Sunday, December 19, 2010

Risk of becoming an insurance agent [2]

I saw a friend, who is an engineer, studying to be an insurance agent. He said that this is where he can make more money. I asked him to read this message from the wife of an ex-insurance agent:
http://tankinlian.com/admin/file.aspx?id=297

13 comments:

zhummmeng said...

If he is passionate and sincere about helping people financially he should see that he is equipped adequately in finance, insurance and financial planning at tertiary level.
Those entry licensing tikam tikam exams are only good for salesmen at best and at worse these exams only lead salesmen to become conmen and women.This is what is happening.
The get rich quick life insurance peddling will soon become get jailed fast when MAS implements a slew of rules to tighen up the advisory processes.Changi jail or resort is under utilised.

C H Yak said...

It is sad that people will simply fall prey, thinking it is an easier way to make money fast.

I know it is very tough to work as an engineer and therefore gullible.

yujuan said...

We've seen highly qualified and good engineers giving up their chosen careers to become property agents or bank relationship managers or fund managers.
It is the fastest way to wealth,
so industrial maufacturers and services have to import foreigners to fill the posts. The alternative is to close shop and move overseas.
Why bother to study to get a prestigious paper, for estate agents, may as well stop study at O levels. Such a waste of resources.

Tan Kin Lian said...

An engineer does an honest job. A life insurance agent can earn more money, but usually in a dishonest way and misleading the consumer into buying rip-off insurance.

Steven said...

It is interesting to keep reading comments about insurances ripping off consumers. I agree that most insurance will not disclose too much on their commission so does all those that sell T.Vs, SPA contracts, funds etc. It is really good to educate consumer about different options of insurance and investment but I think it is too harsh to use a blanket cover to blame an insurance agent trying to earn a living here.

Vincent Sear said...

I think that Zhummmeng has placed too much field value on tertiary education and too a low value on CMFAS exams. Ethics and moral values are seldom tertiary teachable.

Remember that there're doctors and lawyers who want to charge as high as they can get away with just because they feel that they've paid a lot for their education.

CMFAS exams are not tikam-tikam too. They do require real technical knowledge to pass. The MCQ format is not structured to be tikam-tikam easy entry, roll the dice a few more times and you'd get your sixes. Points are deducted for wrong answers, not just zero as in O Level MCQ.

That is, the more you try to tikam-tikam, you'd average out losing more points and fail. However, having the necessary technical knowledge doesn't necessarily means having the ethics too.

The trouble is with some agents pretending not to know something or intentionally withhold information to earn a quick buck.

I agree with Steven as to not being too harsh across the board. There're many good and honest agents and advisors too. Most electronic and electrical appliances, watches etc. come with huge commission priced in too. The bank takes deposit at 1% and lends out at 24%. Examples are many.

Another point is, not all customers are angels or fools. Many of them do know what they're in for. They're willing to pay the price as long as the product performs within their expectation.

The trouble comes when something goes wrong somewhere along the line. Then we get agents claiming that they told clients everything and clients claiming that they know nothing. It's usually somewhere in between, no extreme.

zhummmeng said...

The tkam tikam exams are too low to be useful to help the consumers.They are easily passed. This is a knowledge based profession and NOT a sales job.How about being operated by a surgeon with a butcher's diploma? or a heart specialist with a plumber's cert?
As I said many time they are so easy that your pets can pass too. At the end of it they are only good for salesmen and NOT for advisers.FINANCIAL PRODUCTS SHOULD NOT BE SOLD LIKE ELECTRICAL APPLIANCES , WATCHES OR CARS. THEY SHOULD BE PRESCRIBED LIKE MEDICINE AND DRUGS AND THE DOCTOR TO BEAR THE RESPONSIBILITY IF THINGS GO AWRY.
If the car you bought has defects , they can be discovered quickly and warranty applied despite you have taken it for test drive and also you saw the car with your eyes open big big , touched and felt it and smelt the car.If there is a loss it is ONLY ONCE and NOT repeated and caveat emptor is fair but not with life insurance. 99% of consumers are clueless like sotong.They become easy victims to dishonest agents and also to unqualified but slightly honest but also sotong insurance salesmen.
There are many too dishonest and unqualified agents.
Did you say 'performance" up to expectation? If the consumers know insurance agents will have to eat grass.The problem the rot is suppressed or buried deep below a heap of rubbish supplementary benefits like the limited payment WL.
The insurance agents are protected under section 27 of the FAA if they meet the reasonable basis in their recommendation. Alas , as many as 99% of them don't meet.Reasons are they are greedy; they are dishonest; they are unethical' they willfully breach the law; they are incompetent and unqualified.

Vincent Sear said...

Rhetorics cuts no ice. 99% of clients are sotong? 99% of agents are incompetent and greedy?

Let the readers be the jury. Or better still, some readers come up with statistically backed figures.

I'm siding neither agents or clients. I just find your claim of 99% both ways unbelieveable in financial system still as orderly as it is, imperfect as it but certainly not 99% both ways.

zhummmeng said...

If you don't believe just ask yourself why regulators are banning commission now albeit reluctantly.
As one Indian regulator said 'we having been protecting the financial institutions all these times it is now time to protect the consumers.'
Unethical practices are bursting at the seam it is too obvious not to protect the consumers now.
Did you know that the OX, UK and US are raising the bar for new entrants. Effective 2011 July new entry requirement is a degree in financial planning and NOT the tikam, tikam certs that are good for the monkeys.Is it a wonder why consumers are getting monkey 'advice' product advice option 3?
I challenge you to debunk my statement that 99% of the insurance salesmen are NOT competent and qualified and 99% of consumers are blur like sotong , even graduates of MIT or Harvard. Please do. Prove me wrong. I am also not taking side and that is why I bombarded both sides. I want the regulator to take notice of this anomaly.
How to cut ice with you? The blind leading the blind.

dave said...

The whole financial industry worldwide is changing and I am sure Singapore will follow to do away with commissions payout. Mr Tan I hope you could do an analysis and if possible create awareness to all job seekers or even current insurance agents and financial adviser representatives on how this will affect their income. I know of companies giving 'allowance income' for new people and managers creating a exciting career saying the agent can earn $x figures etc etc.
In the end, their relatives and friends will be the ones buying 'unnecessary products' just to support them and if they cannot sustain, they will just leave the industry and the company and manager will benefit from the commissions.
Maybe the media should run an exclusive interview with you on this area since you have seen how the industry evolve

zhummmeng said...

dave,
the media won't....Even Lorna , the Sunday Times writer would think twice about writing the truths, the ugly truths.Any adverse writing would affect the revenue of SPH.Imagine these insurance companies stop advertising full page.
Conflict of interest , lah.Cannot depend on the media..the consumers have to take the actions with Mr. Tan championing their cause.

Vincent Sear said...

Zhummmeng, you're the one who claimed 99%. The onus is on you to prove it. I'm an disinterested party since I'm not involved in the industry anymore. Since you're so passionate about it, I wish you good luck on your crusade.

johnseomaven said...

I suggest to those individuals who wish to become an insurance agent or broker to take licensure exam online. For example, if you wish to sell insurance in Texas then you are required to take a Texas Insurance License exam. Most online providers offer courses at reasonable price where you can take the exam anywhere and anytime you want. Most courses feature a training material, preparatory course as well as Instructor connect program for you to interact with the online teacher or instructor to guide you in different phase of the exam.

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