Now more than ever, service seems to be the name of the game as advisers increasingly focus on fulfilling their clients’ needs.
However, while service is a point of focus for financial planners worldwide, the type of relationship formed with a client is influenced by external factors such as personality traits and behavioural characteristics, as well as culturally specific divides.
A report by Rothschild’s international alliance partner, Putnam Investments, highlights insights from some behavioural finance research and identifies that personal behaviour can influence investment decisions, both for the client and the adviser.
“Behavioural factors can influence investment decisions at all levels, including decisions made by clients as well as investment managers,” the report says.
But behavioural differences take on even greater meaning when overlayed by cultural influences. Issues such as religion, traditions and communication all affect the relationship an adviser in a particular country will have with their clients.
Singapore is one place where the financial planning process between an adviser and client is touched by a number of factors, according to Greenfields Holdings chief executive Peter Siong.
An insurance business initially, Greenfields developed a planning side several years ago and now services about 60 of its 400 client base via six financial planners.
According to Siong, three different perspectives must be taken into account when looking at the adviser/client relationship — consumer, regulatory and distribution.
The financial planning industry is comparatively new in Singapore, and is currently receiving heavy industry promotion by the Singapore Government through the Central Providence Fund, a compulsory superannuation system, and the distribution of an information booklet on financial planning and investing to every household.
But although education has been stepped up, Siong says there are still issues that need to be addressed.
“The current perception of the uninitiated is financial planners should be able to solve all financial problems. They think every financial planner’s name should be David Copperfield,” Siong says.
But he says as the Government’s promotion of the industry sets in and levels of literacy rise, a more sophisticated and discerning clientele is gradually being created.
Aside from differences stemming from the regulatory and Government perspective, cultural differences also shape the adviser/client experience in Singapore.
“Asians are relatively more reserved in their personal financial affairs … you don’t tell people how much money you have,” Siong says.
The country’s tradition and religion also adds another element, for example, the culture’s respect for older people.
Siong says under such a structure, a financial planner attempting to contact an older man will not be given access unless they have been referred by a trusted source.
“Whereas in a western society, if the younger man has the qualifications, the older person will not question,” Siong says.
Because referrals are such a strong part of the business in Singapore, due in part to the cultural perspectives on age, hierarchy and respect, there is also a great emphasis on the initial establishment of the relationship between an adviser and client.
Greenfields Strategic Consulting managing director Ashokh Menon, also from Singapore but currently based in Malaysia, says building relationships is the initial key to doing business in Asia.
“In these cultures, respect is very important, titles are very important, and these interplay in the financial planning industry. Financial planning is based on relationships and relationship building, for example, golf days with clients,” Menon says.
The focus on building relationships is about establishing a level of trust, a universal feature to all adviser/client financial planning relationships. However, this can be a more involved process in Asian cultures, where the people are traditionally very conservative, he says.
“When an adviser asks for personal information, especially about money, people are not very comfortable with this.”
The conservative nature of the culture also presents a greater focus for the adviser to provide education on products, and this is especially so for the elderly.
“The lessons our parents taught us was to put your money in the bank. It is more difficult to get older people to understand about other products, but it is part of the service and we have to educate them and show them the benefits of the different ways of investing,” Menon says.
Differences in Malaysian society and demographics means a different cultural experience again for financial planners and their relationships with clients.
“In Malaysia, the population is greater, there is the urban and rural populations, and also the east and west divide,” Menon says.
He says there are geographical differences between people living in the country and those in the city, plus cultural differences between the Malay society and the Chinese living in Malaysia.
For example, the Chinese culture believes in the Tikoh, meaning big brother, where the eldest son in the family looks after the rest of the family, so the very concept of financial planning will also be different depending on cultural ideals.
Religion also plays a role in this region, and Menon says the large population of Muslims means it is another cultural issue for the adviser to be aware of.
“As a financial planner, you have to be more sensitive about the culture here, with the Muslim population and their times of prayer,” Menon says.
