The role of Financial Consultants with Grace Escobar – Transcript

Gwen Lazarito
Hey guys, welcome to another episode of the financial planners Southeast Asia podcast Gwen here and today I am with a special guest because she is a registered financial consultant and the vice president at the International Association of registered financial consultants or Ay ay ay RFC, Philippine chapter. Please help me welcome Grace de Vera Escobar, thank you so much for coming to the show. Grace.

Grace Escobar
Hi, Gwen. It’s a pleasure to be here.

Gwen Lazarito
Right? And yes, and of course, the pleasure is all mine. I’ve mentioned this earlier, that it’s, I’m, I’m happy to squeeze out as much information as we can from you in this podcast. And hopefully, we can share it to as many financial advisors not only in the Philippines, but in Southeast Asia as well and the rest of our listeners from from around the world. So before we dive into the main topic, I’d like to ask, and for the benefit of our listeners as well, how did you get into financial advice,

Grace Escobar
it was actually an invitation made by the company where I was affiliated with way back in 2005. It was also the RFC conversion course was also endorsed by my manager at that time. And in 2005, I was already in my three years stint as an insurance agent. And I was told that that was the way to the future of my career. Promise. Yeah, definitely. That is exactly the requirements are taking the RFC course, are our registered financial consultant conversion course is that you must have at least three years experience in a financial industry.

Gwen Lazarito
Mm hmm. Right. So and after taking that, like, What was the atmosphere of the financial advice, industry back then?

Grace Escobar
The atmosphere? Well, in 2005, that was the year that the investment in products were launched in the Philippines, especially by my company, then. And at first, all of us are just selling insurance products. Yeah. And yeah, and it is just a perfect timing that when I took the course, we were taught about a different facets of financial planning. So before that, my father was the one who was first, he will first engage in the insurance industry. And we thought we knew insurance as just part of risk management, or insurance. But then, in 2005, it became a different ballgame. So I was particularly interested in the investment, particularly in valuating, the net asset valuation per unit or the Navajo, and it for me, it would really help me do better in my finance, personally. Yeah. So I had to first apply it personally. And, of course, to my clients, but then it really need a great challenge and excitement for me to enter the financial consulting world that made a difference.

Gwen Lazarito
Yes. And, oh, I do agree with you that grace, in a sense that I also jumped into financial advice in the industry, because I wanted to learn more. And I thought, what better way to learn than to teach. So as I was advocating for financial literacy, I myself was learning and whatever I learned, whatever I soaked up, I would tell it to other people as well or advocate for it. So it’s, I think it’s a great way and now, a few years later, you’re still in the industry, and you’re still thriving. And you mentioned before we started recording that you’re still learning as well. So I think that’s what financial advice is all about is just learning new ways and how to become better As in this industry. So I guess my next question is, I mentioned that you are the vice president of the AI, a RFC,

Grace Escobar
the Executive Vice President and

Gwen Lazarito
Executive Vice President. Wonderful, right. Thanks. And so you’re, you’re also a registered financial consultant. And I guess I wanted to ask like, here in the Philippines, there are financial advisors, and there are also financial consultants. So because you guys are part of your are a registered financial consultant, what’s the difference between a financial advisor and a financial consultant?

Grace Escobar
Thank you for that. I guess a financial advisor represents an insurance company or bank, a brokerage and aims to give solutions with the company financial products. But the financial consultant represents his or her practice or service and appropriates the products suited to the needs of their clients like real estate properties, HMOs, you know, things that are not in the basket of services or financial products of the company affiliation,

Gwen Lazarito
right, so it’s more on the broader spectrum, part,

Grace Escobar
Ways and Means and how to be able to address in how to help the clients attain their financial goals.

Gwen Lazarito
Yeah, and that’s a really great way to help people in particular Filipinos to make better financial decisions.

Grace Escobar
Exactly. And along the way, you got to do research, you’ve got to understand that whatever is that you are trying to, to give the clients as part of the solution you should know yourself. And know you wouldn’t endorse something that you yourself will not embark on, right. And so we need to have a deeper understanding of what these financial solutions are.

Gwen Lazarito
Oh, that’s true. That’s so true. Because you can’t sell something you don’t know right? In, in. And you wouldn’t want to advocate for something that you’re not very familiar with, as well. Just so you have, if you have your clients best interest

Grace Escobar
now. And of course, the passion comes from where you also learned in the past, like I myself made some wrong financial decisions before it had I know that way back then, you know, my life could even be better. But, you know, because of that experience, it has made me more passionate with what I do.

Gwen Lazarito
Other so true. I remember. I had a lot of mishaps as well with my money. And I thought that I was already good at it. But it turns out that I have yet to learn so much. And that’s I learned those when I started going down the rabbit hole of financial advice. And that’s why I understand that a lot of people are very passionate about financial literacy, financial education, and also can, being a consultant for other people, especially Filipinos, because I feel like there’s still a gap. And we can see it in our in every Filipino right, like you can still see that there’s a gap between what they already know and what they should learn.

Grace Escobar
Yes, because most Filipinos are emotional, they you know, if the children asked for something like I have, I have here a neighbor who when his his youngest son said, you know that I liked that house and that dad said that he just bought the house just because his son wanted it. Even children could be financial advisors to parents.

Gwen Lazarito
Yes, that’s so true. That’s so true. I and I know this because I know that a lot of financial advisors actually started becoming advisors because their parents because of what they saw in their parents like back in the days their parents did not believe in insurance. They did not believe in HMO and was scared of investing their money on the right things like stocks, instead they invested in Ponzi scams and Malay and they would not want that to repeat in there. A generation. So it’s very interesting that there is a development and Filipinos way of thinking in terms of money. So what’s your observation of the development of your profession as a financial consultant? Through the years that you’ve been in the industry,

Grace Escobar
to be honest, Gwen, a lot of financial advisors would want to elevate their practice in servicing their clients. And yes, unfortunately, the majority of them go go back to product pushy, after attending the RFC course, that is because of the 100 years old culture in the industry, that they are encouraged to perform a certain degree of productivity. But the good news is, there are insurance companies who partner with IRF, Philippines in order to give their financial advisors the paradigm shifts, and skills they need to unravel, in the financial goals of their clients through a proven scientific approach that will eventually successfully help their clients obtain their, their their goals. And I’m so you know, proud of this insurance companies who put who really look for an association or a company, which is dedicated to really do financial consulting and open these doors to their financial advisors. You know, I really wish I could name drop their companies, I won’t. Yeah, so I believe that, especially with this pandemic, the different companies or insurance companies, and even banks are really pushing their, their bank managers or wealth managers, and insurance advisors to get a higher education and a higher understanding of financial planning. So I believe we’re on the right track. Yeah.

Gwen Lazarito
That’s good to hear. So kudos to all of those companies who go above and beyond to serve their clients in a way that can not only benefit them as a company, but the individuals that they’re serving as well. So what are the different approaches that various financial consultants take when helping their clients?

Grace Escobar
Well, it all depends on their expertise. The financial consultants approach their clients based on the the services that that they can offer like and in the financial solutions available to them, like some specialize in helping clients manage risk or pure risk, and those come from the insurance industry, some market their services as a tax and stocks and in tax rather and estate planning. And people like a Franciscan usadas, you know, they are into investment planning others into education, retirement and funding for special projects. So it all depends approach differs in whatever service and financial solution you can actually give to your clients.

Gwen Lazarito
Wow, that’s so cool. And so the financial consultants also have agency on what they can specialize in and based on what they’re passionate about, because I know Francis, we already had a podcast recording, it would be out soon. So to all the listeners, I hope you’ll stay tuned for that. But yes, he’s his into investing. He’s very passionate about it. And that’s why he’s, he likes talking about it, and as an extension, would like to provide his services regarding that area.

Grace Escobar
Yes. And in fact, Francis will be graduating this August and he is actually on top of his class. Actually a portfolio manager. Yeah, yeah.

Gwen Lazarito
Wow. That’s so cool. So good on Francis and goes to show the type of people that are financial consultants now, right and that are registered or affiliated in IAR FC. So what would like I guess my next question is, how do you see the this profession financial consultants, how would they Full throughout the 2020s, especially after the pandemic,

Grace Escobar
actually we’re not through with the pandemic. With our pandemic journey for more than two years, I am pretty sure our experiences have made us wiser. This pandemic has brought emphasis on risk management, including a safety net in people’s hopes and dreams are the reason why they work. And a lot of breadwinners and frontliners succumbed to death. And with their untimely demise, families and children’s future were dropper diced. And so with this life uncertainty, the breadwinner should have quote unquote, sufficient coverage. No more importantly, on risk management is the importance of having a health maintenance organization or HMOs, since we live in the Philippines, and our our health coverage is, is not taken care of by the government yet, but only by Philhealth. So we this pandemic, or COVID-19, has proven the high cost of hospitalization. So that should be part of the portfolio of each and every Filipino. Also, there ought to be an emphasis on investment planning, this pandemic has taken away nine years of investment return. So it is not just about the return rates, but how much risks our clients can take. Are they into safe investing over capital growth investment? You know, so we need to know where they’re coming from, but because what if the our clients are now about to retire? What happens to the retirement fund that they are expecting to receive? No. And there also ought to be an emphasis on emergency buffer fund. Yes, no emergency buffer fund should take over. When there’s a cessation of one’s income, as what this pandemic has done to most small and medium enterprises. Previous to pandemic, the ABF, or emergency buffer fund is about three to six months expenses. But my no definition of EBF is that it should now be six to 12 months. Yeah, yeah. Because it took most people six months to adapt to the new normal to create a new avenue for income generating activities, and to jumpstart their career, but And how about this as Amis the small businesses, and some of these businesses have closed, you know, you go to the malls and you see them closed. And that is so sad. So by the way, Gwen, you know, I just to make an want to make an emphasis that emergency buffer fund or EBF is should not be equated as Risk Management Risk Management are all about insurances. Yeah. But EBF is part of the liquidity of a person we’re in should the income stops, right, this pandemic, a lot of people lost their jobs. That’s true. Yeah. So, you know, sorry, I just got too excited. But it is what pandemic has brought to each and every one of us. We need to know where to put emphasis on specially in the way we handle our money. Don’t have that much that much fun. When you get these people who have pension, you know, they are way better off than those who did not have any emergency buffer fund, at least during pandemic, they continue to receive their pension.

Gwen Lazarito
Yes, that’s true. Oh, I would really 100% agree with that grace, because I experienced it. So we hit the pandemic. Good thing is that by that time, I was already in the financial advice industry. So I’ve already set myself up for success as they say. But so the the trials and tribulations did not end there. As last December we were also part of the area where we were hit by the typhoon or debt and then set us back like in a very unexpected turn. But the good thing is we had that buffer for six to 12 months, we like very slowly reached that amount. And because we had that money set aside, it wasn’t too difficult for us to get back on our feet. But I do agree. Yeah, not everyone has that, not because they didn’t want to. But for some, like, as the typical Filipino story goes, they actually don’t know any better. And that’s why I totally agree that it should be an emphasis as a way of educating Filipinos through financial consulting, through advice, and I’m planning that the buffer money should be at least six to 12 months, because you don’t know if there are back to back events in your life that’s going to happen that will set you back.

Grace Escobar
And do you know what else worked during this pandemic? What worked most is the fate of each and every Filipino people. If there’s a trade in God, which actually brought them the resources to be able to go through the day to day expenses, more than our abilities and capabilities of growing money, it is the goodness of God, it is God’s faithfulness, I could not attribute everything to how good I am in, in handling money. But how good our God is, I’m sorry, if I have to put that in.

Gwen Lazarito
And that’s fine. But it goes to show that we Filipinos are very faith centered. Right. And that is true. I think one of the ways that we are resilient as Filipinos and other countries around the world actually say that we’re very resilient people. And I think that’s because we do turn to faith. And that makes us move forward. When all is lost, but in our hearts, we know that all is not lost. We have our faith, and we have our families and we have faith in the people around us in our community. Because we know that it’s it’s something that can help us move forward.

Grace Escobar
Exactly. I’d say amen to that.

Gwen Lazarito
So, and I because you’re not the only person or financial consultant here in the podcast, who really has faith in and just puts everything they do for God. And I think that’s very important that other can that we highlight that I guess because it’s it’s part of our culture and that it’s what makes us different as well. So I guess my next question now is, can you tell us more about we’ve been talking about your organization, right, but let’s, let’s set a spotlight on that. Can you tell us more about ay ay RFC?

Grace Escobar
Yes. Ben Bradley. I RFC means the International Association of registered financial consultant. It is a global nonprofit association of proven financial professionals form to foster public confidence in financial services, professionals and whose members adhere to the IRC code of ethics grant, it is actually founded in 1908. Before the IRS, his mission is to recognize world class financial consultants and empower them to make a transformational difference in the financial lives of the families and the communities they serve. Wow, that’s cool. Yes, actually, I RFC is also committed or is rather committed to the overall process of financial consultants. And once the public understand the value and benefits of engaging a professional, so they really proved highlights also, and they give us this kind of distinction separating us from other financial advisors. Right. So do recognize they do recognize this professionals who are really really helping people, you know, have transformation of difference in their financial lives.

Gwen Lazarito
Wow. I like that transformational difference in that’s really something right to be able to transform a person’s lives. Through finances, because finance affects everything, as you mentioned earlier, especially Filipinos were very emotional when it comes to money.

Grace Escobar
Yes. And, you know, one, one wrong financial decision could actually put you five years back. That’s true of the shoe all depends on the impact of, or the gravity of the decision, wrong decision that we make.

Gwen Lazarito
And I’m just curious grace, like, how does like the RFC? Are the financial consultants provide service to their clients do? Do they become partners for life? Or do they do it in like a yearly basis and just, or just with a program,

Grace Escobar
I believe it’s meant to be for life. When you, when you actually make a roadmap, or a financial role roadmap of a person, you also help them implement these. So financial consultancy is more than selling financial products or services, it is helping people implement the plans that should meet for them, because no matter how good your financial plan is, if it is not implemented, it is good for nothing. So we talk about what 32 years to retirement, and you ought to be there and with whatever financial product that you endorse, the question is, is the return rate, or the long term, the long term rate that you use as a projection of that fund would be able to achieve the goals of that person? So that is why we need to have this financial plan review every now and then say, after a year or two, you know, to make sure that everything is still in order. I believe that financial consulting is partnership for life.

Gwen Lazarito
Yeah, that’s. So ideally the same as a relationship a person has with their physician or their family physician. It’s it’s meant to be for life. Because yes, yeah. Not only do you help cultivate positive behaviors with regards to financial management, you also check in with clients to see if how financially healthy they are. That is,

Grace Escobar
even lawyers with their lawyers, it is also a lifetime commitment to their lawyers.

Gwen Lazarito
Yeah, that’s true with it’s a because it’s something that you continuously go back to each cycle or at least face of a person’s life. Right.

Grace Escobar
And they know Plus, they know you’re all the history.

Gwen Lazarito
That’s I think that’s a an important thing to highlight is to, it’s actually best to keep coming back to the same physician, lawyer consultant, because they actually know your

Grace Escobar
financial doctors. Yeah, yes. Because

Gwen Lazarito
they already know your, your habits, like the journey that you went through and how you tend to slip as well, right? What are the things that trigger you to emotional spend and all that stuff? So that’s very important. Now, like, what’s the advice that you would give to aspiring financial consultants?

Grace Escobar
Yeah. Thank you for that the way you advance your career is up to you. The IFC provides the opportunity to elevate your career and transform its trajectory. You know, a financial consultant writes the financial plan process like goal identification, data, organization needs analysis, review, Problem identification, recommendation and plan implementation. As a financial consultant, or aspiring to be a financial consultant. You help your clients to save the stand to invest, ensure and plan wisely for the future. And if this is your advocacy, if you have the same advocacy as what I mentioned to help people do better in saving, spending, investing, insuring and planning wisely for the future, then we invite you to be one with us. No Have you have to, you know, be in the same room with people who are the people who are like minded because See, we’ll learn from them, you know, with our experiences from one client to another that makes us wiser.

Gwen Lazarito
Yes, that’s true.

Grace Escobar
So I believe that’s why we encourage people to be one of us. So we could have the same language, the same paradigm, the same paradigm, the same attitude, no. The same passion. And it’s all about helping our clients. And as we help others, we also are enlightened. You learn you profit from the experience of others. Hmm,

Gwen Lazarito
yeah. And it goes back to our discussion earlier than what better way to learn than to teach. Right? So thank you so much for for that one. Grace. Now, where can people find you if they want to get to know you more? contact you?

Grace Escobar
Okay, thank you. Um, they can reach out at 09175769207. Let me repeat that leaves 09175769207 and reach me in my email at Grace de vie, escobar@gmail.com. And g dot Escobar, I RFC that org. So either or we’ll do All right,

Gwen Lazarito
wonderful. I’ll make sure to include that in the show notes of this particular podcast episode. So thank you so much for coming to the show. Grace, it was really great speaking with you with regards to the financial consulting landscape of the Philippines and where it’s headed in the years to come. And what are the emphasis that we need to put on in areas in financial advice? So, yeah, I’m very happy that you’re here. And we were able to discuss these things. So yeah, and I hope that we can have more discussions like these. If anyone who’s listening wants to become a financial consultant, just go ahead and reach out to grace. But for now, thank you so much for listening and grace. Thank you so much for being to the show. Have a good one.

Grace Escobar
Thank you. Thank you so much again, God bless everyone.