Wednesday, October 01, 2008

Pressure on sales representatives to market certain products


I REFER to the current market situation of Lehman Brothers' bankruptcy which led to the DBS High Notes burst recently. I am a personal financial consultant in a local bank. There are some factors I feel must be revealed to protect consumers' rights.

First, banks usually state that there is seldom or no misrepresentation of products sold, and products are usually recommended based on consumers' needs. A financial needs analysis and fact find are usually done to ensure consumers have sufficient funds and a real need for the product. The fact is that we often face pressure to sell certain products so as to hit our sales target.

Take me, for instance. I am a fresh graduate from the National University of Singapore. I have a nine-month contract with a local bank, but I was told, if I did not pass probation in six months (hitting sales target), I would be asked to leave and pay the $3,000 bond.

So far, I have sold $500,000 in insurance based on consumers' needs, so why is my sales record so poor? This is due to product discrimination. We have to sell mainly investment-linked insurance products. To sell 10 of these is equivalent to 60 products I have sold. Thus a fresh graduate like me who can't afford to pay the $3,000 bond faces a real dilemma.

Therefore, consumers should understand the immense pressure we are facing. Most of the time, we are trained to promote that particular product and try to think of ways it benefits consumers. Welcome to the real commercial world.

Geraldine Teng (Ms)


Anonymous said...

Thank you for your honesty.
We really appreciate people like you.

zhummmeng said...

This is another evidence, from the horse's mouth, that selling and product pushing is harmful and disastrous to consumers.
MAS, are you indifferent to what is going on? You know the causes.You know they are caused by incompetent
intermediaries, product pushing,the company eager to push for high margin products and the lousy and complicated products themselves.

Unknown said...

Speaking from compliance point of view, the bank is obviously doing the wrong thing. All financial products should be sold on a needs basis, and not what product it wants to push, for whatever reason (eg, higher commission etc). I can understand the pressure put on the representative. The authority should take the necessary action to prevent such a situation from continuing because ultimately the consummer suffers especially so the less sophisticated consummer.

Anonymous said...

Hope Representives could step forward and help the victims to minimise loss.
Some of them should feel guilty by now.
In this way, you may also be helping yourself.

Anonymous said...

if the bank earns not enough money from consumers, how can they give you x% of interest rate?

If the banks can't bring in the bacon, how to issue preference shares that pays excess of 5%?

if the banks can't bring in the extra income, how are they going to pay tax to gahment and feed those in the parliament, public service and mas and etc...?

if the banks has no profit, you think they can serve the man in the main street?

do you really want to see the banks to go bust?? Think again!

Anonymous said...

No wonder many innocent customers are losing money at the expense of high margin products of the banks.

Anonymous said...

To avoid such dilemma, please do not go for such type of job with such terms and such banks. Do yourself and others a favour. There are many other jobs to earn a living without being unethical. Also do not be greedy for unethical commissions. Life will be much less stressful and your conscience much clearer.

Anonymous said...

I pity geraldine who as a highly educated young lady has lost her way in life.

We must have the right principle in life governing what we do everyday on what we should and should not do. For example we know that to rob someone is not one of those things we would think is a right thing to do.

In my career, I have rejected certain options in career that are not compatible with my principle.

For Geraldine, I ask that you ask yourself whether if assuming that your parents have the same risk profile like the customers that you served, would you also ask your parents to invest in the same products that you sold? Dont forget that the customers that you sold the products to are somebody elses parents too.

In an organisation like the large financial institutios, as the overall guiding principle, they will not have an objective that deliberately swindle the customers. It is the people that work in the orgainisation that decide on that course of action and you are one of those people.

Dont work in an organisation that is not compatible with your principle and dont blame that organisational pressure. It is you out of many that decides what the orgainisation will do.

ym said...

the banking finance investment is a big bubble industry.. students were attracted to their lucrative payouts and no one wants to do add real value to the economy anymore..

singapore needs less relationship managers, less financial engineers, less fund managers, less investment bankers, less risk managers, less property agents..

Anonymous said...

Bank staff who design & sell such financial products earn high commissions. Unfortunately, it is the public who pay them with their hard-earned money unknownly.

Anonymous said...

you forgot to add insurance agents, they are far to many and 90% of these agents don't add value instead they rob the poor , not the rich, man in the street with their dubious products and unethical selling tricks.
What our economy needs is about 4000 or less real qualified and competent advisers and not insurance agents, to serve the population efficiently.
We must get rid of these unethical and unscrupulous salesmen.

Pissed OFF by insurance agents

Anonymous said...

This lady might be getting laid off from the bank and might be seeking a career as an IFA.

So, the newspaper article will do her good.

Anonymous said...

One standard thing, teller or financial consultant alway say is int rate is low and inflation high. Don't leave in fd. After buying product, inflation become very much higher leh cos lose money.

ym said...

adego, the reason for all the boom and bust and the great depression of the 1930s is the banks and their big-bro central bank..

yes, i want to see banks collapse, and i m happy many banks are going under.. ppl think the banks are so damn important, but think, what are they supposed to do for the economy?.. but instead they have been printing money out of thin air.. ppl must realise that banks are not the single most important institutions and the 700bil bailout must be rejected..

dun earn enuff for expensive gahmen?.. means the gahmen is overpaid, reduce their pay..

dun make enuff to pay 1% interest?.. well, their salary expenses is too high.. cut it..

cant make enuff to pay 5% preference share, why issue 5% at first place?.. also, dont be naive, (dbs/uob/ocbc) are raising money for the bad times ahead not for the good of investors..

Anonymous said...

It is the same with insurance companies .
1. The agents are greedy and unethical selling becomes part of thei life. They sell only whole life products and products that carry high commmission.
2. The companies are concerned with market share and only whole life and endowment will account the major portion of their annual premium income
3. The companies and their agents
have matching goals. BNoth are interested to sell high commision products and therefore the conmpanies exploit the agents' greed by organising specail incentives like oversea trips and incentive for mdrt and cot quailifiers.Mdrt and cot measure how much commission the agents rob the customers. If they rob more they qaulify for higher award like TOT.
This fits in well with the companies' goals.If the companies want more sales they will throw in more goodies for the greedy agents so that the agents will put their brain to work to come up with most unethical pracitces to fleece the customers like "buy ravosave to pay for vivolife" strategy , after all the customers don't even know.
So you see how the companies and agents collabrate to fleece the consumers.
The consumers are the suckers.
I suggest that if you
have some values and ethics this is not the right job for you.There are people who see robbing poor people is not wrong .Their argument is if you don't there will be others who will rob them. So why not I?
Just like you may think the insurance agents who achieved mdrt, cot and tot are successful people.
You think they are are? I don't think so, if robbing the poor of their money is considered successful, there is something wrong. If you know what measures these qualifications you would come to the same conclusion as I have.
Behind all these is money they robbed from the poor.

Pissed off with agents

Anonymous said...

Hi Anonymous@5:21pm

You have a point. The 5% preference shares are also high risk products disguised as a low risk products. Many people are deceived, thinking that they are getting their 5% interest when the bank is just giving them back 5% of their principle.

There is no guarantee that their capital would be return in full to them.

Everlearning said...

You are right, ym. Why pay the bank ceos and the management teams so much remunerations, bonuses and incentives and give so little interest - 0.25% to the customers.
Why preference shares and give 5% interest and lock our hard-earned money for 5 years or more? Why not just give 5% interest for all savings accounts to the general public.
Very dubious practices in the financial banking system and really crying out for reform!!!!

Anonymous said...

ym, what u said make good sense, how u want to make the banks go bust if u could?

u must be keeping your money in biscuit tins and under pillows, while waiting to see the banks go under.

the gahment are overpaid, yes indeed, but who chose them? while the gahment write their own paycheck. so what u want to do?

pple are fighting to get the 5% preference share, never mind if u don't. this is a free market, u sure u still don't want the 5% pref shares? even Mr. Tan Kin Lian sounded interest.

I suggest u can start a petition to do the followings:
1) change the gahment like anwar
2) boycott the banks, because of their fat profit
and don't forget to make sure yr money are not in the banks...

wish u every success!

Anonymous said...

seems like the financial industry is in over-capacity such that savings/monies from the man on the streets are being 'robbed' as well.

Anonymous said...

These financial consultants are all over the island and financial products are pushed in the branches.

Many find it hard to escape from their pressure.

ym said...

abt banks collapse - banks by, printing so much fake money, blowing such gargantuan global property/equity/commodity bubbles essentially doomed themselves.. without bailout of aig, sach and stanley would have been smashed as well..

and no need to rush for 5% NCPS per annum, becoz i think the price will fall in the free-market..

abt petitioning change of gahmen?.. you will have your chance in the next election, dun waste it.. rank your gahmen's policy of more shopping malls, posh condos, casinos, financial-wealth hubs.. alot of capital real resources has gone into them (my view, they are bubbles)..

abt petition of the banking system -
this is a global monetary problem, the central banks and their network of private banks must be stopped from printing fake money..

Anonymous said...

ym, printing fake money? yes they are, if u agree with jim rogers and borrow his views...

and the gahment change? i have done my part, but sad to say... sgporeans still like the gahment, and they continue to write their own paycheck at ... expense.

then what about yr money? in the biscuit tin? or in the bank?

since u know the problem so well, yr money shouldn't be with the banks.

really hope u could do something, some kind of changes, be it banking and/or gahment system, for the good of mankind,

what a screwy world, huh!??

Khiat Han Hwee Adrian said...

Setting targets for consultants are expected whether its bank or insurance company. The salary taken by the consultant must be justifable.
However the product designed by Insurance companies and banks must be fair value to consumers.

The problem do not lie with the consultants. It lies with the insurance companies and banks. Its greed that lure young graduates into banks and Insurance companies.

They joined the industry because they saw the successes of their managers or peers. The successes of them are largely sales of plans that do not offer good value to the customers.

But I also do not wish to see a day whereby all agents and consultants will be forced out of the industry because every single cent is given back to the consumers. There must be a balance.

Anonymous said...

All these young pretty & handsome graduates are trained to sell high margin to suit banks and not customer needs.

Anonymous said...

I like to see the day when salesmen
are paid for selling and form filling only, maybe 10%

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