Sunday, July 27, 2008

Financial adviser wants to help people

Hi Mr Tan,

I just come accross your website, when I m doing my study for my Module 5 of CMFAS exam and try to look for more information regarding Insurance.

I wanted to become a Financial Advisor, because I thought it is a good prospect job as it can earn income and can help people or their family when they are sick or after they passed away.

I never come accross to become insurance agent, until I made a claim for for my surgery from private Medishield and found that insurance is quite good.

Furthermore, I have read thru Module 5 and Module 9, from what the text book write and information giving, it seem insurance company really help people to save and be prepared when they need protection.

From Module 5, found that MAS did stated in rules and regulations as well as guidelines for FA to follow. Well this is good, we really collect client's info, analysed, and recommend based on the clint's needs.

After reading your blog, and after knowing what is cost of distribution and effect of deduction, I started to doubt my decision.

I would like to ask some questions:

1) It is all high cost finance products is not good?
2) Do you think it is a good idea to do saving/invest thru Insurance?

Mr Tan, I will be very appreciate if you can give comments to my decision to become insurance agents or share your experieces with us or my fellows friends. I want to earn money but knowing that(君子爱财,取之有道) a person earn the money in proper manner. I want to help people and educate people how to save and get protection when they need (this is what I want too)

Lastly, the company which sending me to training is Y. I think there are many people like me who is thinking that agent can help people and earn money. But I hope you can explain to us the actual and the reality of this world and market and what are the ways is the correct, if we want to become insurance agent.


If you sell insurance for Y, you can earn high commission, but your customers will get a poor yield.

I advise consumers to buy term insurance and invest in a low cost fund. They should avoid high cost insurance products, such as whole life, endowment and ILP.

Read the FAQs in my website,


Yong Kiat said...

Seriously in Singapore, we do not need so many Financial Agents, we only need 1 Independent Financial Agent (IFA) per 1,000 population.

If Singapore have a population of 4.6 million, then we only need 4,600 qualified IFAs. However, if I am not wrong, the amount we have is a five-figure amount. (Anyone can tell us how many Financial Agents in Singapore?

In Singapore, we have 1.6 doctors, 0.3 dentists and 4.8 nurses/midwives per 1,000 population, but the number of Financial Agents in Singapore is more than these numbers combined.

Not everyone need them, those first timers in Financial Planning, and those with a high net worth asset may need them.

After going through Financial Planning with a IFA and also going through a good Financial education, many of us should be able to handle our own Financial status ourselves.

The government should make "Personal and Family Financial Planning" as a module compulsory for all Final year ITE, Polytechnic and University students, and also those going to ORD from their National Service. They have to pass a written and practical test.
These are the people who need such education the most.

Another module that I suggest that must be made compulsory and they have to pass a written and practical test is "Relationship, Marriage and Family Planning" :-)

Mao said...

Textbook theory is always beautiful. Commercial decision and personal interest my be another thing!

I worked with a well known VWO (Volunteer Welfare Organisation) in early-1900 for good cause. Every Monday am, we attended motivation session by the CEO. He share his experience how he help the needy, he want volunteer and staff to rise more and more charity fund to help the needy (?). The CEO was paid so called "peanut" at $600000 !!! Many employee with consciene resign to support him. Why? Text book theory and written law were not practised in real life. We had known inside story. Now, you noticed him in a jailed and released soon!

君子爱财,取之有道. If yes, there is no financial crisis in USA.

Why those top Banker who are paid multi million dollars per annum bring the financial world to this end? The premium of your client may have been gone. Being a Insurnace Agent or Financial Adviser, can u sleep by knowing such bad situation if any.

I was in VWO and Insurance line in 1900's. I had kown the CAUSE AND EFFECT. I given up my insurance career and charity career as early as 1900's .

To the folk without a MBA, I urge you to keep money in CPF and buy DPS/Midishield only.

zhummmeng said...

These are the licensing modules which i don't think very much of them. They are TOO LOW in standard and would not equip you with the proper tools to help people. These are 'tikam tikam' exams ALL insurance agents take to SELL insurance. Selling or pushing insurance to people CANNOT help them but cause hardship only .This is MAS's licensing mill to churn out run of the mill insurance salesmen to feed the industry
You can see or have read many of the postings in this blog how selling has caused so much problems and distress to customers. How many customers have been cheated and shortchanged because of selling because selling doesn't take into consideration the cusotmers' needs but only the sellers' needs. That is why you find a lot of insurance agents being cursed and sworned upon every day.
You can see the modules don't teach you to help people but teaching to how to push insurance products to people who don't need them.Some of the ideas are obsolete and belong to history books. Unfortunately you have no choice, this is the licensing requirement in order to SELL insurance.
If you truly and sincerely want to help people there is a course you MUST take, a course in financial planning. This course is offered by
Login to discover what it really means to help people, what are the necessary skills and knowledge required and to know the approach to help people. This course will lead you to acquiring a globally recognised and accredicted professional qualification , the CFP. You will be a truly financial practitioner who is able to help people with most if not all their personal finances and not some insurance salesmen who masquerade under all sort of titles. You have to be careful. If you start your career right from the start you will find what you are doing very meaningful and fulfilling.
Remember to login the website of FPAS to get a true perspective of
financial planning.
All the best.

Loh Hon Chun said...

All insurance agents or Independent Financial Advisers (IFAs) take commission from you. However, if you really wish to buy from them, I think IFA is a better choice at least they do some comparison on the different products in the market and pick the better ones for you. Tied agents can only sell their own products.

Just my opinion from someone not in the financial industry.

zhummmeng said...

There is an over population of insurance agents.Currently at 14,000 we can afford to eliminate 10,000 as workers for the other industries. Singapore cannot over the long term depend on foreign talents.It should explore tapping from other industry and the life insurance industry is a good source.
MAS must look for ways and means to bring about a "transfer" of some these destructive agents into others, especially those who are poorly qaulified and product pushers. They can be redeployed where their talent is used properly without causing harm to consumers.
Foreign workers are potentially a social problem and to prempt this MAS has to tighten and raise up the entry barrier for new would be insurance agents and same time get rid of those poorly qualified and errant existing agents by having a high level playing field where one rule applies. Selling and peddling insurance products should be banned.Advisory approach should be the minimum means to consumers' needs. It would be killing 2 birds with one stone, one for providing other industries with workers and the other to make the life insurance industry a safe place where consumers are assured of safety , proper, ethical and responsible financial advice.

Yong Kiat said...

One day, as I am talking to someone from Human Resources in my company, I highlighted that nowadays quite a number of people who have studied technical degrees and diplomas (eg Engineering, IT etc) work in different industries of what they are trained for. Many of them who did not work in their relevant jobs goes into sales.

The reasons:
Better Income,
Better Working environment,
Better Working hours

Working in the technical field is tough and the pay nowadays is poor due to the competition to foreign talents who are more technical inclined, willing to take low pay and work very hard.

I suggest that the government have to come out with a law stating that all graduates from local polytechnics and universities must sign a bond and they have to work for 3 - 5 years in a relevant job that they are trained for, after which they can choose to work what they like after that.

All qualified IFAs should be married and at least 30 years old, and at least 5 years of working experience. These people are able to give a better advise due to their life experiences, and not that sales oriented when they are just fresh out from polytechnic or university

Jill said...

Why must you work in the field you trained in? What if you don't like the work, but decided to finish school off?

What does being married have to do with the ability to give financial advice?

Loh Hon Chun said...

I agree. Why must we work in the field we are trained in? If there is a need for a bond, then I think education in Singapore is going to be worse.


Blog Archive