The buzzword these days is “disruption”. No, I’m not talking about the way SMRT has been ruining your peak hour commutes. I’m talking about how new companies are using technology to bring change to industries that have always done things a certain way, like how Grab and Uber are disrupting the taxi industry and food delivery services like Deliveroo are enhancing the F&B industry.
But what if your “disruption” doesn’t change anything in the industry?
That’s a question DBS may be able to answer. Last week, they launched NAV Hub, a financial planning centre with free advisory services. By doing so, they became the first bank in Singapore to do so.
Conveniently located at Tras Street in Tanjong Pagar, it allows the public to register for an appointment with one of the NAV crew. This appointment is a personalised financial planning session, and uses a pretty fun and innovative tool called the Money Mindset Game. At the risk of oversimplifying what it does, this app gives you a snapshot of your current and future financial personality.
Then, by getting you to answer several questions about your income, your expenses, your assets and your liabilities, a financial health report will be generated for you.
Ultimately, the session will allow you to gain more visibility about your money situation, set clearer goals and milestones, and empowers you to take the first steps to achieving them.
All for free!
But wait, isn’t all this what financial planners have already been doing for years?
When you look past the well-designed tools and apps, the truth is that any worthwhile financial planner should be able to take these same steps with you. And yes, their consultation is free too.
Or is it?
For better or worse, the current financial planning industry is largely commission driven, even with the newly introduced Balanced Scorecard framework. This means that in the very worst-case scenario, your financial planner sees you as yet another sucker, someone whom they just want to sell a product that will earn them the highest commission, even if it’s not the best product for you. Their commission comes first, not your future.
That’s an extreme scenario of course. After all, if a financial planner isn’t prepared to sit down with you and prioritise helping you achieve your financial freedom, then they’re not worth your time.
But here’s the thing – even if your financial planner is completely altruistic and has your best interests at heart, they are ultimately still salespeople first – no sale, no salary.
And they know you know that!
Which is why every time they spend hours with you, maybe even buying you coffee… you can’t help but feel guilty if you don’t buy anything from them since you know they’ll earn less for spending time with you.
So, what makes NAV Hub different from your regular financial planner?
Four words: No sales, no obligation.
NAV Hub takes that feeling of guilt away by assuring you that their services are provided completely free, and that you will not be obliged to buy any product after the appointment. Essentially, the NAV crew are service providers, not salespeople.
Which means that you can walk out of NAV Hub, about an hour after walking in, without having spent a single cent, armed with new financial knowledge and better prepared to make important financial decisions.
But wait, let’s be cynical here: Surely DBS isn’t so altruistic, right?
DBS has made the decision not to have any of their branding visible at NAV Hub. They’ve also made it clear that the NAV crew will only be assessed on their service standards, and not on their ability to convert people who register for an appointment into DBS customers.
And that’s going to go a long way to ensuring that your appointment is obligation-free. But don’t take our word for it, of course. This is knowledge you should go in with and certainly hold them to that standard. That being said, you also shouldn’t feel afraid in the event that you are actually interested in financial products to ask more about them.
Oh wow! Does this mean the end of the financial planning industry as we know it?
Not in the near future. Because at the end of the day, NAV Hub will only serve the proactive. If you’re not actively working towards your financial future already, chances are you won’t even think to register an appointment at NAV Hub.
And that’s why financial planners will still be the core of the industry. Because they’re essentially commission-driven, they will be the proactive ones, reaching out to people who aren’t aware of financial products and don’t know the first thing about financial planning.
But should NAV Hub succeed, it will be a sign of things to come.
What DBS and NAV Hub are doing is giving a new generation more tools to make better financial decisions. Once you complete an appointment with them, you should be more aware of what your financial needs are. This means that you’ll be better equipped with the knowledge to find insurance and investment products that are best for you.
And that kind of education and awareness can only be a good thing for the industry as a whole.
What do you think of the NAV Hub initiative? Share your thoughts with us.