ADVISERS have a key role to play in reviving a financial service sector battered by the downturn and the Lehman Brothers fiasco, but their focus needs to be less on sales and more on client needs.

 

The call came from Mr M. Salim, the outgoing president of the Association of Financial Advisers Singapore, or AFA(S), who expressed concerned over the damage the sector sustained from Lehman's fall.

 

Thousands of investors in Singapore lost large sums when investments on structured products linked to Lehman were rendered worthless in the wake of the United States investment bank's bankruptcy in September last year.

 

Mr Salim told the Eighth AFA(S) Congress at the Grand Copthorne Waterfront Hotel yesterday that complaints of mis-selling from investors who lost cash on products like Lehman Minibonds were a wake-up call for practitioners.

 

'We have to be very clear: Anyone that becomes a financial adviser... knows that he has to serve the client's interests first.'

 

He added that financial advisers will need to serve clients 'at a higher level' because they carry a wider range of products and deliver an extensive range of financial planning services.

 

'So he cannot treat it as just another sale...It is an advisory process, and he must come with the desire and passion to provide advisory services not just to build a business or a clientele and make as much money as he can,' Mr Salim said. 'Advisers need to help their clients look at their needs first.'

 

He told the more than 300 industry practitioners at the event that the structured products scandal changed the way people approached financial planning, and advisers will have to adapt to that change.

 

'In the past, consumers will tend to talk only about products and not their needs...Now, most of them are a little more conscious that not all products are suitable for them,' he said. 'But the question is whether they can maintain that mindset throughout and not forget that when the market recovers.'

 

To ensure that the industry remains robust, Mr Salim wants the regulatory regime updated and is pushing for more efforts to educate the public.

 

He said the Monetary Authority of Singapore's (MAS) latest guidelines on promoting good market practices are a positive step, as they supplement the Financial Advisers Act.

 

'The latest (MAS) consultation paper that requires all financial advisers and reps to approach clients on an advisory basis is a good move,' he said.

 

Mr Salim, who was giving his last address as AFA(S) president, said a lot more needs to be done in terms of public education, something he hopes industry players will continue to focus on.