What are the cons of using MoneyOwl? - Seedly
 

AMA Christopher Tan

Insurance

MoneyOwl

Asked by Anonymous

Asked on 23 Jan 2019

What are the cons of using MoneyOwl?

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Hi Anonymous, thank you for asking this question. Let me share how MoneyOwl works, it’s pros and cons and you can decide if we are suitable for you.

  1. MoneyOwl is set up as Singapore’s first Bionic Financial Adviser. To be Bionic means to have the best of both worlds – humans and technology. Technology integrates complex financial models into your financial plan with ease and precision. But we understand that money is very personal and involves emotions, aspirations and life decisions. That’s why both our dedicated client advisers and our technology platforms come together to journey with you in every stage of your life.
  1. In our full form, MoneyOwl will offer insurance, investment, comprehensive financial planning and will writing service. Currently, only insurance planning service is available. We will roll out the rest of the services over the next few months.
  1. The are many advantages in using MoneyOwl. But I would say that the biggest advantage is that we are conflict-free. All our advisers are salaried-based and they are not compensated based on volume sales target. They also do not participate In incentives given by product providers. As such, we are free to recommend what is best for you, including national schemes such as CPF, SSBs etc.
  1. We do this so as to create a safe space for you to do your financial planning. We come to the portal, do some planning on your own and if you need to speak to an adviser, you activate us. The advisers will give you a second opinion on your plans. Of course, if you prefer someone to guide you at the onset, nothing is to stop you from speaking to our advisers either via email, phone or face to face. It is really up to you.
  1. If you buy insurance from us, you also get a 50% agent’s commission rebate. In this way, we lower the cost of insurance for you. There is of course post sales service such as helping you with claims etc.
  1. What are the cons? At this moment, if there are any cons, I would say that there is one. We do not use products from every insurer. This is because, we do not want to put a product provider on our platform simply because they are around. Their products must be good for our clients. But unfortunately, there are also insurers whom are unwilling to put their products on our platform because they do not want their products to be compared against others. The good news is that because we are a strong advocate of low cost term insurances, the best providers of term insurances are already on our portal!

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Question Poster

on 24 Jan 2019

Thank you for your honest answer! :)
Gabriel Tham
Gabriel Tham, Kenichi Tag Team Member at Tag Team
Level 8. Wizard
Updated on 07 Jun 2019

Cons is you probably have to do more research yourself before choosing your policy.

They don't hard sell anything at all, they are not like other insurance sales people who will reach out to you and promote products. So, its all your own initiative.

Also, you need to go down to their office. Unlike agents, they are like regular salaried employees, so normal working hours too.

Anyone from moneyowl please correct me if wrong~

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Christopher Tan
Christopher Tan

on 23 Jan 2019

Thank you Gabriel! Yes you are right. We definitely don’t “prospect” you and pressure sell you anything. This you can be sure. But I would like to correct the misconception that when one uses MoneyOwl, they don’t get advice and have to research themselves. Our insurance comparator has already done the ranking for you. And if you really need advice, you can always speak to our client advisers via phone, emails or face to face. It is true that we meet our clients in office,. However, when our clients cannot meet us in office because of certain reasons like old age, disability, we do make a trip to their premise as well. And on a case by case basis, we also see clients on Saturdays. Hope this clarifies. Thank you Gabriel!
Question Poster

on 24 Jan 2019

Thanks Gabriel! :)
Luke Ho
Luke Ho
Level 6. Master
Updated on 07 Jun 2019

Hah. I gotta try this.

But I could still be wrong, so feel free to correct me.

If I had to suggest - being a Financial Advisor who's commissioned based and deals with conflict every day - it's the lack of incentive.

I don't know how good MoneyOwl Advisors are. I can only assume they either wanted less conflict (if they even thought that far ahead) or if they didn't cut it in a commission-based system.

So you either have advisors who can't handle being ethical under pressure, or who might not have had particularly strong skills in a system where the attrition rate of this profession is one of the highest amongst professions.

They could improve, but would they, outside of office hours? There's certainly no incentive to do that.

A sales-based planner has plenty more incentive to improve, in contrast - because failure to improve means death in this line while improvement means much more money. I wouldn't assume a salaried based advisor could do the same.

Anyone who's been part of this line knows that a CFP or even CHFC means nothing without the ability to execute.

And there's no greater indication than surviving in a highly saturated, competitive environment.

...so that could be one con, certainly.

Maybe also whether the entire thing service could hold up structurally if it doesn't scale enough - AXA tried to provide much lower hospital insurance fees than everyone else in 2017, and that didn't end too well. Robos in the US have started to increase their prices because it's not sustainable.

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Christopher Tan
Christopher Tan

on 24 Jan 2019

Hi Luke, when I started in the insurance industry with Prudential in 1998, I was number 2 rookie adviser for that year. In 1999, I wrote my first financial plan. By 2000, I was top 25 in Prudential. I was 2XMDRT every single year when I was with Prudental. So you can say I definitely survived and did pretty well. Well, at least by the industry's way of measurement, I did pretty well. I chose to be non-commissioned not because I could not resist the temptation or because I could not do well. I did it for a simple reason: Out of conviction that this is the best way to give advice. I mean: 1. Why do you want to put yourself in a position where you can be conflicted when you can choose not to be? 2. Why do you not want to give your clients more assurances that you will not be conflicted when you can do so? I don't think it is fair to guess whether a sales-based or fee-based/salaried-based planner has more moitvation to improve. Whether a person has the motivation to improve or not depends on a person's desire to strive towards excellence. I am not saying a sales-based or commission-based person will be a bad adviser. I am just saying that commissions is the source of conflict of interest. This is very clear even in the FA Act. MoneyOwl and Providend chose this path of ours simply because we want to mitigate this conflict. It is a path less traveled. People who join us as advisers share this same motivation, not because they are less competent.
Luke Ho
Luke Ho

on 24 Jan 2019

I read your history and watched your interviews, so I have no doubts. Incidentally, citing yourself as an example might imply that you thought I was referring to you. I really hope not (we're typing so its not like I can tell properly). If there are belief differences between us, one is certainly NOT that I think you are incompetent. Your competence and contributions to the industry is not in question at all. But that's why you run a company now (multiple companies? Certainly not understating both your knowledge and success) and people are working for you. You got much better because you own this, and I don't suppose there's evidence for the ones you employ. Those are good questions. The easiest reason would be because operational freedom and 'being my own boss' up to the extent that I am at now. If lack of conflict requires getting paid a fixed amount for the kind of work I produce, I'd rather not. I want to run my own sales and develop all the necessary skills and be rewarded for my effort. With a salary you tend not to develop many of these things. I would much prefer to manage my own conflict than to pass up on those kinds of opportunities - and its a high cost: people can make the worst assumptions of you. I don't necessarily consider it a selfish thing because we know in the financial world that solving more problems = more money. Ergo more problems are solved when I do what I do than if I were paid by salary. As a business owner, I'm sure you understand that quite well. You can choose the speed in which you're progressing, and you've certainly progressed remarkably in 2 decades. I don't disagree commissions are a source of conflict of interest. News is a bigger source of conflict of interest. Seedly certainly has conflicts of interest going on all about them. Everyone has bias, and commission is a prominent but source that's barely worth looking at in the face of that. I'd be fascinated and appalled at the same time if the advisors at MoneyOwl had specific or rigid standards for their advice because it would follow an ideologue rather than putting the client first. There's a blurry line between pushing clients to do whats best for them at their discomfort and there's meeting their needs. Not a sentence that's meant to suggest badmouthing - I'm not, but excellence, unbias, or even the degree of conflict are all subjective depending on how you run your business. Neither am I guessing (about motivation to improve). It is based on psychology and incentive. These are as clear facts as the fact that commission creates conflict. People work hard when they can solve more problems and be rewarded for it. People do not work hard when they are not paid. Unless you believed that when you give advice today and run your companies, you're making less than when you did as an FA (in which case I would certainly be hugely willing to analyze both my position as well as your mindset). The degree which someone could get an increment for work in the financial industry would never match something where if they worked that hard in an FA. Unless they lacked the skills which I mentioned already. So it would be pretty fun to compare an employee/advisor at MoneyOwl to someone like myself in a 5 year period, I think. It's a pity this conversation isn't in real life, because I'm coming off pretty antagonistic. It's not my intention. I am digging around a bit though, that much is for certain.