THE lack of trust in the financial planning industry is the key reason why majority of Singaporeans do not engage in financial planning here, even though they are conscious of the need to do so.
A survey conducted by the Financial Planning Standards Board (FPSB) between June and July last year, found that seven in 10 respondents said they did not know who to trust (for financial planning), making it the top barrier to personal financial planning.
This was followed by excessive paperwork (69 per cent), perceived confusing nature of financial planning (68 per cent) and perceived complexity of the task (66 per cent).
More than half of the Singaporean participants said they rely primarily on their friends and family for financial matters and planning (53 per cent), followed by financial planners (45 per cent).
A third were unsure whether financial planning is regulated and 15 per cent believe it is not.
The survey was carried out across 19 markets on more than 19,000 adults, including 1,001 participants from Singapore who had primary or shared responsibility for household financial decisions.
Despite being Asia's financial hub, Singaporeans consistently rank in the bottom three on confidence in their financial strategy and know-how, compared to participants from other markets.
But the poll found that Singaporeans working with certified financial planners (CFPs) express greater financial confidence.
Steven Ong, CFP and CEO of the Financial Planning Association of Singapore (FPAS), told BT: "That trust is earned over time, and unfortunately, there will always be some bad eggs who set back the progress. Building this trust requires continued efforts and those who have proven themselves successfully build strong long-term relationships with clients."
Mr Ong adds that CFPs invest, on average, three to four years to earn their certification and continually upgrade themselves in line with CFP requirements, which signals their commitment to pursue a career in financial advisory.
Almost half of the 900 CFPs in Singapore work in insurance, with almost a third working as independent financial advisers. Banks only made up about 5 per cent of CFPs.
FPSB is the owner of the international CFP certification programme outside the United States, and this survey was released by the FPAS.
Additional reporting by Grace So
This article was first published on January 15, 2016.
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