I have a good arrangement with my remisier. He sends a few documents to me daily to keep me updated on the major investment opportunities. If I need information on any company, I send an e-mail to him. He forward it to the research department and give me the information within one day.
I pay 0.3% for each transaction. If it involves $10,000, the brokerage is $30. He keeps about 40% of this fee, i.e. $12. If the trade is $50,000, he earns $60. He also takes care of the paperwork involved in the trade. Although the cost is low, my remisier can look forward to a few trades in each month from each active client.
I hope, one day, that insurance sales can be made as efficient and low cost as trading of shares.
Having been insurance agent, field exec and marketing exec before, and having been a on the other side of the fence as a client of financial services before, I have this to say.
ReplyDeleteInsurance products (especially traditional regular premiums) have one most important and distinctive feature for it's agents and channels. They're designed to be long-term holdings for the clients who purchase them.
That is, recurring sales (and recurring income for agents and channels) wouldn't be regularly recurring, probably once every few years per client.
This is unlike the sales environment for stocks or even unit trusts. Trading, churning, cutting loss, taking profit, etc. allow lots of legitimate opportunities for recurring income in sales and management.
However, that's not to say, that a low-cost insurance structure is not feasible. The product structure can be changed to matchup the developing consumer awareness and keepup with comfortable income requirements for sales practitioners.