Over the years, and in many countries, they have been lots of consumer complaints on the sales practices of:
a) used car dealers
b) insurance agents
c) property agents
Here are the underlying causes of this problem:
a) the sales person is paid a commission on the sale
b) if they do not make any sale, they do not earn any commission
c) it is difficult to make a sale in a competitive market
d) some have to resort to questionable practices to close the sale
e) the products are non-standard
f) there is lack of consumer information
Some organisations try to solve this problem by setting standards of professional practices. But, this is difficult to achieve, due to the inherent conflict, and the need to close a sale in a competitive market.
Here are tips for consumers:
a) Do not buy from a sales person who approach you
b) Do some research to understand the product
c) Get price comparison of similar products
d) Ask questions to get answers that can be compared easily
e) Get an independent person to help you to make the decision.
All the best.
Do not buy from insurance salesmen at roadshows or at street corners or those soliciting on the street.
ReplyDeleteThey are no different from the foreign professional beggars who are also having 'roadshow' at those places where you find insurance agents. If you notice, both these groups are common and permanent features at crowded places.
You seem to be against sales persons. But you have to realize that no company can survive without sales. And who in the company bring in the sales.
ReplyDeleteThose Chief Executives who realize this will do well.
the root of the problem: the sales person does not get paid regular wage.
ReplyDeletebecause they don't get regular wage, the companies that employ them don't have the incentives to limit the number of agents. they keep on recruiting agents even if the market is already highly saturated. recruiting agents is free to them. the burden of market saturation is on the shoulder of their agents, not theirs. they don't lose anything by recruiting more agents. and to make the 'job' attractive again, they have to make up by increasing commission. by increasing commission, they have to increase the price.
both agents and consumers are victims to this scheme, but with one difference: most agents don't know that.
rather than complaining that they don't get enough income (no pun intended) by selling insurance, they should address their concerns to their companies. they should ask for regular wage or demand some degree of exclusivity.
i have ran the numbers here in indonesia: each insurance agent on average sells only about 40 policies in their whole life (no pun intended). and this number could be much lower because the number still includes policies sold by banks and directly.
in singapore, i believe it could be even worse.
If every thing goes well, I heard, there is a group financial planners and lawyers coming together to form a company to provide review service for people who want to know whether they have bought or sold or recommended appropriate products and advice. The service will include scrutiny for mis-selling, misrepresentation, breach of ethics, non disclosure, concealment, etc etc and malpractice that are against the FAA and those that warrant legal actions or actions.
ReplyDeleteA fee is charged depending on how much work is required or done. A report will be provided with recommendation for actions by clients or on behalf of the cleints by the company.
The areas of law practice will be wide ranging and with the objective of recovering loss, compensation and damages, loss due to inappropriate recommendation by advisers or negligence.
This is a welcome development. I hope that this will lead to more level playing field and clients will have a recourse to appropriate actions against the errant insurance agents or advisers.
There have been too many complaints against insurance salesmen and it is time cleansing to be carried out to rid of rogue agents and advisers. This a positive move it augurs well for the industry.
That is great. We can have a third party review on what we bought.The fact is most people i asked and the answer is they do not know what they bought in detail. Worse many didn't know why they bought. It is good that we have someone to check if our agents had sold us the correct product and the recourse to take if they are not. We may or may not sue the agents, it depends on the severity of the miss selling.
ReplyDeleteIndeed i look forward to such a service if the fee is right.
THis is to put all the insurance sales by salesmen under the microscope to check for fraud, mis-selling , unethical manipulation,
ReplyDeleteand non-compliance.
This is the only way to show how unreliable and unscrupulous these cheats have done and to get rid of them.