Inc THE BUSINESS TIMES Tuesday, March 10, 2009 ● 10
TERNAL Financial Advi-
sory has been in busi-
ness for less than fou...
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Published on: Mar 4, 2016

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  • 1. Inc THE BUSINESS TIMES Tuesday, March 10, 2009 ● 10 E TERNAL Financial Advi- sory has been in busi- ness for less than four years, but so much has happened in that time that it seems much long- er to its founders. Fred- dy Sim, its chairman, started the small independent finan- cial advisory firm with its chief execu- tive Viviena Chin – his former protege – in August 2005 with little more than high hopes and stubborn determina- tion to make it a success. Together, he and Ms Chin – both top life-insurance agents from the former Keppel Insurance business – spent months preparing to launch their new venture, including convinc- ing regulators they were up to the task. “It took a lot of work, pain and cap- ital to build the infrastructure, the IT, compliance, accounts and administra- tive departments, finalise our busi- ness plan and clear the red tape be- fore we could launch,” says Mr Sim. When they finally obtained a li- cence from the Monetary Authority of Singapore to start operations, several of their former colleagues who had agreed to join them at the new firm decided to stay put instead. “We were played out by the advis- ers at the 11th hour,” Mr Sim recalls. “It was like a bride not showing up at the wedding banquet and leaving the bridegroom in a lurch, while the gold and everything else had already been prepared.” He blames “money and greed” but isn’t eager to reopen old wounds. “We left our previous firm emp- ty-handed, with a heavy heart and started Eternal Financial from a ze- ro-income base.” Determined to succeed neverthe- less, he and Ms Chin worked day and night to sustain the new firm. After just three months it made a “very good net profit”, he says – a re- markable achievement for a start up – and has remained highly profitable since. He declines to reveal just how much the firm earned but says its profits kept growing, by six-fold the next year and 12-fold the following year. But there were problems along the way. “We built our team from just two people to 24 advisers in two years,” says Mr Sim. “Then we were levelled again because one of our advisers was poached and pulled all our other advisers away, except for one loyal and faithful Wilson Koe who is our company director now.” What happened then? Mr Sim, Ms Chin and Mr Koe set about rebuilding the team from scratch. Today, “we are back on our feet again, with a team of 22”, Mr Sim says. And the company is “still expanding”. One advantage of having suffered so many setbacks is that he does not fear the current downturn. “The finan- cial crisis has not changed the way we do business,” he says. “Our busi- ness is not about good or bad times. I went through the 1987 and 1998 re- cessions, and we were, in fact, doing very well in those periods. “We are very confident that the 2009 recession is going to be a great opportunity for us again. In bad times, clients need more finan- cial-planning advice. These past cou- ple of months, we’ve been very busy helping clients.” His optimism – and determination – stem in part from a hard childhood he still remembers vividly. “Both my parents were illiterate. My mum nev- er had a chance to put on a school uni- form or a pair of school shoes,” he says. We lived in a very small space and both my parents had to moon- light two or three jobs to support us.” His mother was a factory hand who worked from 11 at night to seven the next morning. Mr Sim hardly remembers sleep- ing beside her. “She would come home, nap for a few hours, then head off to another job as a construction worker, come back again to cook por- ridge for me to eat, then go to a hair saloon to sweep the floor and do laun- dry, just for a few extra dollars. “Sometimes she would cry, and when I asked her why, she said that it was embarrassing that people looked down on us. “My dad worked as a security guard at Orchard Towers, taking the last bus home at night, then the first bus out in the morning to work as a gas delivery man, carrying gas cylin- ders. At weekends, sometimes, he worked as a bus conductor.” Watching how his parents worked so hard yet “never seemed to suc- ceed”, Mr Sim realised the impor- tance of mentoring and coaching to improve a person’s livelihood. Stepping into the financial servic- es industry “transformed my life”, he says. “I started in the financial busi- ness in March 1991 with Keppel In- surance (now part of HSBC Insurance Singapore). All my family, relatives and friends went against my decision. They thought I could not make it un- less I came from a well-to-do back- ground.” But he proved to have a knack for the job, as did Ms Chin, who joined Keppel Insurance in 1995. They both quickly became top agents, qualifying for the coveted Million Dollar Round Table honour for high-performing agents year after year. “I was sin- gle-minded and as focused as a nee- dle,” Mr Sim recalls. In December 2002, HSBC’s insur- ance arm bought Keppel Insurance for $150 million from its existing shareholders, Dutch banking group Fortis, Keppel Capital and Kephina- nce investment. “It was status quo for a while, but HSBC wanted to build up its bancas- surance business, so they started shifting people to the bank,” says Mr Sim. At that point, he and Ms Chin de- cided to start their own advisory busi- ness. The effort has paid off hand- somely. Last November the firm won an Enterprise 50 award, gaining rec- ognition as one of the 50 most success- ful privately owned Singapore compa- nies. One reason it has done well is that it keeps its fixed costs low, while re- warding its staff well. “Even in this pe- riod, when the market is down, we don’t cut down on our staff. We’ve in- creased their pay and their bonus,” says Mr Sim. He prefers to save on rental costs instead. As rents soared, the compa- ny moved its office from Shenton Way to Bugis, then to its current premises in Beach Road. “We believe that a good business should be lean,” he says. “Many busi- nesses have a huge turnover – but they still go bankrupt. It’s not about being big. “It’s like when we do financial planning, clients’ finances may look beautiful, but when you really look in- to things, they have huge debts. Com- panies are the same – being lean is im- portant.” Today, the firm’s client base in- cludes “the man in the street, profes- sional entrepreneurs, politicians, magistrates, managing directors of businesses and listed-company chair- men”, Mr Sim says. He and Ms Chin each handle about 200-250 clients, cultivated over many years, and other staff each look after their own clients. What of the future, given the diffi- cult outlook for most businesses? “My motto is, tough times don’t last, tough people do,” says Mr Sim. Stubborn determination and sharp focus spell success for Eternal Financial Advisory, writes CONRAD TAN ARTHUR LEE Mr Sim: ‘We are very confident that the 2009 recession is going to be a great opportunity for us again.’ Tough people for tough times SME VOICES Expanding in difficult times: PAGE 14

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