Anderson says the greatest achievement during the course of his career has been growing the company from a four-man band in 2009, when it had just $25m under advice.Today, AAM employs 110 people who work in a new 10,000sq ft office in Singapore’s popular banking district.
When asked what has been the key to the firm’s success, Dabbs says: “Being very transparent with everybody that has come on board. Everyone knows exactly what they will be paid and what the targets are.”
Playing Fair
With such a long-standing presence on the island republic, Dabbs and Anderson are well-placed to comment on Singapore’s financial advice journey, which in recent years has seen an exodus of life companies coupled with the introduction of a raft of new regulations.
In 2001, the Monetary Authority of Singapore (MAS) introduced the Financial Advisers Act, which gave regulated and licensed advisers the go-ahead to give advice to expats living there.
More recently, the regulator, as part of its Financial Advisory Industry Review (Fair), introduced a balanced scorecard initiative in April last year.
Firms were given a one-year grace period to implement the scorecard, which requires that an individual, other than the wealth manager or financial adviser, must contact clients pre-, during and post-sale to ensure each and every card is completed.
The process involves more than 40 checkpoints for each case.
Dabbs says AAM has stayed ahead of the curve on implementing the scheme by building a good compliance team. For every seven advisers there is one compliance officer.
“We are fortunate here. We have a checking process where we have a pre-sign-off, then we have a post-transaction and then a compliance sign-off, which makes sure everything is checked,” he says.
“If 100% of all procedures are checked and they are correct, that generates a balance scorecard of A. In that sense, we are quite well prepared.”
Anderson believes it is too early to tell how the scorecard system has affected Singapore’s advice industry, while Dabbs points out it has certainly increased the cost of doing business.
He says: “You have to be of a certain size now in Singapore to be able to afford to transact business.”
If the cap fits…
In January next year, Singapore will also introduce a 55% cap on the commission financial advisers receive from the sale of life insurance policies in the first year, with the remainder being paid out over the following five years or the outstanding premium payment years, depending on which is shorter.
Originally scheduled to come into effect in January 2016, it was delayed by 12 months after the industry argued more time was needed to implement the rules.
Dabbs and Anderson reveal they are not too concerned about the cap as, like many advisory firms in Hong Kong and the UK, AAM has adapted to a recurring fee model.
“We are not that concerned in the sense that a lot of business we have been writing recently is something we call ‘zizo’, which is zero in, zero out type of portfolio bond business. We are not taking any commission upfront anyway, we’re doing it purely on the advisory fee,” says Dabbs.
