Chris: Hello, everyone. Thank you so much for watching and hope you are staying safe and your family is well during this time of the COVID-19 pandemic. For those of you who are watching us for the first time, let me just quickly introduce Providend. Providend is Singapore’s First and, probably still, The Sole Fee-Only Comprehensive Wealth Management Firm. And we specialise in retirement planning as well as helping our clients live their purpose and their life goals by using their wealth as an enabler. What differentiates us from the rest is that as a fee-only firm, we do not take commissions for giving advice. It is our way of being on the side of our clients, staying conflict-free.
We were established almost 20 years ago in 2001 and have been managing our clients’ wealth through different market cycles, crises and crashes, including the 2008 Global Financial Crisis. From time to time, we produce reflective articles and videos like this to share our thoughts on wealth management and personal finance.
So today, I’m very happy to be joined by two of my colleagues. First will be Max, our Head of Expat Advisory and also Chief Editor of maxkeeling.com. And next will be Kyith, our Senior Solutions Specialist, as well as Chief Editor of a very well-known blog. I think some of us, we read that blog and that is Investment Moats. So welcome to both Max and Kyith.
Kyith: Hi, Chris. Hi, Everyone.
Chris: So to both of you, I’m just going to start by asking both of you to tell us a little bit about yourself. Because some of our viewers out there, they might just want to get to know you a little bit better, especially for your followers. They read your blogs but they might never get a chance to see you face to face, especially for Kyith. Kyith doesn’t do a lot of videos.
So I’m going to first ask Max, our Head of Expat Advisory. Maybe tell us a little bit about yourself. What did you do before starting this career in wealth management? And maybe tell us also what made you do what you do now?
Max: Okay. So yes, I’m Max Keeling. I’m originally from the U.K. So I’ve been a Chartered Accountant for 20 years. So prior to joining Providend, which I did in 2018, I spent about 16 years in various different finance type roles. So I worked at KPMG, General Electric, and then I did 10 years at Barclays Bank. I left Barclays in 2016 and was very frustrated and angry at how poor the financial advice space was for expats. And I felt at the time that I could avoid help people avoid having to engage with financial advisers completely. So I spent 2 years then coaching expats on their personal finances across Asia and the Middle East. Purely in an educational role all through one-on-one video calls and helping people make informed decisions themselves. And then I found about half my clients still wanted to use a third party to kind of help project manage them around ongoing financial advice and investments. So after 2 years, I reluctantly decided to become a regulated financial adviser based in Singapore so I could fulfil that role for the clients that I’d built up.
Chris: So actually, Max, were you a victim to wealth management yourself?
Max: I was actually, yeah. So that was one of the catalysts as well. When I was working at Barclays, I got approached by one of the many expat financial advisory firms. You know, I’m an accountant. I’m meant to be educated. I mean, a finance function working at a bank. And I signed up. And soon after, I came across a blog called andrewhallum.com. So he was an expat teacher in Singapore at the American school and he’s written various different books. And I read his book and I was like, “What have I done?” Realised there was a problem. It was like a 20 years insurance product. And luckily, I got out after 18 months because the insurance wrapper that they use decided to exit Asia and they paid all their money back.
Chris: I think I know which insurance company was that.
Max: It was, I think it was like Standard Life or something like that. And that was probably about 2015. So when 2016 came along, I started to already, I was quite evangelical about it like I was trying to help a lot of people. People were asking me questions. And that was the genesis of getting into this kind of coaching space, of trying to show people that they can do it themselves.
Chris: Thanks, Max. Thanks for sharing. Kyith, how about yourself?
Kyith: I think I’m probably almost the same age as Max but I took a very different route from him. So I spend like about, since graduating from NUS, about 15 years of my career helping other companies manage their IT systems. So and I think along the way when I started my investing journey when I got out from university, I decided to start writing a blog back then. Because all these blogging technologies were still in their infancy.
So I started writing. And originally it started off more like chronicling my investing, what I learned from investing. But I think along the way, I realised that I got better. And then a lot of people that were actually starting at the same, the previous phase where I was, they wanted to learn about it. So I began to share more of all the different things that I learned from wealth building. And that is still till today. So that is also one of the reasons how I got into Providend in the first place. Because somewhere along the journey, Investment Moats and Providend crossed paths with each other. So Chris and I became friends. We turned a business relationship to a friendship.
And then probably about 1 or 2 years ago, Chris asked whether I would like to join Providend or not. He actually propositioned such that I can do what I like and that’s part of my main job. So I think about it. I think that’s pretty attractive. But it’s also, at that same time, I thought of taking a break from work as well. So everything ends up pretty nice and it has been quite a good experience since then.
Chris: Thanks, Kyith for sharing. For those of you who do not know, Kyith wrote like a 15000 words thesis on Dimensional. And one of the reasons why I ask Kyith to join us was because all this while when I was reading his blog, I realised that actually Kyith actually knows a lot more than financial advisers. Since he’s had so much passion, I thought it’d be great if I can bring him, you know, ask him to join us, you know. Do all the research that he wants to do, you know. I did tell him that, you know, we might not use everything that he produced but for those that it’s useful for our clients, yeah, we will use it. And I think I must say that we had, so far, had a great relationship since Kyith joined us. He has been, you know, like the guy that on every morning, he will shoot us with plenty of things that he read about.
So that’s Kyith. So Max, how about yourself? I mean Kyith talked about why he joined Providend. Maybe you can share a little bit with us, you know, why is an, you know, in Singapore, we say Ang Moh or a Caucasian, why did you join a firm that is predominantly Chinese or Asian? You know, why not join someone else who is quote – unquote, “like you”?
Max: Yeah. Why? It was easy for me really. Because I had been learning a lot about what a good investment solution looks like. I’d started to interview other advisers around Asia because, like I said, half the people I worked with wanted to use an adviser. And at the time, I didn’t want to do it so I was trying to find out who was the best. And so then I was interviewing advisers in Hong Kong, Singapore, the U.K., And I actually realised I’d probably enjoy it more than all the advisers that I met as well. So a bit like Kyith, I was a bit geeky about stuff. And so when I decided, right, I think I want to become an adviser, I had a very clear idea of what kind of firm I wanted to represent. And they had to be fee-only. They had to share my passion for like real financial planning that’s only use low-cost tracker funds like Vanguard or iShares. They had to have access to Dimensional Fund Advisors, which most people have never heard of. But I’d come to find out that that was a hallmark of excellence for other things. And literally, Providend was the only firm in Singapore that checked all those boxes.
So I think we started to chat at the back end of 2017 about what my mission was and what I had been doing. And you would talk about what you had been doing with the Singapore market. And then I ended up joining in like April 2018. But literally, there’s hardly any firms that I’m sure we’ll get into, but there’s hardly. I know I could have approached some of the expat firms. I’m sure they would have been happy to have me. But after preaching the gospel for 2 or 3, 4 years of low-cost tracker funds and fee-only and all of that, there’re actually not many places you can go if you really want to go down that journey.
Chris: Thanks for sharing, Max. I remember, if I’m not wrong, I think when we first met, it was at a hotel.
Chris: And this guy has got so much passion, you know. And I mean he’s like researching a lot already to investing and wealth management, you know, and all that. And for those of you who have not read his blog, it is maxkeeling.com. I mean, like Kyith, he’s producing videos, writing articles non-stop. Yes, so we are very glad to have Max serves the expat market.
And I’m going to ask Max later on to share a bit more. But I just want to say that, you know, to me, Max reminds me of those advisers who are really passionate about doing the right thing. And also the way he approached financial planning is very different. Most advisers will approach financial planning or retirement planning or wealth management as in you work very hard and then, you know, you retire later. But I’ll tell you that Max is not like that. He believes in living life now. You know, not pushing everything to the end, which is a very interesting way of looking at planning for yourself. And I’m going to ask Max later on to share more about that.
But for now, I want to ask Max. Max, you know, you have been working at the expat space for a while right now. You know so-call your people. You know, they are foreigners living in Singapore. What are some of the problems that you feel they have and how do you see your part as, how do you see yourself as part of the solutions for them?
Max: Yeah. So I guess what we tend to see is a lot of expats are accumulating cash and they’re not sure what to do with it. So they’re often in quite senior roles. They’re in low tax environments. Many companies don’t provide pension schemes like you might find in their home country. So obviously if you’re a PR, you’ve got CPF, which is adding kind of automated future provisions. But that’s usually not adequate for their future retirement needs. So some expats can feel quite cash-rich, which obviously is a good problem to have. And what I’ve seen is you’ve kind of got two options. You’ve got to either got to go down the DIY route and do it yourself and invest yourself or you got to use an adviser.
And what I’ve seen is most people are not good DIY investors. So part of that is because they’re time-poor. So pre this COVID lockdown, you know, a lot of people have got international roles or Asia-based roles. They’re travelling a lot. They’ve got senior roles, like I’ve said, so they haven’t got much time. A lot of people are not that interested in investing so they don’t want to go and research funds and all that kind of stuff. And then even the ones that do like investing, don’t tend to think about doing the financial planning piece. They don’t stand back and think about what are the life and financial goals they want to achieve in the next 10, 20 or even 50 years. So what I tend to find is expats end up with a mixed bag of investments with no coherent kind of plan around it.
So then you say, ok, well, if you’re not going to do it yourself because of all those issues then go to a financial adviser. There’re 3 issues I’ve seen with financial advice in Singapore. Firstly, it’s the commission structure. So as we see in Singapore, which is the same as Hong Kong and other parts of Asia, whilst you are legally can be called a financial adviser, you know, you’ve done all the exams and you’re licensed, you’re actually a financial salesperson. And product selling in Singapore is mainly commission-based. So the salesperson earns an upfront commission for signing up new clients and the product provider then recoups that commission back over a period of time from you, the end investor. So higher fees to you as the investor means lower long term expected returns compared to a non-commission-based structure.
The second thing that I think is an issue within Singapore is we haven’t got many financial planners. So because being an expat financial salesperson is so lucrative in Singapore, very few people become real financial planners. And what I mean by that is kind of real independent help to help you understand where you are now, where you want to get to, and then support that person over a period of time for them to kind of achieve their goals. So whether that could be going through redundancy or it’s things like what we’re going through now, the volatility in 2020.
And then the third thing that I’ve been really surprised at but maybe not a surprise now after doing this for kind of four years or so, is the portfolios that people tend to end up in are pretty poor, whether it’s from a private bank or another adviser. So firstly, it goes back to the commission thing in that they tend to use funds that pay them the highest commission rather than what’s best for the adviser. And secondly, they don’t tend to be constructed that well. So they’re not kind of evidence-based in terms of looking at what’s the last hundred years told us in terms of how you should build a portfolio. And they don’t really use academic evidence around what to do.
So you end up with kind of expat families that are accumulating cash, they’re not investing themselves, they haven’t got the time or what they are putting in that kind of dabble in and there’s no coherent plan. And then the only professionals, so to speak, that they can go to are really financial salespeople. They’re not building financial plans. They’re not independent in terms of the solutions they can deliver. They get paid up front commission. So there’s no incentive for them to stay with you over the next 5, 10, 15 years. And then on top of that, the portfolio they’re putting you in isn’t that good. So these are the issues that have kind of come up a lot over the last 4 years and I just increasingly see. And I know it’s similar in the non-expat space as well but it is prevalent in the expat world.
Kyith: So, Max, where do you see the greatest value where a financial adviser can actually add value to a person?
Max: Well, if you look at, say, the U.S. or the U.K. or some firms in Australia, you can find like amazing financial planning firms that are doing like amazing customer service. They’re doing real financial planning. They’re using amazing tools to help people. They’ve got evidence-based investment solutions. And I mean, Chris has been to the U.S. to go and visit some. I’ve gone to the U.K. and visited quite a lot firms. And when you see it done properly, you see that an adviser can genuinely help people achieve more financial success than they would have done on their own. Because like I said, most people are not looking at this all the time. And for me, that’s the vision of what I want to be able to do at Providend. And I think that’s what we’re trying to do across everything is how can we take the best of what is already being done in other countries, how can we look at what other financial planning firms are doing? And it’s the financial planning piece that adds a lot of value for people because they might work for big corporates like I did. And you get asked what your career goals are every year. And you set objectives and then you have a half-yearly catch up with your boss about how are you getting on. And people never do that with their lives. Very few people.
So I think, being in that role of just getting people to think about it, document it. We find that over time, helps a lot. I think using the right planning tools adds a lot of value. So again, we don’t see firms in Asia really using planning tools or if you do, it’s the odd advisers. It’s not consistent. Whereas we’re trying to bring kind of best-of-class tools and bring them over to Singapore for the first time. Then it’s the portfolio construction like I talked about. It’s not the Max Keeling way of investing or the Providend way of investing. It’s saying like Nobel prize-winning economists and academics solved this like 30, 40 years ago and told us how to build stuff. And then companies like Vanguard and Dimensional have created very low-cost, amazingly diversified funds that you can use to build. And so actually the solutions are often quite simple. The elegance in their solution. I think we can add a lot of value in terms of helping people do that. That’s really it. If you can combine it, a bit like being a coach in terms of help people understand what they might be able to achieve in the medium to long term and then say, “Hey, this is how you should go and construct it”. It sounds simple but it’s actually quite hard because a lot of people don’t do it that way.
Chris: Thanks for sharing, Max. Well, I’m quite sure many of the financial practitioners and institutions out there, if they watch this video, they wouldn’t be very happy with what you are saying. I’m so glad you are on our side. But well, I mean, we didn’t make this video for them. We made this video for consumers. And I’m not sure how many of you actually experience what Max has said. You know, you get a hotchpotch of financial products. You know, if you really look at it, they’re really expensive. You know, and they’re not integrated. They’re all done piecemeal. You see someone, you get sold one product. You see another person, you know, you get something else. Now, if you have a similar experience, please share with us. We would love to hear from you.
I’m going to turn now to Kyith. And like I said earlier, Kyith, you know, you have been blogging for a long time. You’re one of the first few financial bloggers. I mean before even people hear of financial blogging, I mean, you have already started this more than a decade. And you have a huge following of readers. How many readers do you, how many followers do you have, Kyith? I’m not sure.
Kyith: Ok, I didn’t count.
Chris: You didn’t count as well?
Kyith: There’s quite a lot. But you’re making me sound like an old man.
Chris: Well, I mean, well, relatively speaking, I mean, compared to many of the blogs out there, I mean, you’re a dinosaur, right? You have been doing this for a long, long time.
Kyith: Yes, that’s a good term. In terms of blogging.
Chris: But, you know, and honestly, if I look at your blog aesthetically is not as nice as the rest of the blogs out there. But if people are going for content, when they read the blog, they know that this guy actually knows his stuff. You know, and you have readers from all walks of life. Different wealth levels. And when it comes to investing, maybe you want to share with us? Because Max and me, both of us believe that most people, they cannot DIY. But you are at the end of that space, that spectrum because you are blogging and a lot of your readers, perhaps, they are trying to DIY. What do you think? You know, what do you think? Are there some gaps with people who are investing in Singapore?
Kyith: I think what I observe is that everyone wishes to get better in their wealth building. So a lot of my target audience is a bit different from Max in the sense that I get people from all walks of life who come across my content. So this could be a lawyer who wishes to learn about wealth building. This could be students who are like us, a little nerdy and geeky who wish to do all the right things. And then you have mainly all the working people who are in the middle class sandwiched by their parents and kids. And then they wish to get to a better position.
So due to the kind of content that I write or usually because I write a lot on active stock investing, value investing, dividend investing as well as something similar to what our clients use at Providend which is a passive portfolio of low-cost funds.
So I guess everyone wants to get better. But the problem is that they’ve been hearing a lot of different things from a lot of different sources. Like they will be conscientious to read up on their own, whether it’s from books or they went to some seminars. But at the end of the day, right, they are not sure how easy or difficult to do something and whether if you continue to do this thing, whether it works or not.
So what I realised along the way that some of the challenges people felt is that investing is quite special because you’ll probably only know the result at the end of the journey. But during this period, right, you have to go through it.
And then usually you don’t have people to ask like say, for example, “The books say something like this, how to invest this way. Does it work in real life?” So this is what active investing is about. And one of the key things that I realised that people tend to not be able to gauge so well is the level of effort that is required for different kinds of wealth building.
So usually, the idea is that once they read up on something and they learn something for a period of time, they have the idea that they probably know a lot already. But essentially what they don’t realise is that what they actually know is actually not a lot and maybe not enough for them to build wealth sustainably.
So I have the privilege because not just for myself but my peers around me, I have friends who conduct courses in trading, value investing. A lot of my friends to active dividend investing and all. So I have a glimpse of like what are some of the challenges that you seldom hear out there which is that people don’t realise that you have to be quite conscientious in this. You have to invest in effort upfront to learn about what are the pros and cons and what are the daily things that you need to do. And then along the way, there is recurring cost like, let’s say, for example, trading, right? You need to screen for these companies. You need to screen for these trades. And then you have to execute these trades on a daily, weekly basis. So even for those advocates of, let’s say, value investing, right? You have to understand your own company and you have to understand your competitors and prospective companies. So that’s a lot of work involved.
And I guess what I feel is that people tend to couldn’t judge it so well. It’s only that they’re enthusiastic about it. They try for 1 or 2 years and then they come back to me and say that, “It doesn’t seem like it’s a set-and-forget strategy”.
Max: I find the same, Kyith, that for a long time, I did individual stock trading. You know, being an accountant, I love spreadsheets. I thought, right, I must be able to analyse companies, pay down balance sheets. And, you know, I loved Warren Buffet and read everything that’s ever been put out on him. But you realise it’s such a lot of time and effort. And you know, I’ve come across people that have dabbled in individual stocks and they like the idea of research and saying maybe they really like Apple products so they want to buy Apple. Or like Tesla. Which is fine.
So one thing that I’ve come across with people is, let’s say you have a $1,000,000 to invest and that’s your retirement pot. I tend to find even if you wanted to invest in individual stocks, people do not put their $1,000,000 into individual stocks. What they do is they play around and they maybe put $50,000 into stocks. And so they tell all their friends and family that, “Yeah, I’m an investor! I bought Tesla and it doubled”. And often people think all of their work colleagues must be, “Wow! That guy must be really sophisticated!” You know, I worked in banking for kind of 12, 13 years. It’s a lot of bravado. Everyone assumes everyone else knows what they’re doing because I’ll be like, “Oh this guy bought Tesla and it went up”. And what I’m finding is people are putting a very small amount of their wealth. They haven’t fully committed to saying, “You know what, I don’t want to do what Max is talking about. I’m going to buy individual stocks”. They don’t put the $1,000,000 in. They stay in cash. And do you find that with what you’ve seen people that are doing individual stock trading, they’re actually not committing all of their financial resources?
Kyith: What I observe is it depends on how assured the person is when it comes to their wealth building because there are some that they have quite high conviction that they have the competency to do this well. So they would dare, if they have $1,000,000, they would dare to put $1,000,000 inside. Now is that conviction and their competency well-placed? That is debatable. Some of them are. Some of them are not.
So what you’re going to get if let’s say, you don’t have the adequate competency is that you’re going to have some, you might suffer some catastrophe capital impairment. And then that would really affect how you view your investing but also, it will set back your wealth building and all that.
But I’ve also seen the other side of things. They are learning about this, they’re probably around about 40 and 50 (years old). They realise that they do not have enough time. And they chance upon all these terms that their friends talk about – dividend investing, value investing and even passive index investing. So they know that they don’t have time. And then they want to give it a try. But because they didn’t delve very deep into it, right? They don’t have that conviction to actually put in the money.
So that would be something like what you’ve said. They have $1,000,000 but they would probably put in $100,000 or $50,000. And the worst thing is maybe that $50,000, they don’t get very good results from it. And then the other $950,000, they’ll be sitting there, not doing anything.
Max: I think it comes back to, you know, when you said, where can you add value to people? I think definitely what I’ve seen and I’ve seen other advisers at Providend, what we’ve seen with Singaporean clients is if you haven’t got a robust plan and you haven’t got the confidence in it, you’re not actually that confident in the investment strategy. And like you said, if you’re not sure what’s going to work and you’re not going to know until it’s at the end, I mean, it did work or it didn’t. So you see people, they don’t really trust their advisers or their banks. So when the private bank comes along, they’ll put a little bit with them and then they’ll have a little bit of dividend stocks. And then they’ll come across your blog and read that. And then they’ll meet someone else. Because they probably don’t fully trust the whole plan. And they do end up with a lot in cash still. And I think that’s an interesting transformation that you really appreciate when you build trust with someone and you can build up an independent plan, independent of what they going to invest in. You see the commitment, right, that you’re talking about, a lot higher. That people say, “Actually, you know what? I know I need to put everything in. I’m now 50. I’ve got X number of years till I want to reach financial independence”. The conviction is there because now they feel confident rather than this kind of dropping things around different advisers.
Chris: Yeah and I also feel that you know, sometimes whether we read the blogs, we read all the books and we have all the knowledge. A lot of it is a lot of head knowledge. And even when we write a plan. At Providend, we say that you know, people know that they need to start investing because they have a goal that needs to be funded by money. They may know that they have the ability to stay invested. But the problem with all these things, it sits on the head and there is a great distance between the head and the heart, because the heart is very unwilling. And a lot of times our heart, whether they are willing or unwilling, it is due to our relationship with money, our past experiences, the way we are brought up – whether we come from a rich family, poor family and all that. And I think when you use an adviser, it is not just about coming out with that plan. You know, all this head knowledge of how to invest, whether to invest in diversified portfolio.
I think, for me as a financial adviser, I also strongly believe that the role of the adviser is to take care of the heart part. It’s to understand how your heart feels. Because investing is a long journey and that journey is not easy. I mean, like now, we know right now, even as we speak, we are in the middle of a COVID-19 pandemic. That’s why we are at home and sometimes you hear all this background noise and all that. The markets are crazy. Yes and you know, when you are reading, you think you can do it. But then when the markets are going down, the heart can’t take it. And the role of the adviser is really there to guide you, to hold you, to remind you. And the role of the adviser is also because they understand your background, they understand your relationship with money, and that’s why they can guide you properly.
And the other thing that we do here at Providend, we’re very proud that we do it, is that now first meeting, we talk about aspirations. We talk about values of money. We talk about what money means to you. Because we know that money is not a goal, money is an enabler. And we really want to know what are your values? What are your aspirations? Because it’s not just about having lots of money, but it’s about, you know, how do you live life, you know, with money?
Now, I’m going to ask Max. I know this video is very long and I actually want to stop it, but I don’t want to lose this chance to interview Max on that. But before I’m going to ask Max to talk about, you know, his lifestyle now. You know, his belief in living life today and not just the future. I want to throw a spanner to Kyith and I didn’t really prepare him for this question. Because I remember Kyith kept telling me. Because Kyith had the chance to be out there looking at Providend as an outsider for many years. And every advisory firm, they will say that, “We do good quality work. We do planning”. Every adviser says they write a plan, right? And Kyith has that opportunity to sit outside there looking at Providend. But now he is in. He is not in the dark side. He is now on the bright side, right? And many times in our conversations, Kyith kept on telling me, he said, “You know, you have got to find a way to convince clients that you have value. Because this thing about value is so difficult to convince, especially in financial services. Because it’s not tangible. Everybody says they do asset allocation, you know, and all of that, right? So Kyith has been telling me, “You got to find a way to show value”. Maybe Kyith, you want to explain why you kept on telling me that, you know, Providend has got to find a way to show value.
Kyith: Okay. I think this is a bit difficult answering this question when my boss is sitting in front of me and all. But I think why I stress that so much was that it’s also because I’m quite new to Providend. When I come in, right, I still have not come to grips with how do the clients feel about the financial planning process and whether they get enough value or not?
So I have to slowly observe this along the way like I need to talk to Max. And I need to talk to some of the more experienced advisers but also newer advisers. Hear their clients’ experience, right. Then you realise that, “Ok, there are different areas that the adviser can add value to the client.
The nature of our business is such that it is difficult for the clients to see the value before they actually pay money for it. Because one thing that I picked up from what Max talked about is I think a lot of people would really appreciate a financial confidant to go along with them on this journey. They don’t have the time for these kind of things. But what they want is that any time, let’s say, if you have this kind of situation, they need someone that they trust but competent as well to go along this journey with them.
What is the greatest value, what they are actually looking for is for someone to walk this journey with them. Competent and has the same integrity for them to always bounce these ideas off.
At the start, they’re probably not sure whether this adviser is trustworthy or competent enough. So a lot of times, they’ll probably need to wait until 3 to 4 years later. Maybe after a few of these incidents, these market challenges, in order for them to really know that, “Ok, this is what I’m paying the money for. This is the value that I’m trying to get”. So the unfortunate thing about this business is that we won’t know about it until the end.
So that’s why initially I find that I’m always keeping a lookout to see where Providend can actually add more value to the clients.
Chris: Thanks Kyith. Yes, I think it’s very hard because when Kyith asked me, I kept telling him it’s very difficult. I mean, I would say that our values are on three levels.
One is I mean, it’s the thoroughness of the work. And how do you market thoroughness of work unless you experience it, right? Because everybody says they do a plan. But you need to see the plan then you realise that, “Wow! It’s really thorough!” Secondly is knowledge. I mean, everybody says that, “You know, I have got knowledge”. But how do you actually display knowledge until the client actually starts talking to you, right? And the third value, it’s about, as I mentioned earlier, is that understanding of money not being a goal, money being an enabler. It’s the understanding that investing is not just about knowledge but it’s about a person’s relationship with money. And that’s why we spend like 1 1/2 hours, 2 hours in our first meeting discovering that from the client. How do you show that value in marketing, right? Very, very hard unless you experience it. But thanks Kyith for sharing.
Max: Well, I was going to say, on top of that, I think you can show value quite quickly, actually. Because I think, Kyith, you’re coming from a background of like a DIY investor and you’ve researched all these and you can manage it yourself. And you’re looking at it saying, “Well, you’re kind of thinking, If I go and work with Max, what’s he going to give me on top of what I already know?” And I think one thing that I’ve come to appreciate is let’s say, all your savings in the world is $50,000. It’s a lot of money to you. But actually, in terms of what you need to go and do with it is usually fairly straightforward. You just need to start on the path of investing. And that’s where things like the robo-advisers can be quite good to get you going. It’s about putting the financial discipline in place in terms of saving and all that kind of stuff.
Where it starts to get a bit more murky is let’s say you’re in that $1,000,000 to $20,000,000 space where now you’ll get in private banks are beginning to be interested in you. You’re still pretty small for them. You’re not going to get the best relationship manager. And there are some amazing private bankers out there. And if you’ve got a $100,000,000, which I know sounds like a crazy amount of money. But if you’re a business owner, your family business, you have got a team of people you can access. And the $1,000,000 to $20,000,000, you feel like you’ve got enough money that surely I need something more sophisticated than the normal person with $50,000. So you get all these different people coming at you and where you can really add value is trying to cut through that because you are really not sure who to trust. And the numbers are big. You know, if you’ve got $50,000. And again, I know it’s if you’ve got $50,000 and that’s all your money and you think that’s a lot of money. But the error doesn’t feel as big. You know, if you put a $1,000 into DBS shares, then you feel like you’re doing something. But if you’ve got $5,000,000 in cash and you put a $1,000 into DBS, it’s not going to touch the sides.
And so I think people start to get this burden of what do they do with it and they get paralysis. So in my experience, we’re able to add value pretty quickly because when someone trusts you and I think the harder thing is how do you know who to trust? But we know we’ve got a very robust plan and process and instruments. And once people trust you, you actually after the first or second meeting, people tell you that you’re giving them a lot of value because you’re telling them things that other advisers won’t tell them. You know, you tell them about what is the compensation structure really is going on here. Sometimes you’re honestly saying to them what you’ve invested in. Isn’t that good? And that’s not because I’m trying to sell them Max Keeling process. It’s like we can analyse what you’re invested in and tell you and be quite honest. So it can actually, the trust process, you can add value very quickly if we’re a good fit for each other.
Chris: Thanks Max and Kyith. Now, time is really catching up with us. And you know, you won’t believe it, we’ve been speaking for one hour. But I really don’t want to leave this without Max sharing your own experience. I know you have it on your blog, but very quickly, Max, tell us, why do you live life like the way you are living now? You know, you go for more holidays in a year than maybe I go in my lifetime. And your way of living life is also apparent in the way you advise your clients. So at Providend, we believe when we plan for our clients. So maybe very quickly, tell us your thoughts on this.
Max: So I think it was Tim Ferriss that coined the phrase lifestyle design. So the idea is actually sit back and think about what’s the kind of lifestyle you want and how much you think it’s going to cost. And then think about ways you can bring that into your current (lifestyle). So I have always wanted to own a Ferrari. All my life. Since I was a little kid. So you might go, “Ok, I want to own a Ferrari. How much is a Ferrari in Singapore?” Let’s say it’s $300,000. “I’ve got to save up for 20 years”.
Chris: I’m sure it’s more than $300,000.
Max: Ok, let’s say $500,000. And when I’m 65, I can buy that Ferrari and I can drive it around at 10km/h on the roads. Lifestyle design would say, why don’t you just go to a racetrack and hire a Ferrari for like $500 and do 10 laps. And you haven’t got all of the cost of ownership and all that kind of stuff. So that’s the idea. Think about what are some of the things you’d love to do and then think, well, actually, how can I do that today?
So I think what Chris is alluding to is where we, me and my wife, want to get to is not necessarily living in one location and have multiple locations. And so rather than saying, “I want to have a holiday home when I’m 65. At 70, I’m going to retire. And I’m going to spend some time in Spain”. We’ve actually said we really like a certain part of Spain, which is Abitha. So we’ve got a small place there. We want to be able to, rather than going on a holiday, we say, well, why don’t we go and base ourselves in Spain for a month or two months. And we can still work from there. And we’ve kind of proven that remote working works. A lot of people are going through remote working now and it’s kind of proven that you can actually use electronic tools.
So the idea is, can you have two or three places where you spend time in and not necessarily just have a one or two week vacation? And that’s what I bring into the planning as well as to say to people, maybe it’s not your Abitha. Maybe Bintan is your thing you know, or whatever. But it’s actually getting people to think more creatively about like ignore how much you earn and what the possibilities are. What would you love to do? And I’m not saying I can guarantee I’m going to get you that. I can’t magic money out of thin air. But we can cost it up and then we can say, “No, actually you can’t quite achieve that. But you could achieve 2 or 3 of those and we can show different options. And then if your dream is to say, own a yacht. Well, actually, why don’t you go and join a yacht club? And we’ll put that cost into your financial plan and actually use somebody else’s boat. Doesn’t have to be, you know, you don’t need to own the boat.
And I think everyone got some things that they want to do. It’s not necessarily about having the money. It’s about can you do the lifestyle design? And then the financial bit, it actually is last. I know we’ve talked about investments a lot. The investment is the easiest bit out of all of it.
The harder bit is what you want the money for and why? And keep asking, “Why do you want a Ferrari? Why is that important to you?” So I’ve kind of gone through that journey myself. And that’s definitely influenced what I read, what I look at and also how I challenge clients.
Chris: Thanks Max. I think Max also shared his personal story on his blog. And if you want to hear more, you can go to Max’s blog, maxkeeling.com. And I think Max shared that what really triggered him to also want to live this kind of lifestyle is because the father worked so hard and just when he was about to retire and enjoy his lifestyle, very unfortunately, he passed away prematurely.
Yeah, that’s precisely what we believe here at Providend as well. I mean, we don’t have a contract with God, I mean, whichever God you believe in. Because recently I did an interview with Money Mind and the old model is this thing called the three-stage model, whereby you study very hard, you work very hard and then you hope that you can retire. But unfortunately, sometimes that retirement part doesn’t happen for you because you expire too early. Instead, what we believe in is what Max has just described. It’s like a multi-stage, right? I mean, at every stage of your life, you get to enjoy what you’re doing. You can take mini-sabbatical. You can take holiday and still work. I mean, you don’t have to reserve everything that you want to do right to the end. Because that end might never happen for you.
So now I wish we got time to talk more but again.
Max: We should do a whole session on that as well. Because I think that’s kind of where financial advice is going. It’s not about what products have you got to sell me and then that’s it. And you say, “Oh, do you do buy-to-let properties?” And you go, “Well, no, I’m a bank. I don’t do it”. It’s got to be, “What is it you want to do?” And like you said, some people might have an amazing career for 15 years and now they want to take a break, but they don’t want to quit work. They might want to do part-time work. And then they want to start a business on the side. And then they want to go back to full-time employment. And some people want to work till they’re 80, doing different things. Some people want 3 or 4 jobs. And it’s not that traditional three-stage like you said. And I know we haven’t got time to go through it now but that’s what I passionately believe in, is the advisers are there to help you navigate through what your options are. The investment bit like, in a way, we don’t care whether we have all of your assets to manage or not. It’s about what’s right for you and what stage you’re at. And how can you be a bit more creative about how do you want to live life? It can’t be about I’ve got a product to sell and I only represent one financial firm and that’s it.
Kyith: This kind of lifestyle is a bit unconventional compared to the traditional model and all. So I think a lot of people will be wondering like how does the wealth actually supports this kind of lifestyle? So that would be probably a topic for next time.
Chris: I’ve got to stop you guys because otherwise, you know, people will fall asleep watching such a long video. Once again, a big thank you to Max, our Head of Expat Advisory at Providend and also runs a blog called maxkeeling.com as well as Kyith, our Senior Solutions Specialist. He also runs a blog, investmentmoats.com.
So if you have been watching for the last one hour, thank you so much for staying with us.
Max: We’re still here.
Chris: I just want to end by saying that at Providend, you know, we specialise in serving the affluent and the high net worth individuals to help you bridge your life goals with finance. And if you feel that we are the right partner for you to make that happen, we will be most happy to speak with you.
So once again, thank you very much for watching. And thank you, guys.
Max: Thank you.
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