“There is an absolute dearth of quality advisers and there couldn’t be a better time to implement standardisation of qualification”, said Navin Nihalani, founder and chief executive, Compass Insurance Brokers.
“Although evolved over the years, a majority of advisers are yet mere sales people with very concentrated product knowledge and only a continued education programme will change that.”
That means the advisers should also have ‘specialisation’ like in other professions: “Specialisation will help advisers focus on key areas in the clients’ financial plan.
“At Compass, we have already started working with the Chartered Institute for Securities & Investments to prepare all our advisers with the required certificate and courses that we have identified, and it has been laid out as the minimum qualification to join us,” Navin said.
These comments were in the light of the recent release of the Middle East Investment Panorama report by Dubai-based consultancy Insight Discovery, which said recruitment companies, credit card companies, loan agents, call centres, real estate agents, advisers from banks and independent financial advisers have the worst reputation in the UAE when it comes to professions.
Players also said there is a crying need for industry-recognised qualification for advisers.
“Our industry is not any different to any other and industry-recognised qualifications set a standard by which advisers have to abide. You would not expect a lawyer, doctor or accountant to practice without the right qualifications,” said Taru Singhal, head of IFA distribution Middle East, Zurich International Life.
The draft financial regulations, issued by the UAE Insurance Authority, suggest that there will be a register for individual advisers which will be regulated and reviewed based on the customer outcomes.
This will mean advisers will need to take a longer-term view on their career options and do everything possible to be successful which includes investing in themselves for ongoing profession development and looking after their customers.
“In order to attract more professionals to the industry we need to make this career option by having professional standards and certifications. We should define the merits of the profession along the lines of educating people to become financially independent,” Taru said.
Ashok Sardana, managing director of Continental Insurance Brokers, said it should be mandatory for all advisers to be qualified to some level to provide advice. “We’re dealing with people’s life savings, retirement funds, etc. and we can’t have non-qualified advisers advising people.”
“There has to be a career path for these advisers, so that in the long run, they can grow, build a long-term relationship with their clients, build a steady stream of income and a wide client base. The profession is going through consolidation. It’s an ongoing process. Advisers keep leaving,” he said adding that his company Continental is increasing its sales force and is very bullish on the growth in the business.
Weeding out bad advisers
With the new financial regulations expected soon, there will be a massive shift in the entire landscape of financial services and it’s for the better for clients, principals as well as advisers.
“It will weed out the bad advisers but there is a flip side to it too. If the regulation is rolled out as per the last draft received, it will also take a lot of quality advisers away from the industry and that could lead to a lack of good advice for clients which can also be quite dangerous in the long run. A lot of advisers will tend to work with a lot more clients to make ends meet and that could also lead to lesser individualised attention for clients. All in all, it will be a balancing act,” Navin said.
Taru also subscribes to this view. “Every profession should be remunerated for the service they provide and our industry is no different. We would encourage financial advisers to upgrade their qualification and keep learning, like they say ‘investment in knowledge is the best investment you will make’.
“This will not only show to customers that they have suitable qualifications to do their roles but should also increase the level of professionalism in the industry. Regulators, providers and advisers all have a role to play in the evolution of the market in the UAE.
“We support this industry and welcome more advisers seeing this as a career option.”
Responding to the survey finding that (among the expats interviewed) only 43% have actually used the services of an adviser; and, of those, 43% have positive views of advisers, while 19% have negative views, Sardana said: “If we have long-term commitment to the profession, we have to give the right advice to the client.
“When the tide rises, all the ships rise at the same time. If we build our credibility and do justice to the profession, the industry will benefit. If everyone in the industry thinks that way, it could overcome the negative stereotype.”