COMMENT POSTED BY A READER
Dear consumers,
if you want your views to be considered please go to the www.mas.gov.sg to offer your feedback. If you don't want to be conned by insurance agents anymore this is an opportunity to tell the panel what you like to see for the future industry. It is easy to give your views. Just answer according to the questions asked.
There are 5 areas to be changed.
You get value for money. If you worry about having to pay all the fee upfront you can arrange to pay by installments as if you are paying the regular premium.
Zhummmeng
Dear consumers,
if you want your views to be considered please go to the www.mas.gov.sg to offer your feedback. If you don't want to be conned by insurance agents anymore this is an opportunity to tell the panel what you like to see for the future industry. It is easy to give your views. Just answer according to the questions asked.
There are 5 areas to be changed.
- Ban commission and move to fee based.
- Remember fee based is NOT on top of the commission embedded in the product.
- If it is fee based the products will have no commission and you pay fee only if you agree.
- It is transparent.
- It is told to you UPFRONT plus the advice you will receIve.
- You can reject if you feel the fee is too high.
You get value for money. If you worry about having to pay all the fee upfront you can arrange to pay by installments as if you are paying the regular premium.
Zhummmeng
Yes, will do just that- ban commissions, and make it fee based.
ReplyDeleteThere are two types of "financial advisors" in the insurance business, the commission based agent and the company employed advisors, the latter drawing a salary, and all the time these employees give the best advice to clients, without prejudice.
But, doubt MAS would take up this recommendation, as usual would say robot-wise,
"Oh, that's too drastic a move. It would upset the industry."
There are currently not many Financial Advisers offering fee-based planning. One of them I asked recently quoted about $5,000 for a comprehensive financial planning. If fee base planning ultimately becomes law, I am afraid many folks out there may not be able to afford such hefty fees.
ReplyDeleteThe commission system is used to drive sales, i.e. the more you sell, the higher your income.
ReplyDeleteThis was only half the system when TKL was NTUC Income CEO. I think that's a balanced system. The other half of the system was to hire salaried supervisors and managers with modest incentives according to performance of agents.
The other half of the system in commercial companies is managerial overriding. That's how commerical insurance companies can produce millionnaire agents, supervisors and managers. They're supposed to use their overriding for agency overheads and leave reasonably comfortable incomes for themselves.
That's how it's supposed to work but not how it works out. Agency supervisors and managers would be tempted to drive their agents to as high sales as possible to increase their overriding and expand their agency. Agents would ride along since it means more income and promotional prospect for them, as promotion is based on sales, not degrees or services.
Some successful agents making too much money would give their clients frequent treats and other favors in return. But they're not allowed to rebate commission under MAS directive. If caught, it's a dismissal offence forfeiting future incoming commission that took years build up, and a bad record and reputation in the industry ruinous to their future.