Tan Kin Lian's Blog: Are all financial advisers bad?

Sunday, February 06, 2011

Are all financial advisers bad?

Are all financial advisers bad? The truth is - they belong to different categories.

Some financial advisers are honest, and do take care of the best interest of their clients. Some are crooks who knowingly tell outright lies and half lies to con their consumers. The majority fall in between, i.e they think that, having put in the effort to achieve the insurance qualifications, it is only right that they should make a living by doing what they are trained to do. Many are not aware that the products give a poor deal to the consumers - some know but do not really care - they have to make a living.

There are quite a few financial advisers who are outright crooks. Some consumers who were conned by them have sought my assistance. These crooks are able to carry out their misdeeds with impunity. When the consumer complained to the insurance company, they received excuses and encountered delays. Some consumers give up trying to lodge the complaint.

It is this bad situation that prompted me to advice consumers to avoid all financial advisers. It is difficult for an unwary consumer to tell an honest financial adviser from a crook. They are likely to be give a bad product anyway, even from the advisers who may not be acting dishonestly.

Singapore had been following the practice of UK and Australia in the regulation of life insurance sales. The regulators adopted the approach of requiring the financial advisers to act honorably and professionally - whatever that means. UK and Australis have decided to abandon the professionalism approach and have taken the drastic step of banning the payment of commission on life insurance products. They found that it is impossible to manage the conflict of interest.

Some financial advisers do not like my message and have resorted to making personal attack against me in other blogs. They claimed that, when I was in NTUC Income, I had been using agents to sell life insurance products. These people are either ignorant or malicious in distorting the truth. They should know that the commissions paid to the insurance agents in NTUC income during my time were much lower than the market rates and the insurance products offered fair value to consumers. This is how despicable the crooked financial advisers can be.

Tan Kin Lian

5 comments:

Singapore Stock Picker said...: i do not think that all financial advisers are bad. they probably start off with good intention, thinking that it would be great to protect their clients' interest while making money.

however, as so many have mentioned, if you are not profitable or not bringing in the money, ethics stands one side.; February 06, 2011 10:07 AM
zhummmeng said...: Are all insurance agents bad?

ONLY 10% are good, honest and competent and who always make sure the interest of their is at the heart of the process. They are qualified in the fields they consult and are specialists in a few areas. They decline areas they are not competent. They reject cases if they think that the clients are smug to think they know and insist they want their way.
The rest of the 90% fall into the dishonest or incompetent or both groups. They are salesmen and women who have no skills but use trust and other approaches to con their customers into buying the products they have in mind. They present themselves as honest, trust worthy, caring , sincere , helpful but have no financial skills and these agents are the most dangerous because their customers trust them so much with their money.The customers don't realise they have a thief in charge of the bank account and will screw up their financial life.
Example: buying from your sister or brother.. aren't they trustworthy, honest and who will put your interest first? Yes, but if they are not competent, no financial counseling skills and use inappropriate approach and wrong product and they will ruin your financial life...eg..you have a investible $50k in your CPF account and your objective is to invest for retirement which is 20 years away.You are risk averse.You need a future income of $1000 from this investment for 20 years monthly. Your mdrt brother agent out of concern recommends a LOW risk single premium endowment with a projected return of 4%. Is this product suitable to meet your needs? The answer is NO.
Many of the agents fall into this group.. and they ruin a lot of people through their incompetence.
They are afraid themselves. They always tell their clients they are sincere. The agents forgot that these traits don't help their clients financially. It is blind leading the blind. Sometimes I think these agents are not sincere because if they are they should upgrade themselves so that they give the best advice. The excuse is they can't study... my advice to them is leave the industry because they are NOT fit and proper and stop screwing up others' life unwittingly and unknowingly.
ONLY 10 of insurance agents are qualified but there is a matching 99% of consumers who are clueless comatose, gullible dumb to feed the 90% with business. It is very interesting and yet MAS is adamant about caveat emptor.It is like Pontius Pilate washing his hands in public.; February 06, 2011 12:19 PM
Vincent Sear said...: The career path goes like this. First, the potential agent is sold the idea of the well-paying career helping others to get insurance coverage and invest for retirement.

Then, he has to go through all the regulatory exams, regardless of whether he's O-level or graduate. The exam fees, usually he has to pay himself as no company and few sales managers would risk paying for repeated failings, or jumping ships after sponsored passes.

Once he has passed all the requisite exams, he then can be contracted as an agent. He'll then be given higher levels of inhouse product and sale technique trainings, free. But he must maintain a sales quota.

Because regular premium products usually come with 3 to 5 years of commission, there's always the pressure of meeting new sales quota every month. For not meeting that, the agent would be asked to leave as a "deadwood" and forfeit all future commission he he had worked for. So it's a ratwheel.

Unfair contract terms in insurance practices begin with agency contracts, even before policy contracts. A company shouldn't be allowed to hold an agent hostage to future commission due by current sales quota.

Many got disillusioned and left the industry. Those who survived and thrived, especially those MDRT sales levels and above, I find it hard to believe there're so many clients who need expensive policies, if it's indeed needs based advice and selling.

To them, the Chinese saying, 君子爱财，取之有道。A gentleman may seek wealth, but do it in a moral way.; February 06, 2011 7:31 PM
yujuan said...: Not all are bad, but alas, they are in a minority. Came across one from OCBC Bank and one from NTUC Income, but the Income man is not a
commission based agent.; February 07, 2011 3:42 PM
Soojenn said...: Nicely summarized about financial advisers.

Many financial advisers are crooks, and sell you the products in which they get the highest commission. This includes people who are your"friends". One should beware especially with "friends" where one tends to leave it to them to serve your best interest. Biggest mistake. Full due diligence should be done irrespective, and expecially if they are "friends" and relatives.

"These crooks are able to carry out their misdeeds with impunity. When the consumer complained to the insurance company, they received excuses and encountered delays. Some consumers give up trying to lodge the complaint."

A good way to deal with such insurance company and the financial advisers is to name them. Your blog will be a good place to start. Then perhaps these companies and thir financial advisors will wake up, and also others who use them will be made aware of thieir unethical and unprofessional behaviour.

Most of these financial advisers also lacking in professionalism and appear not to understand clinet's confidentiality. Great Eastern Life Assurance Co. Ltd. has financial advisors who behave as such. The companies will always claim to conduct an investigation and then give all kinds of excuses, ask you for all the proof, and then finally inform you that they have handled it "internally" and need not tell you how thy disclipline their financial advisors, who continues to work for them.

I had a financial advisor who worked part time with AIA, sold me a highly expensive life insurance (endowment) product, then left the company without even letting us know, and this was supposed to be a "friend" of the family?

I believe a lot of people will be able to submit names of such unscrupulous insurance companies and their financial advisors who take their clients for a ride, if you provide a section for this.

The financial advisers that resort to personal attacks on you on other blogs are probably the ones that are involved in such unethical behaviour and the intention is obviously to smear your credibility, which you shoud just ignore and not engage them.

There are other people who appreciates the information that you have provided on your blog on such matters based on your experience and FOC, including myself. Thanks.. TKL; February 08, 2011 1:20 AM