The sector of financial advisory firms may not get the same attention in Asian wealth management as private banks, but the sector has great upside potential, a practitioner based in Singapore says.

Financial advisors as providers of financial planning and wealth management may not have the same reputational status as the major consumer banks and insurance companies but they are increasingly gaining attention for their level of advice and services.

Professional Investment Advisory Services Pte Ltd, or “PIAS”, which has attracted some limelight from press coverage with a high-profile hire and a cluster of industry awards, is certainly keen to obtain more of this attention. And this business, which is 90 per cent-owned by UK-listed insurance and financial group Aviva, argues it has the virtues of being a dominant player in this industry.

“The financial advisory industry in Singapore is presently still in an infancy stage. Aviva saw the growth potential therefore making an investment in this industry,” Christopher Teo, chief executive of PIAS, told this publication in a recent interview. Since Aviva acquired PIAS about two years ago, the company now has around S$800 million ($591 million) of assets under advice. PIAS has more than 450 advisors and says it is now one of the leaders in the financial advisory industry and is consistently in the top-three largest insurance distributors for any of the insurance companies that it represents. (Other firms in the sector are IPP and Finexis; the three firms account for the vast majority of total market share.)

PIAS, which was established in 2001, was one of the first financial advisors to secure a financial advisor licence in Singapore. It has more than 70,000 clients ranging from mass affluent to high net worth individuals; most of them are local professionals, managers, executives and technicians, as well as small- and medium-sized business owners. It also has a team of expatriate advisors serving clients from other parts of the world such as the UK, US and Australia.

Developments
Recent weeks have been busy. The firm appointed Joseph Kwok as deputy general manager and head of product strategy, a new role in which Kwok will focus on identifying appropriate and suitable products that match the overall financial and wealth planning needs of clients. PIAS also recently hired Johnny Pay as a financial services director to head its direct sales channel. And the firm is enjoying the glow of industry awards: Global Brands Magazine recently named the firm as Best Financial Advisory Brand in Singapore 2014 and Teo scooped the prize of Best Financial Advisory Brand CEO in Singapore 2014. Global Banking and Finance Review awarded it the title of Fastest Growing Financial Advisory Firm in Singapore 2014, and Teo won Best New Financial Advisory Company CEO in Singapore 2014. Last year was a very good one for this firm.

Teo was recently seconded by Aviva to PIAS in June 2014. He was previously the founding CEO of Aviva’s joint venture start-up life insurance business in Vietnam. He has also been chief executive for an internationally owned insurance company in Thailand.

So what of the future? What lessons can such a firm learn from how, such as in the UK, there has been a regulatory/client push towards fee-based advice and away from commission payments?

Teo replied: “While we are largely now a commission-based company, we are a strong advocator of our advisors taking a comprehensive financial planning approach towards advising our clients.” As far as advisory services are concerned, he continued: “As part of the comprehensive financial planning work, we look into clients’ overall wealth being. This includes wealth protection, wealth accumulation, wealth management and wealth distribution and the best products and services are recommended based on the discerning needs of our clients.”

As a firm that is commission-based and majority-owned by a big financial group, how much pressure is PIAS under to deliver results? “We need to ensure that we continue to be a productive producer group with the ability to negotiate for better fees from our product providers so that we can derive ultimate benefits to our stakeholders that include our discerning clients as well,” he said. “One of our biggest advantages is that we are part of Aviva and we adopted the best practices of a global market brand leader.”

Teo enthuses about Aviva’s involvement since acquiring the business. “It had invested heavily in improving the overall infrastructure of the business which includes IT enhancement and human capital resources so that PIAS can capitalise on new growth opportunities through the `wealth boom’ of Asia, [of] which Singapore is seen as a major financial services hub,” he said.