In A Nutshell: Where there is a will

This article first appeared in Unlisted, The Edge Malaysia Weekly, on August 10, 2015 - August 30, 2015.
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Some 20 years ago when Saw Leong Aun and Johari Low Abdullah decided to start a company that offered will-writing services, many people thought they were crazy. After all, if you wanted to write a will, you would go to a lawyer. Also for most people, especially the Chinese, wills are related to death and therefore a taboo subject. 

It took faith and resilience to not only start Rockwills but to keep going despite four loss-making years. Their problems were plentiful. They included not having enough agents to reach out to people and get them to write their wills, as well as dealing with people who were unclear on the concept and those who thought downloading a template off the internet was all that was required. 

The partners were not new to the financial services industry. Saw was in the insurance business before he co-founded BHLB Pacific Trust Management (now known as CIMB Wealth Advisors) with Johari and Datuk Seri Goh Eng Toon, the grandson of the founder of Ban Hin Lee Bank. BHLB was hugely successful and became one of the largest private unit trust companies in Malaysia.

Johari was an internal auditor, and was instrumental in turning AmBank Group into one of the largest investment banking houses in the country before joining Saw in setting up BHLB.

Despite the success of BHLB, Saw was not satisfied. He looked at the wealth cycle — protection, accumulation, wealth creation and investment. What was missing?

“When the investor or life insurance policyholder dies, what happens to his money, investments and assets? That was the missing link in the chain. And that was why we formed Rockwills,” says Saw.

 

Slow beginning

The business started from a zero base. At the time, there was no awareness of will-writing services or the need to have one’s will done professionally. People were also unaware of the nuances when it came to writing a will and how to make it watertight. They were even less aware of trusts or living wills.

The first stumbling block was that the topic of wills was taboo among the Chinese. People felt that talking about your will meant that you were talking about your death. And that was not an issue they wanted to face.

Also, if the children were the ones who brought up the subject, their parents would assume they were merely interested in their inheritance, even before their passing. All in all, it was an unsavoury topic for polite society.

This was not something that would change overnight. The partners had to be extremely patient. It took them three to four years just to get their message out and their value proposition across to prospective clients. It was only in the company’s fifth year that it started to show some profit.

According to Saw, the shareholders had to fork out a whopping RM5 million in the first few years to invest in human resources, promotion and advertising, and even a computer system. There were cash calls at every other board meeting. “The good thing was that we had the support of the shareholders and directors, so we managed to pull through,” he says.

In the early years, the company only wrote 100 to 200 wills a month. The income generated was not enough to cover its costs, hence the repeated cash calls. Today it writes around 1,000 wills a month. But to get to this point, the company had to educate the market, not just its prospective clients but also agents and financial planners. 

To grow as quickly as possible, Rockwills decided to adopt the franchise model. Those interested in becoming a franchisee would have to sign up and pay RM2,788 for four days of training. Once they qualified as a franchisee, they would be given legal and marketing support. They would also be given professional indemnity insurance coverage worth RM1 million.

Rockwills held seminars to create awareness among the public and educate the market on wills and its will-writing services. The seminars, which were conducted in English and Chinese, attracted a lot of attention. 

“Gradually, people began to understand and accept what we had to offer. At the same time, the intermediaries, such as agents and planners, began to see how estate planning was a necessary part of the financial planning landscape,” says Saw.

Rockwills continues to give these seminars as they are an effective form of marketing. Saw himself has given thousands of talks in the last 20 years.

Taboos were not the only thing the company had to overcome. Another obstacle was inertia — people do not get around to writing their wills unless there is a sense of urgency to do so. 

Ironically, the natural and man-made disasters of recent years have contributed to Rockwills’ business. Everything, from the severe acute respiratory syndrome (SARS) epidemic to landslides, tsunamis and airline tragedies, has had people thinking about their mortality and rushing to see that their affairs are in order.

Saw points out wills are really for the living. “I tell people that wills and trusts are not for the dying; they are for the living.”

Some wills, especially those for high net worth clients, are more complicated than others. Saw cites one that had more than 20 pages and over 70 clauses. “It took a month to finalise that will,” he says.

Rockwills also offers to keep a will or trust for its client for a one-time fee of RM1,000. So, if anything were to happen to the client, the will can be retrieved and passed on to the next of kin or executor so they can apply for probate.

And finally, the company adds a personal touch to soften the dryness of the legalese. They let their clients include personalised messages: terms of endearment or words of advice as their last words. This came about through a suggestion by a client.

 

A sunrise business

In this business, the challenge has always been increasing awareness and understanding of its services. Compared with other financial services such as insurance or unit trusts, awareness is still painfully low, not to mention the distribution reach. But all this is part and parcel of being a sunrise industry.

Saw points out that there are easily 80,000 to 100,000 insurance agents in the country. Rockwills, on the other hand, only has 3,000 agents, 15% to 20% of whom are full-time. But they are not complaining. “They are happy because they have less competition out there to capture this market,” he says.

At the moment, it doesn’t have enough agents although the number is rising steadily. “As market awareness increases, acceptance will be there. People will want to take up this business, which is good for us. There is still a lot of room to grow,” says Saw.

This year, he foresees more people taking up a franchise because of rising costs and the economic slowdown. “Some people worry about retrenchment. So, they want to supplement their income, or start a new career or business.”

This is a new area with a lot of opportunity and potential for growth. “We foresee more people joining us this year. We have done a lot of recruitment campaigns and talks,” says Saw.

Being a good agent is a matter of hard work and persistence. Rockwills’ top franchisee is a lady from Penang who manages to secure 80 wills a month. Her estimated gross sales are more than RM100,000 and her income, says Saw, is easily more than half of what she brings in. 

The previous record was 72 wills a month, but on average, active agents can secure 15 to 20 wills a month. It is a good living as Rockwills’ top estate planners can earn more than RM200,000 a year, according to Saw.

After Rockwills became more well known in the market, others — seeing only the success and not what came before it — decided to get in on the game. “If they knew we had to pump in RM5 million in the first few years, I think all of them would run away,” Saw quips.

He is not that concerned about the competition, however, as Rockwills has a clear head start, not to mention an agency network and proper systems in place to generate wills. 

Some RM2 million went into its computer system. The system is a result of Rockwills’ own experience and it already has 300 clauses in it. As these are already in the system, the agents can generate in a systematic manner the clauses they need for the will they are helping to write.

Rockwills is a conservative company. While it is looking to expand to other Asean markets, Saw prefers to entrench its business in Malaysia and Singapore before venturing to other countries. This is because the estate planning business has a long gestation period and a good local partner is needed in each market before one can get going.

Rockwills opened a subsidiary in Singapore six years ago and only now is it beginning to stabilise and bring in business. Saw wants the business to be on a stronger footing before he ventures out further. “We are in no hurry,” he says.

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