After earning a pretty decent amount at a tied agency when I first started working, I realised that the products I had to offer under the insurer didn’t benefit my clients. The ILPs and savings plans I was trained to sell not only weren’t great for clients, they weren’t even the best of ILPs and savings plans.
I made up my mind to leave and join an IFA with a clients-first mentality. That meant recommending products and solutions that were the best for the client, regardless whether they earned me a commission. And since good products invariably involved lower commissions, and many solutions generated no commission at all, perhaps it was no surprise that my business model failed.
A beginning and an end
My entire first year in an IFA generated a grand total of $10,398.50 in commissions. No mistake there; this number was my annual income. Contrast this to my particularly good month back in my tied agency where I earned more than $12,000 within a single month, and it should paint a rather dreary picture of what “ethical advice” entails.
Regardless, I felt so much better and at peace with my conscience than before. There was a sense of hope, even, thinking about how it’s a new beginning that could only get better. Realistically speaking, a monthly income of $866 does not make for a good living, so I thought of looking for an admin job somewhere that could supplement my living.
Unfortunately it was around this time my relationship of almost 4 years ended. I can’t say it was entirely due to my low income, but it’s safe to say that it was a major contributing factor. After all, who would want to be with someone who can hardly sustain himself financially? I remember the conversation I had with my ex shortly before the breakup and it was how eager I was about getting another job so I can continue with my financial advisory practice… “I could earn more than $3,000!” I shared enthusiastically. The tepid response I got then was quite telling in hindsight.
Surviving isn’t living
It was with this set of circumstances that I poured myself into work the next year, and brought in $22,383. An admirable effort – if I may say so myself – I more than doubled my income from the previous year. Regrettably, this amounted to less than $2,000 per month, and while I’m frugal enough to live on this amount, it meant that I could say goodbye to affording my own place, or retire early… if I could even retire at all. I certainly wouldn’t starve, but that’s not exactly a comfortable level of survival.
At this point of my life I found myself falling into a depression. Clinically diagnosed by a psychiatrist, mind you, and I suppose it was a culmination of my relationship and career problems. Aside from work, I found it almost impossible to get out of bed most of the time, preferring instead to sleep.
The next 2 years didn’t show much promise. In fact, I didn’t even bother saving my tax return for 2013 because I didn’t earn much. I was far from being in any position to pay income tax. 2014 too came and went, and my income was barely $1,000 per month.
I remember my friends going away for a trip to Japan and I was the only one who didn’t buy tickets with them because I wanted to save whatever little I had left from my income. The FOMO was real, of course, and I managed to get some cheap last-minute tickets there, intending to surprise them. Surprised they were, but equally unexpected for me was how at least one of them reacted to my presence there. He was less than ecstatic about my presence there, wondering out loud to the others whether they would now have to scale back their holiday plans to cater to my budget.
No good deed goes unpunished
Something had to change, and after years of earning low amounts of commissions I tried to charge fees to limited success. People generally weren’t willing to pay a relatively low $100 to $200 to get advice that was impartial. Instead, it was much easier to convince them to buy all sorts of policies that had thousands of dollars of embedded commissions.
No good deed goes unpunished, and there were a handful of clients who decided to mete out punishment upon me for having the gall to be 100% client first.
You’ve met unethical financial advisers, but have you heard of unethical clients? One of the most egregious cases was this client who met me on three separate appointments, each taking up at least 2 hours so that she can fully clarify her doubts and questions, on top of the hours I spent researching her case and answering questions over email and texts, only for her to purchase my recommendations with her agent friend. The same agent friend who tried to sell her an ILP of over $6,000 annual premiums, something she felt was off which is why she sought a second opinion from me.
Another person met me for advice a couple of times, and after months of follow up, she was finally keen to take up my recommendations… except her husband decided to transact the very same products with his agent friend. She told me that I’m “one of the better advisers” she had met, and told me “not to be discouraged” and “keep doing the good work” while flatly refusing to transact her portion of products through me. I suppose she and her husband also thought I was someone who had no need for food to survive, nor had any bills to pay.
I don’t think my business model failed as a result of a lack of trying; I spent more than 4 years of my life doing it full-time, and it is with great resignation that I stopped trying.
A post-financial adviser world
The rest of the story you should already know, but if you’re new around here, I set up my own tuition business, and this site and my YouTube channel also provide an income. I guess I can’t leave the world of financial advisory – a sucker for punishment perhaps – although now I’m doing it from a whole different angle. I share my knowledge on my site and YouTube, supported by ad revenue and affiliate income, and everything feels like it’s going right so far!
With so much online resources to get information and knowledge from these days, I feel like a post-financial adviser world is upon us. The best financial adviser is yourself because nobody would care about your finances as much as yourself.
I am truly humbled and touched by the many nice comments that were left on my YouTube video. “Ethics has a price” is one of the more sobering comments, and I can’t say I disagree.
Perhaps my 4+ years weren’t in vain after all, and they led to this site coming to be. At least something good came out of it 🥲
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