Go compare ... go compare ...

Okay, the argument has gotten rather heated and over my last article and I would just like to clarify that It's not my intention to discredit or even attack Ryan Ong of Moneysmart.sg in any way - for someone who is coming from outside the financial services industry, he has managed to somehow create a little niche for himself despite having no experience. How he has managed to do so has totally baffled me, but the fact is, he is one of those people who has tried to do something rather than one of those people who simply sits back and with a 守株待兔 attitude when it comes to career advancement. I have respect for him by that token, even if seriously doubt his credentials when it comes to financial journalism.

Can just about anyone write about finance? 

You may tell me, "hey Limpeh, journalists write about anything from crime to health to finance. They are not necessarily experts in those fields - they just have to write about it." My sister used to be a journalist who wrote about health issues in Singapore and she wasn't a medical professional (her degree was in English, not medicine). However, her articles were based on her interviews with medical professionals and others in the industry. Maybe Ryan Ong has interviewed some people for his articles, but I have yet to find any on his website yet. I'm sure he reads widely and does a lot of research - but I just get the feeling he doesn't leave his bedroom often enough and interact with real people who do work in finance (otherwise there may be more evidence of this kind of human interaction on his blog). My sister's articles were insightful, interesting and informative because she was using the wisdom of the experts she interviewed to put those stories together - if Ryan Ong wanted more credibility as a financial journalist (rather than a self-styled financial guru), then he should get out more and do some serious networking.

A true financial guru would be someone who has worked in the industry and has faced all kinds of challenges over the years. It is the lessons he has learnt in overcoming these difficult challenges that would give him the kind of insight would set him apart from those who have never had to solve such problems. Ryan Ong has never worked in the industry - yet he is not seeking the opinion and help of those who have decades of experience in this industry? Hello? What is going on here? Does Ryan Ong think that he knows more than them?

These are banks. Ryan Ong has never worked for one. 

Heck, anyone can try to write about anything in blogosphere. I write a lot about autism despite not being a medical professional - I merely share personal experiences as I have a family member affected by the condition. It's in the spirit of peer support - to tell others who also have autistic family members the simple message, "hey, you're not alone, I empathize, I understand." There is a lot to be said about this kind of peer support - it can bring a lot of encouragement to those facing a daunting challenge but may not have the benefit of having friends & family who understand what they are going through. I would not try to dispense any kind of medical advice on the issue of autism though as I am clearly not a medical professional.

Likewise, when it comes to money (or the lack of it),  I suppose there can be some element of peer support for those in that kind of situation - but really, what such people need is pragmatic solutions, rather than the kind of "there, there I understand what it is like, let me give you a hug" brand of empathy. There are strict rules governing who is allowed to charge for giving out financial advice: it is called a "Financial Advisory Licence" which is granted by the Monetary Authority of Singapore. There are a whole range of licenses that the MAS grants to financial advisers in Singapore - each license would clearly define what kind of advisory activity the individual or company is allowed to carry out professionally.

Where does that leave websites though? I took the time this afternoon to have a good surf through http://www.moneysmart.sg - I wasn't charged for the content and it seems everything is written by Ryan Ong himself. It's not like he has a team of professionals working for him - no, it's pretty much like a blog at the end of the day and he is not shy to put his face all over his blog.  Anyway, some of the articles are okay whilst others are boring. He is competing in a very crowded market of financial press and I'd much rather read an article written by an expert, rather than a self-styled financial guru with no industry experience whatsoever.

Where shoyou get information about finance? 

His source of  revenue seems to be derived from the associated websites: Smartloans, Smartcredit and Smartinsurance. I had a look at all of them and they seem rather well put together and all you do is put in all the information about what you're looking for and the website then matches you up with the best deal available out there. This is more commonly known as a 'price comparison website'. With your consent, the website then passes (or "sells") your lead onto the service provider who is the best match for what you're looking for and then you will get a call from a company representative. Do they do this for free? No, the service provider pays the website for the qualified lead. They are rather up front about this process - which is obviously where their revenue source comes from. He may have an arrangement where he gets a further commission if the lead materializes into a deal - but that is between him and the service provider. As far as the end user is concerned, he is getting a free service. Or is he? Certainly, the end-user not paying for the service he gets from Moneysmart.sg - but at the end of the day, somebody has got to make money from this process.

What Ryan Ong is doing isn't that radical - price comparison websites are very common in the West. In the UK, we have websites like Moneysupermarket, Comparethemarket, Confused and Gocompare - all with very catchy advertising trying to get our attention. He is merely using a tried & tested formula and implementing it in Singapore - and guess what? It works.

There are two insurance companies in the UK who are very proud of the fact that they are not on any price comparison websites, Directline and Aviva. Their reasoning is simple - rather than have to pay these price comparison websites for the 'qualified lead' and then paying them a further commission for the referrals, they simply say they will not spend money like that and pass the savings onto their customers. This has made them very popular with the public and it is a business model that has thrown a spanner in the works for these price comparison websites. Whilst I don't have any figures for Singapore, in the UK, the average commission paid to such middlemen like price comparison websites is about 24%.  Whilst the end-user may be oblivious to this since he's not paying for it, a company which gladly pays 24% commission for a referral is spending a lot more money on marketing and middlemen than on the customers.

Here's the bit that sucks - even if you went direct to the service provider rather than via a price comparison website, you are still paying for them to spend all that money paying for referrals. Ouch. That's why Directline and Aviva are so proud not to be on any price comparison websites in the UK. Of course, if these price comparison websites didn't provide a good service, they would've gone bust a lot time ago. The fact that they do provide a good service means that they can make money and the beauty of it is that the end-user is under the illusion that he is getting a free service when in fact he is paying for it indirectly when you factor in the fact that the fee the service company has paid for the referral has been built into the price already.

It's like going to a restaurant for a meal and then given the chance to use the toilets for free. Hello, you've paid for it already. The price you've paid for the meals does include the restaurants' hard costs in terms of renting the premises, the cleaning, the electricity, the furniture, the staff and of course, all the costs associated with maintaining a decent toilet for the customers to use. So the visit to the toilet would really only be a free gift if you weren't a customer - but if you are a paying customer, then guess what? You're paying for the toilet whether you actually use it or not. It's not like you'll be given a 5% discount if you have not used the toilet in the entire duration of your visit to the restaurant.

Yup, the use of the toilet is included in the price of the salad.

Do we really need such websites? I don't think so. Come with me to the mall. Imagine we wanted to buy a new pair of shoes for work and there are so many choices even within one shop, never mind all the shops in the mall. There are different brands, different sizes, different offers - woah. Do we start going into blind panic and look for a website to guide us through shoe shopping? Or do we simply gather all the information at hand, start making mental notes and making sense of the situation? One can speak to the salesperson in the shoe shop to find out why one pair is more expensive than the other and we will soon get a pretty good idea as to what we are prepared to pay for what we want.

These price comparison websites are a fairly recent phenomena - what do you think people did before price comparison websites came along? We did our own comparisons the organic way, spending time doing research, noting down prices, speaking to friends, seeking expert advice and building up a comprehensive understanding of the options available out there. We were quite capable of doing all that - then you have websites like Confused.com who try to convince you that there are so many options available that you will be confused and unable to make sense of it, that's why you need to go to their website and rely on them to figure all this out.

Another two British websites merely use catchy advertising to try to get your attention - both of which have produced a series of very successful ads. Even school children who would never go onto a price comparison website can sing the "Go Compare" ad song, featuring Welsh tenor Wynne Evans. I swear it is so irritating that it will stick in your brain and it has made Wynne Evans from a fairly unknown Welsh singer to a fairly big star in the UK, all thanks to this series of ads. Most of these ads are on Youtube - the first one was so memorable that they just kept on making more and more, featuring Wynne Evans in different locations and settings - from the fairytale land (insurance for Cinderella's pumpkin) to a pyramid in Egypt to a beach on a tropical island. It would've been the most successful advertising campaign for a price comparison website had it not been an even better one.

Meerkats. Oh comparethemarket.com invented this impossibly cute talking Russian meerkat called Aleksandr Orlov and by December, every kid in town wanted a Meerkat toy for Christmas. This fictional character even had his own autobiography "A Simples Life: The Life and Times of Aleksandr Orlov" which became a best seller. The commercial potential of Aleksandr Orlov took on a life of its own but of course, our friendly Russian meerkat was always directing you to the Comparethemarket.com website along with the sister website, Comparethemeerkat.com. No I don't have an Aleksandr Orlov meerkat toy yet, but I'd like to have one! Aaah he's so cute!

 I guess Ryan Ong couldn't afford to organize a brilliant marketing campaign with either opera singers (can you imagine someone like Wynne Evans belting out some Smartloans jingle?) or cute talking pandas/orang utans/tapirs - all these campaigns cost a lot of money and I guess as a one man band, Ryan Ong just doesn't have the capital to do something like that. So what does he do instead? He puts his face all over his Moneysmart website. Erm, mate, not a good idea. You're no oil painting and most of all, your image is hardly going to sell your product. How can I put this subtly... You're not thin. You're rather big. Do the words double chin mean anything to you? It's not a pretty sight.

Mind you, I had a tough time trying to find out who the MD at Comparethemarket was - when you try to do a search on google, the most common search results would point you to Aleksandr Orlov, who is "the CEO of comparethemeerkat.com". Finally, I found a press release here and their two directors are Kal Atwal and Martin Overton. Both of them are exactly what you'll expect: well groomed executives who know how to appeal to their shareholders - but the fact is, they keep a fairly low profile (unlike say Richard Branson, Sir Alan Sugar or Donald Trump who love having a high profile). Instead, Atwal and Overton are quite happy to let a cuddly Russian meerkat take the limelight and be the character associated with their company.

I'm no oil painting myself, I am 36 and very plain looking. If I were to start a company, I'd probably do exactly what Atwal and Overton have done - I'll park my ego at the door and use an impossibly cute talking panda to be the image of the company. (Everybody loves pandas.) Or a cuddly polar bear. But not my face, no because I'm not some impossibly beautiful K-pop star. I'm just a very average, plain looking 36 year old guy skidding towards middle age - but at least I don't have a double chin.

The fact is, Ryan Ong doesn't need to market himself as some kind of self-styled financial guru in order for his price comparison websites to be successful. All he needs is a really well constructed website so the user experience is always good and guess what? He's not probably not he one building his own websites - no, it would be outsourced to a specialist who does that for a living. That person would probably have looked at all the best price comparison websites in the world and made sure that the Singapore version would have all the useful features that these other good price comparison websites all have. Once you have a good website, all you have to do is to pay someone to make sure it is updated regularly and makes sure it runs like clockwork. That's all. You're not doing any real advisory work - the price comparisons are generated automatically by a programme which will deliver based on the information given by the user. Like I said, it's not rocket science. Take a formula that works well in another form of the world and adapt it to your local market - he's spotted a gap in the market and has exploited it before anyone else, good for him.

However, his money blog at Moneysmart.sg ... what is the point? Is it supposed to show off just how brilliant he is with finance? (Yeah right.) Is it suppose to be the marketing arm of his price comparison website - like are his readers more inclined to use his price comparison sites after having read his articles? Perhaps Ryan Ong is a closet IFA and would dearly love to be the one dishing out financial advice rather than merely sitting behind a computer programme that simply generates a price comparison based on the data input. He therefore pontificates about finance on his blog despite never actually having worked in finance before - which is just weird to say the least. Like dude, if you really wanna work in finance, then just get a job in a bank lah. Duh.

Does Ryan Ong really, really wanna work in finance?

Like how do you become a guru in finance without actually having worked in the industry? Like, can I become a guru in mountain climbing without having actually climbed a mountain? Can I become a guru in opera singing without having actually performed in an opera? Can I become a guru in racing cars when I don't even have a driver's license (never mind having actually driven a car)? Can I become a guru in wine making when I have never ever made any wine? You get the idea.

It just baffles me that someone who obviously has enough business acumen to spot a gap in the market would be so vain and short sighted when it comes to his own Achilles heel in the process. And I'm not even talking about his double chin at all. I guess this is what they call a blind spot. You've created a successful business despite having zero experience in finance, great. Now just hide behind a cute animal like a meerkat and don't ever show your double chin in public. (I was going to post a picture of his double chin but I thought, nah, even I wouldn't stoop that low.)

I see that his articles on his blog tend to have zero comments whilst my last article criticizing his article has so far received 20 comments in less than 2 days (including two from Ryan Ong). Go on readers, you know the usual drill - feel free to leave a comment and yes that includes you Ryan. Don't be shy. Oh and I'm off to Manchester tomorrow but will still be on my Blackberry, so please don't panic if I don't approve your comments immediately. I've got a packed schedule for this trip up north.