few dare
So many lessons, so few learn
So much effort, so little done
So many changes, so little difference
So many partners, so few agree
So much time, so few free

V. MOVING FROM MEDIOCRISY TO EXCELLENCE

Ideas from Dan Sullivan “How To Do Better”

1) Break through present ceiling
• Forget the past successes and repetition and stagnation
• Think about the future prospects
• Act in the present for the future through innovation and growth

2) Break away from rugged individualism and discover unique ability teamwork

3) Expect rewards only after creating value to others

4) Set BIG goals or targets
• Be prepared to impact relationships, organisational abilities and habits

5) Be clear about what you want to have changed in your life professionally and personally

6) Learn to get referral

7) Delegate everything except genius

8) Escape the causes of complexity
• Too much happening, not enough time to think and learn
• Too little security, not enough opportunity
• Too few resources, not enough leverage

9) Create a monopoly in the marketplace around an experience that only you can create for your clients

a) Make yourself crucial to the future success of your clients

b) Build structures, process and thinking patterns that allow you to create unique values

c) Always focus on creating increasing value for your clients, customers and prospects

For example, provide leadership, relationship and creativity

i) Leadership provides directions to others in order to help them deal with feelings of confusion that arise out of living in an increasingly complex world

ii) Relationship is providing a new sense of confidence when people feel isolated by change

iii) Creativity is providing new capabilities when people are feeling powerless as a result of change

10) Help others succeed
• Help others ask the right questions and make the right decisions
• Help others plan for the future
• Help others seize opportunities

“It is not the products that keep customers coming back, but the value those customers receive that they feel unable to get elsewhere.”

VI. THE FUTURE OF FINANCIAL ADVISORY BUSINESS IN SINGAPORE

1) Increasing demand for risk protection and wealth advisory

2) Movements towards financial planning approach and fee-based compensation

3) Big potential for IFAs if they achieve sufficient differentiation from the other channels and have sufficient resources

4) Increasing costs and likely fee-based compensation will mean need to go upmarket and move to accredited investor clients

5) IFAs will consolidate to keep up with higher paid-up capital and increasing compliance and operating expense

6) Greater reliance on technology and social media

7) Need to specialise and work in teams within company’s multi-platforms and multi-services

8) Need to upgrade professionalism of both company staff and representatives

9) Need to access regional markets and expatriate markets

10) Need for business partnerships at representatives and company level

For many years, I thought it was more holy and glorifying to God to be a full-time elder or pastor than to run a business or be a paid professional manager.

To be sure, you can do much good as a full-time elder and pastor and we support our church’s full-time staff who can devote their attention and time to the matters of the church. But those in business and employment, if it is God’s will for them, are able to glorify God just as much.

In his book “Business as Mission”, Michael R Baer presented his thesis that business is not something which you can use for mission but it is a mission itself.

His mission statement states that his business exists to further the expansion of the Kingdom of God among the unreached through the “seamless integration of business as mission”.

Michael traced the four phases through which a business may pass on its journey:

1. Separation

Christians with such a mindset attend church on Sunday and may serve on other days of the week in church-related activities. But the thought of bringing their faith into their professional lives never crossed their minds. These Christians are genuine believers but they simply do not see any connection between their Christianity and their business lives. Their businesses or jobs exist to provide them a living and enable them to give to the Lord’s work but their view of the Lord’s work is centred on the church.

2. Invasion

These Christians view the business world as “of the world” and, therefore, basically evil. They realise they are in it and are committed to bring Christ into the “darkness of business”. These are the men and women who view the church as the centre of light and the business is the centre of darkness. Their mission is to foray from the church into business as a kind of evangelical raiding party. It is a kind of contest they must endure because they are in business and not “in the ministry”.

3. Overlay

The word “overlay” is used figuratively as in wood being overlaid with gold or silver. The Christian who is an overlayer gilds the company with Christianity and considers it more attractive or beautiful.

Overlayers use Christian words, give generously from their profits, seek to treat employees well and offer Bible studies and prayer meetings for workers. They sincerely seek to bring Christ into their businesses. But the business is still considered wood, not considered truly good in and of itself.

4. Seamless Integration

Seamless integration means that multiple substances are joined together so that no future separation is possible.

Every aspect of the Christian’s life – home, church, leisure and business – is under the rule of God. Everything is part of God’s Kingdom and subject to God’s reign. These Christians walk with God from the prayer closet to the breakfast table, to the office, sales call, or factory. Life is a whole and is holistically submitted to God. There is no sacred and secular dichotomy. There is no business and ministry dichotomy. Business is a venue for service, just as family, church and community are.

Church members may presently see themselves in one of these four phases – separation, invasion, overlay and seamless integration.

As we seek to be more effective witnesses, let us do the following:

1. Seek to work for our clients and staff wholeheartedly as for the Lord (Ephesians 6:5-7)

2. Spend much time in prayer for our clients and staff and our Kingdom impact on them.

3. Encourage one another to live lives that invite inquiry (1 Peter 3:15)

4. Provide ministry to everyone with whom we work.

The best form of personal witnessing is through your life and sharing in the context of your employment. It starts with the belief that you are God’s appointed witness in your firm and your position.

We have to obey the Great Commission which emphasises the role of each and every Christian as the sent ones.