Who are financial advisors 

In layman terms, financial advisors are your financial planning partner. They are professionals who provide financial services to their clients based on their financial situation.

Financial advisors are also known as insurance agents, financial consultants, financial planners, relationship managers. 

Here are some financial advisors to consider:

What do financial advisors do 

Financial advisors help their clients achieve their financial goals by doing careful financial planning. Financial advisors act as consultants and guide you through many financial aspects, such as the type of bank accounts you need and the amount of money you need to save. 

Who need financial advisors 

There are three main reasons that financial advisors should step in and help. 

You feel lost 

You feel lost in planning for your financial future, and you need a more precise idea. Feeling lost is incredibly relatable when we are just starting. We have so many financial goals we want to achieve, but we have limited financial resources. For fresh graduates, the top worry and priority are paying off student loans. For young adults, adulting is getting real – saving up for the wedding and getting a new house. 

If you have a comfortable emergency fund and can afford a financial advisor’s fee without going into debt, a financial planner might be a good investment. 

You like it hassle-free

You do not like to deal with finance. Instead, you prefer someone else to take care of the financial aspects for you. The best solution for you would be to hire someone to handle your finance for you. However, you would need at least $100,000 worth of assets, to begin with. 

Qualifications to become a financial advisor in Singapore 

A person who wishes to become a financial advisor in Singapore would need to fulfil the minimum entry requirements: 

• be at least 21 years old 
• either hold a GCE ‘A’ Level certificate with passes in at least three subjects at H2 level and two subjects at H1 level 
• or an International Baccalaureate Diploma qualification 
• or a diploma awarded by a polytechnic in Singapore 
• or any other academic qualifications which are equivalent to the qualifications set out above 
• sat for and passed modules 5 to 9A from the CMFAS exam 

Who can give financial advice in Singapore

In Singapore, only authorised firms and individuals are allowed to give you financial advice. Financial advisors representatives are appointed by licensed financial advisors, banks, insurance companies or brokerages to advise financial products on their behalf. 

Before seeking advice from a financial advisor, be sure to ask for his unique representative number and check if he is qualified to give financial advice. 

Independent financial advisors 

Certain financial advisors promote their services as an independent. The firm has no financial or commercial links to its product providers. 

Financial advisory process

Assess your needs and financial situation 

To kick start the financial advisory process, be prepared to be asked a series of questions by your financial advisor. These questions usually include your finances, needs, and goals. Financial advisors need to gather sufficient information to assess your financial situation accurately and recommend you the most suitable financial products accordingly. This process is known as the financial needs analysis. 

Your financial advisor will also need to know your employment status, financial situation, and current investment portfolio. If you are considering buying a life insurance policy, your financial advisor will also require information about your dependants and the duration of financial support for each dependant. 

Recommend 

The next step of the process is making a recommendation. Your financial advisor is required to explain why the financial product or plan is suitable for you and how it can help you achieve your financial goal. He should also disclose the benefits and risks of the financial product, the premiums and charges, and early withdrawals situations. Should you wish to purchase a financial product that you are deemed unsuitable for, you will be responsible for the product. 

Receive all documents needed 

The third step of the process is the administrative matters and receiving all the documents needed. For insurance plans, these are the documents that you should have: 

• FNA documentation 
• Cover page 
• Product summary 
• Product highlights 
• Product illustration 
• The bundled product disclosure document 
• Other documents 

For investments, you should have the following documents: 

• FNA documentation 
• Product information

Review the policy

The last step of the process is the review of the policy. Your financial advisor should contact you to review your policy regularly. If your personal or financial circumstances have changed, you should approach your financial advisor for advice. 

To ensure an accurate assessment and recommendation of the most suitable product for you, you should provide accurate and complete information to your financial advisor. 

How are financial advisors paid in Singapore

In Singapore, financial advisors are considered self-employed professionals. Hence, they do not have a fixed monthly salary. Their monthly earnings are commission-based. 

Purchasing a financial product with and without advice 

If you opt for financial advice, your financial advisor should ensure that the financial product recommended to you is suitable for your needs. He should consider your monetary objectives, risk profile, investment horizon, and other relevant circumstances. 

For people who choose not to seek financial advice, you will need to ensure that the financial product you are looking at is suitable for your needs. Before you purchase the financial product, consider: 

• calculating the amount of insurance coverage you need
• decide on the length of coverage needed 
• budget to see if you can afford throughout the contract 

Top 10 Best Financial Advice for Business Owners

As a business owner, it’s important to have a solid financial plan in place to ensure the success and sustainability of your business. However, with so many different aspects of finance to consider, it can be overwhelming to know where to start. To help you out, we’ve compiled a list of the top 10 best financial advice for business owners.

1. Separate your personal and business finances.

One of the most important financial steps you can take as a business owner is to separate your personal and business finances. This means opening a separate bank account for your business and using it solely for business-related expenses. This makes it easier to track your business expenses, file your taxes, and provides legal protection in case of lawsuits.

2. Have a budget in place.

Creating a budget is crucial for any business. It allows you to manage your expenses and revenue, plan for the future, and make informed decisions about your finances. When creating a budget, be sure to factor in all of your expenses, including fixed costs such as rent and salaries, as well as variable costs such as marketing and supplies.

3. Manage your cash flow effectively.

Cash flow is the lifeblood of any business, and managing it effectively is essential for success. Make sure you have a system in place to track your cash flow and monitor it regularly. This will help you anticipate any cash flow issues and plan accordingly. Consider creating a cash reserve to cover unexpected expenses or slow periods.

4. Invest in professional accounting services.

As your business grows, managing your finances can become increasingly complex. Consider hiring a professional accountant to help you manage your finances, create financial reports, and provide strategic advice. This can save you time and money in the long run by ensuring that your finances are accurate and up-to-date.

5. Monitor and manage your debt.

Debt can be a useful tool for financing your business, but it’s important to monitor and manage it carefully. Make sure you understand the terms of any loans or lines of credit you have, and create a plan for paying them off. Avoid taking on too much debt or relying on it too heavily to finance your business.

6. Stay on top of your taxes.

Filing your taxes can be a complex process for business owners, and failing to do so correctly can result in penalties and fines. Make sure you understand your tax obligations and deadlines, and consider hiring a professional to help you file your taxes accurately and on time.

7. Plan for the long-term.

While it’s important to manage your day-to-day finances, it’s equally important to plan for the long-term success of your business. Consider creating a strategic plan that outlines your goals and objectives, and the steps you need to take to achieve them. This can help you make informed decisions about your finances and investments.

8. Diversify your investments.

Investing your money can be a smart way to grow your business, but it’s important to diversify your investments to minimize risk. Consider investing in a mix of stocks, bonds, and other assets to spread out your risk and maximize your returns.

9. Protect your assets.

As a business owner, it’s important to protect your assets in case of unexpected events such as lawsuits or natural disasters. Consider investing in insurance policies such as liability insurance, property insurance, and business interruption insurance to protect your business and its assets.

10. Review and adjust your finances regularly.

Finally, it’s important to review and adjust your finances regularly to ensure that you’re on track to meet your goals. Set aside time each month or quarter to review your finances, make any necessary adjustments, and plan for the future. This can help you stay ahead of any potential financial issues and ensure the long-term success of your business.

Conclusion 

Whether you choose to engage a financial advisor or not is up to your personal preference. If you are comfortable and confident in handling your finances, you might be better off without a financial advisor. If you are unsure of your finances and how to achieve your financial goals, you might want to seek a second opinion from a financial advisor. However, do bear in mind that engaging in a financial advisor will incur additional fees. 

Editor’s Note:

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