Hi Mr Tan,
May I ask how does an insurance agent from a tied company earn? Do they have a fixed income + variable commission? How do they work? How does an independent financial advisor earn monthly?
REPLY:
The insurance agent earns entirely on commission. For most regular premium product, they earn about 100% of the annual premium (over the first few years) and their agency manager earns about 50% of the premium.
If you invest $200 a month, or $2,400 a year, you can expect about $3,600 to be taken away from your savings to pay the commission of the agent and the manager. In my view, this is too high.
The actual commission depends on the type of product and the term of premium payment.
The insurance company pays a total to the independent financial adviser a total that comprises the two levels of commission plus the cost of recruiting and training the agent.
In the case of NTUC Income, the total cost is about 40% lower than the market.
This are just my guess. I think that the figures are about right.
Whether purchasing through a tied agent or an Independent Financial Adviser, there will be commission paid to them.
ReplyDeleteEven if you are dealing with banks or salaried advisers, they have to bring in sales justifiable for their salary, extra marketing expenses and office staffs.
There will be cost everywhere unless one day, our government decided to get insurance and investments on behalf of every Singaporeans on a national, non-profitable level.
The problem is with the insurance salesman. He only sells products that carry a high commission. It is his specialty. He does not bother whether the products can meet the needs of the customers efficiently.He uploads and suffocates the customers with products that are expensive. He is not concerned whether customer can maintain the premium. His concern is his pocket.
ReplyDeleteI am sure you hear of insurance salesman being a specialist of this or that product.
The worst kind of insurance salesmen are from Insurance companies because they often have promotions and contests.Usually the contests revolve around meeting certain targets on production or on specific products.You can imagine what the salesmen would do. Just sell, sell, sell and sell until he or she meets the target. So where is the financial planning or meeting the needs of the customers. They have no time for that kind of stuff. It is just about how many customers can they con. It is by hook or by crook and die die to achieve it.
I believe , for Income agents, the spotlight is on revosave now. Just bring the customers through a sale presentation maze and help them to get lost in the maze and then go for the kill. Income salespeople are very good at this.
I love this blog :)
ReplyDeleteDefinitely makes me more aware of the market here.