Friday, December 24, 2010

High income and integrity

A young graduate is torn between the attraction of becoming a financial adviser, with the promise by the agency manager of 3 to 4 times of the typical earnings, and the knowledge that she might be causing harm to her friends and relatives. The agency manager had advised her to approach the people she knows and get them to switch to the investment-linked policy that is actively sold by their insurance company. She realized that this policy has a high deduction from the consumers.

She asked for my views on this important choice. Should she take up the job to be a financial adviser?

The easiest way to earn a lot of money is to sell products that give a large margin to the seller (i.e. the financial adviser and the insurance company), but this must surely be at the expense of the buyer. There is no magic that can give a good income to the seller without harming the buyer.

Some new financial advisers do not know that they are doing harm to their friends and family members, because they have been misled by the agency manager. Some financial advisers know the truth, but they only take care of their own interest and do not bother about the people that they are harming.

It is easy to fool consumers to switch to a new investment-linked policy. I have seen many cases where the financial adviser tells half truths and blatant lies to an unsavvy customer, such as:
  • They can earn 9% projected return (This is not true, as the 9% is just an assumption which is too optimistic in the uncertain environment today)
  • The adviser does not tell the client that there is a big deduction that can reduce the yield of 9% to 4% or lower. If the yield of 9% is too optimistic, the net yield will be terribly low.
It is blatant dishonesty, but seem to be quite common. Many people are just taken for a ride. By acting dishonestly, the financial adviser can earn a high income, and the agency manager can also take a big cut. It also earns a big profit for the insurance company.

You have to decide for yourself which route you wish to take. It depends on your conscience. I believe that it is better to earn less, but in an honest way. You can also talk to your parents and get their advice.

Tan Kin Lian


zhummmeng said...

Nowadays insurance agents where got conscience? Whether relatives or friends no difference, start with them first.They are trusting , right? After all relatives and friends sure trust agent friends and then their friends . Then learn the skill of telling half truths and lies from their training department with compliance closed 2 eyes they will take on the strangers at roadshows .How to con the passers by in 2 minutes Don't tell when not asked or try change subject if question is difficult or pretend you didn't bring calculator .Use your body language to your advantage and create buying signals and incentivise the prospects....
So you see any difference between conmanship and salesmanship? The line is blurred, porous..Salesmen or conmen no difference.That is why they need titles like executive financial consultants or senior consultants... walau, fierce, eh? Investment bankers pale in comparison, lah.
The truth is their company wants them to con the already kenna conned many times connedSUMERS with these titles. The fierce title is these conmen and women are financial experts.
I remember a friend agent with a local company telling me there are fearful or fearfool executive financial consultants who KNEW next to nothing about ILPS or investment suddenly overnight became 'experts' in ILPs when the company laid the rules that to qualify for incentive trip must sell or peddle or push a certain amount of ILPs.Suddenly sale of ILPs shot through the roof.This is awesome , hor but it is dangerous and scary. Wonder who are the victims? hope not your close ones. These hitherto fearful executive financial consultants became fearless guru and giving talks on ILP investment freely drawing big crowds, night after night, even they held clinic session, mentoring the new hero woshipers ..How powerfool incentives and money can transform people into monstrous experts..MAS's MoneySense ahould adopt this approach to create financial literacy.

silverybay said...

"People who work hard sleep well, whether they eat little or much. But the rich seldom get a good night's sleep." - Ecclesiastes 5:12, Bible Quote

Whether you made a lot or little money, if it's an honest day's work, you will sleep soundly and sweetly.

michael13 said...

Whatever ones want to do (well in life) either in business or to be a salary-earner, everyone needs to remember that "to compromise on INTEGRITY is to ask for more problems and troubles sooner or later".

'Merry X'mas and Happy New Year 2011' to everyone

AC said...

She needs to ask herself what is the key
motivation if she chooses to be a financial advisor. Is it for the money or does she truly wants to a honest advisor? I don't see anything wrong if she truly wants to be a honest advisor as she can help to improve current lapses in the industry, albeit in a small way. I would strongly advise not to put money as the key motivation for her career choice. Many people are successful today not because of money alone. There are many important things in life than money. But she has to find that out herself.

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