Wednesday, February 06, 2008

Agent plays an important role

The agent (e.g. stockbroker, property, insurance) can play an important role in the new economy. They can help the customer to assess information, give advice and handle the transactions.

I communicate with my stockbroker by e-mail, mobile phone and SMS. I ask for information and also make transactions (to buy or sell shares or other securities). The stockbroker can ask his colleagues in the research department to get the information that I need.

I pay a brokerage of 0.3% on the shares that are transacted. This is much lower than the initial spread of 3% to 5% that is charged by unit trust and insurance funds.

I hope that the insurance industry and the agents can be as efficient as the stockbroking industry, and offer their products at lower cost to the customers.
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3 comments:

Anonymous said...

Your adviser plays a VERY IMPORTANT part in the advisory process. It is make or break for your financial future. A poor and wobbly start and you never achieve your goals.
That is the reason why many CPF members still licking their wounds from losses because they never got a qualified and competent adviser in the first place. What they got was a salesman who sold them funds but didn't guide and advise on the investment.
Similarly why many people are still under insured is because they got salesmen and women to"advise" on their insurance. Do you think the so called insurance agents know anything about insurance? It is paradoxical to say agent don't know about insurance, right?You be surprised that insurance planning is not about selling you a piece of policy and your concerns and fears will go away and you will be alright and get piece of mind.It is about getting all your needs addressed.This is also the conscience of the advisers plays a key role.This is here agents are 'gabra' and have no idea. Can anyone dare to say that they have peace of mind. Think again. If you are not around can you be sure that your loved ones will continue to live as if you are around? Check your insurance.I bet you have a load of rubbish whole life, limited premium and endowment. Tally them up to see if you have enough despite paying so much premium. What is the point of paying so much premium and yet you have so big a gap. Peace of mind? I think it is time to change your agent.He or she didn't do a good job.He or she wasn't interested in your financial future. He or she was dishonest, unethical; only interested in commission and their own future.
Do you know why this blog promotes 'buy term and invest the rest'?
It is because there is great concern for you; to educate you so that you will not be bluffed by insurance salesmen; also to let you know this is the best approach to take care of your protection and wealth accumulation efficiently and effectively.No wastage with a lot of garbage frills and decorations. Straight forward and simple, plain vanilla products.
If you have a good qualified adviser he or she can help you to achieve your goals because they guide you all the way and not abandon you after a sale is made like the insurance salesmen.
Remember to choose a good adviser. If you do not have one you can go to www.fpas.org.sg to get help to get an adviser who is attached to the company of your choice.Eg. you want one who is representing ntuc.

February 06, 2008 9:26 PM
Khiat Han Hwee Adrian said...

A stockbroker can transact several stocks a day because of speculators and short term investors who buy in and out almost everyday.

Can I say that the days of an insurance adviser is numbered because:

1) An insurance adviser is highly unlikely to transact several term a day as each plan will be for very long term. The adviser have to look for the next person for planning.

2) Commission is low especially for term insurances. It is difficult and take a lot of time to plan and convince the next person to the term insurance. The adviser eventually get paid peanuts for the vast amount of time taken.

3) Next comes the emergence of index funds which pay low sales charge and no wrap fees. Adviser may even not earn a single cent to introduce these funds.

4) There is also no guideline on how much an adviser is worth for his time and advice. If the public view an adviser time as $10/hour, how many hours must an adviser works to compensate for his business cost? Is it possible for him to get 10 customers a day in order to earn that $100/day. Is meeting that 10 customers day considered as efficient?

5) Financial planner is different from other professional such as doctors and lawyers. People look for them when they are seriously sick or need legal advice. People don't usually think they will need a Financial planner due to their low urgency towards financial planning.

Financial Advisers took great pains to gain hybrid knowledge ranging from Insurance, Investments, Tax, Estate, CPF, Retirement, etc. They also keep updated on all the changes and investment climate. Do you think that it is fair that advisers should always get lower paid than other professionals?

Should the public get all the advices for free and then buy the cheapest term insurance and ETFs and they pay peanuts to the agent?

In your opinion, do you think that if there are no proper framework protecting the advisers in term of compensation scheme, a too drastic change in the benefit towards the public will kill many good advisers which may subsequently result in more social problem?

Adrian Khiat
http://akhiat.blogspot.com

February 07, 2008 2:38 AM
Anonymous said...

It is hard to find one who can be trusted and competent at the same time. We don't know because we don't know what insurance agents should have and know.It seems dangerous nowadays.

February 08, 2008 12:17 AM

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