Thursday, March 31, 2005

"Financial Planners" Amongst the Sheep

What do you do when there is a "financial planner" foraging amongst your DG members or churchmates?

What if you know as fact that the risks of "financial planning" include:
  • the inefficiency and inaccuracy of financial planning models (one study by KPMG found that 95% of certain models had significant errors, another by PwC found 91% of certain models tested had major errors that affected bottomline numbers by more than 5%!);
  • the incompetency of many financial planners in using financial planning models;
  • the dishonesty, lack of principle and flouting of fiduciary duties by most financial planners who are paid by commission on sales. Studies have shown that financial planners often recommended the most expensive products to boost their own pay;
  • whatever other risks you would associate with relying on tarot cards and tea leaves to plan your future (if you think this is too harsh, Forbes hired five highly recommended and impressively credentialled financial advisors to prepare a comprehensive financial plan for a 52 year old executive with a net worth of about US$2.0 million. Not surprisingly, the advice ranged all over the map. One planner said put 76% of assets in stocks, another only 20%. The moral of this story? It's important for investors to understand that like soothsaying, financial planning is not a science);
and what if you also know for fact that this particular "financial planner":
  • despite the fact that irresponsible practice of financial planning might do incalculable damage to people's finances and in some circumstances imperil their lives, is not adequately trained;
  • is working on a commission-basis, so it is imperative to her livelihood that the targets buy the products whether or not they really need them;
  • badgers almost everyone she knows in church to "meet and talk";
  • appears friendly and caring and good friends with her targets but "drops [them] like a hot potato" when they refuse to discuss financial planning with her;
  • has pressured people (because she cares for them and it's good for them and it's all "tailored to their needs and goals", of course) into buying products that they now realise they don't need but can't stop paying hefty monthly payments on because of the cutthroat penalty for default?
Some people have noted that they could understand the thoughts of this "financial planner"; ARPC is a financial planner's free buffet: so many people are in good paying jobs, young enough not to have started to plan their finances, have cash to spare, are naïve, idealistic and undiscerning enough not to doubt the word and intention of a Christian sister.

I spoke with her DG leader several months ago he agreed that it was not a good state of affairs but he thought we shouldn't discourage her because even if she had improper motives for coming to church and to DG, at least she would continue to have a chance to hear the gospel. And anyway, the people in church were adults and should be able to take care of themselves. We don't have to molly-coddle them from the world like the PAP does Singapore (or used to anyway).

But shouldn't the church, the gathering of God's people, be a place of rest from the world? Can we sit by and see this sort of thing happening without doing something about it? What about those people who have been and will be used and abused by her both financially and emotionally? What about the new people exploring church life who will be turned away by this sort of predatory behaviour?

Baaah!