Lack of trust in financial planning sector: Poll

S'poreans aware of need to manage finances but 72% don't know who to trust for advice

Singaporeans do not have a great deal of confidence in the financial planning industry, according to a survey.

It found that 72 per cent of those polled said they do not know who to trust when it comes to getting advice about their money.

The poll also noted that 34 per cent were unsure if financial planning is regulated while 15 per cent believed that it is not - two findings that may contribute to the lack of trust.

Other barriers to financial planning highlighted by the survey included excessive paperwork and the perceived confusing nature and complexity of financial planning.

Released by the Financial Planning Association of Singapore (FPAS), the poll was conducted from June to July last year, interviewing 19,092 adults across 19 markets, including 1,001 here.

Singaporeans consistently ranked in the bottom three among the 19 markets when it came to having confidence in their financial strategy and know-how.

Singaporeans consistently ranked in the bottom three among the 19 markets when it came to having confidence in their financial strategy and know-how. This is despite the country being Asia's top financial hub and the fourth most competitive financial centre in the world.

Other key findings indicated that only 13 per cent felt strongly confident that they would achieve their financial life goals, well down on the 22 per cent globally.

And just 11 per cent said they felt very knowledgeable about financial matters, compared with 17 per cent among global respondents.

Most respondents here and across the world lack a comprehensive written financial plan. Only a third of Singapore respondents have one, about half do not and the rest are not sure.

Overall, Singaporeans are conscious of the need to manage their finances so they can plan for the future.

The survey found that most people here show strong interest in planning to get on track financially, with 53 per cent relying most on their trusted friends and family for advice while 45 per cent said they approach financial planners.

Globally, retirement planning is seen to be the most helpful service and it is not surprising that it is of greater interest to middle-aged and older consumers. On the other hand, younger people are more interested in budgeting, cash flow and debt management.

Retirement planning typically starts at age 38, so it is important for Singaporeans to realise the importance of starting from an even earlier age.

Financial professionals are most valued by Singapore respondents for creating personalised long- term plans and being a trusted source of advice, followed by helping to simplify and explain financial matters and providing peace of mind.

The poll found that Singaporeans working with certified financial planners express greater financial confidence.

FPAS chief executive Steven Ong said the weak economy and uncertain global outlook make it "crucial" for individuals to carefully evaluate their financial strategies to ensure that assets are safeguarded for the future.

"As most people start to review their finances in the new year, there's no better time than now to reinforce our financial strategies and place ourselves in a good position to achieve our financial goals," he added.

Here are three personal financial tips from FPAS: •Pay off your debts as soon as you can as interest rates are heading up; •Live below your means, which includes careful consideration on big-ticket items such as cars, property and so on; •Do not speculate when it comes to stocks, especially now. Enter the equity market for long-term investments because there is just too much uncertainty facing China, Europe and the emerging markets this year. Prudence is key.

A version of this article appeared in the print edition of The Sunday Times on January 17, 2016, with the headline 'Lack of trust in financial planning sector: Poll'. Print Edition | Subscribe