Tan Kin Lian's Blog: Distribution channels

Monday, March 10, 2008

Distribution channels

Currently, IFA can only sell insurance policies from most of the insurance companies expect AIA, Great Eastern and Prudential. Why is this so?

The road shows from these three insurance companies and also NTUC Income are everywhere. Moreover, their sales pitch is very aggressive, more like salesmen than financial adviser.

Should MAS only allow only IFA with CFP and CPA qualifications to provide financial advice and sell policies from any insurance company? The other insurance companies can sell their insurance through direct means, such as internet and phone hotline?

REPLY

The three companies wish to sell their life insurance products through their own agents. They do not wish to sell them through the IFAs. It is their business decision.

It is difficult for MAS to tell the insurance companies to stop selling throughtheir own agents. I hope that a new insurance company will be set up to sell low cost insurance through the internet and call center.

8 comments:

hongjun said...: But the trend could be moving towards IFA. I was told all Prudential products in UK are actually closed by IFAs. They do not have their own agents. Singapore is moving towards US and UK model.

hongjun; March 10, 2008 10:47 PM
Anonymous said...: Yes , they are the most qualified and competent and responsible enough to use the products available to them to help cleints with their needs and to achieve their goals.
But wonder why MAS would not discriminate the other insurance agents. For the other agents it is the case of having more products to SELL.
This is the problem and understandably so.Surely MAS knows the current standard and competence of insurance agents is too low but unfortunately still allowed to give "advice" and sell these products.
The problems of mis-selling , misrepresentation , unethical and other malpractices arose from this incompetence and inappropriate approach.If MAS is really serious about getting rid of these malpractices it must implement the need based approach and to make it compulsory. Malpractices will not go away if selling or product advice is allowed to continue.
I hope Mr. Tan will bring up these points to the fair dealing consultation paper too.; March 10, 2008 11:34 PM
Anonymous said...: There are more than enough good products for the IFAs to use for their clients. From these three companies I don't think their products are good except for AIA's Universal Life, but it is for high networth. You need not represent all the companies becuase they are either good or bad.If you divide them into good and bad, three quarter will fall into the bad category leaving a small
number actually good for the cleints.
Why then these companies' products sell so "well", you may ask. Answer is ,if you use salesmen to push, anything sells, good or bad, if you pay them enough commission. Black can become white and reverse.
They are the illusionists like David Copperfield.; March 11, 2008 12:30 AM
Anonymous said...: IFA recommended Vivolife as a good plan in last Sunday Times.

????; March 11, 2008 10:22 PM
hongjun said...: Today I was at Yishun bus interchange. I was walking very quickly and a young lady stopped me by tapping her index finger on my shoulder.

I turned back and guess what she asked?

She: Can you help me? Need only 2 minutes of your time.

I: Sorry, I am in a rush.

She: (Gave me "long" face)

I was really in a rush and did not even have time to look back to glimpse which company does she represent. My feeling is either Pru or AIA. Her tapping on my shoulder was very RUDE! Her saying "Can you help me" is hilarious! They should be the one helping us and not we helping them isn't it?

hongjun; March 11, 2008 11:35 PM
Anonymous said...: The FAs didn't not endorse nor condemn vivolife. The comments were that it has unigue features like retrenchment, 125% quaranteed coverage within the first 15 years.
Think about it.Are the features really useful? They are gimmicks. It MAY be useful if this is your FIRST policy (125% cover) but if you have low and not enough coverage what good is 125%.If you have a wholelife already 15 years old you are likely to have more than 125% coverage. So this 125% is gimmick again and only can fool the ignorant and naive and the kind and friendly reporter who wanted to please.
If one has done a proper financial planning what good is the retrenchment benefit.? Don't you have other bills or committments to take care when you are retrenched? What good is having vivolife when one's life is devastated by retrenchment? It may be the only bill you need not pay for 6 months. What about after 6 months?
Come on, if you have a proper financial planning the vivolife so called features are useless and a waste of money. Why pay for them when you already planned for them in the first place? This is another product by ntuc to be sold as a product in itself and not as a solution to one's needs. The features are selling gimmickry.They are designed to help ntuc agents to sell or bluff the unsuspecting.Don't fall for it. If your adviser recommends it as the only and best solution to your need, then buy it otherwise don't fall for it as a product.

Zhumeng:o); March 12, 2008 9:13 PM
Anonymous said...: I understand Ntuc Income allows IFA to sell their products now, then why do you think IFA is singing praises of Vivolife.

IFA is also commission driven with a basket of products to sell.

Understand Ntuc Income pays the IFA better, so it is obvious IFA now sings more praises of Income plans.

You will see more praises forward, I suppose; March 13, 2008 9:05 PM
Anonymous said...: As far as insurance agents and FAs, good products are measured by the amount of commission.If a product carries high commission it is a goo0d product. They will go all out , use any means, unethical and crooked, to promote and push. Look at revosave, a lousy product, yet it was a best seller and popular product with ntuc agents.All of them made huge commission out of it. But who paid the commission. The company? of course not; the suckers are the customers,old and young, both genders..and what the customers get? This is how the 'goodness' of a product is measured by insurance salesmen and the company.
For financial planners and only the honest planners, a good product is a product that meets the need or needs of customers efficiently and effectively. In other words, the customers get the best and not short changed of the benefits. Some products short change the customers no matter which option the customers choose; benefits diluted and customers trapped and locked a and shackled for at least 20 years
like revosave.
So customers, what is a good product? Get a good adviser to help
identify. But never get a salesman.You will be doomed and you don't even know it. MAS highlighted this during the keynote address to members of LIA.; March 14, 2008 10:46 PM