Thursday, January 24, 2013

FAIR panel has struck the right balance

22 January 2013

Editor, Forum Page
Straits Times.

I refer to the letter from Ms Maybel Tang "Look after financial advisers' interest as well, ST ....".

I commend the Financial Advisory Review Panel for striking the right balance between 
the interest of consumers and financial advisers and for setting the right direction for the future.

Ms Tang is worried that the direct channel will take away a large part of the business of financial 
advisers. Past experience has shown that this channel will only attract a segment of the population
who are self educated. The channel will probably offer only the basic insurance products that the financial
advisers are not interested to market, due to the low commission. 

The financial advisers can continue to sell the more complete insurance packages that are 
created to meet the more sophisticated needs of consumers.These packages require the expertise
of the financial advisers to find the right match for the consumer.

Ms Tang is worried that the capping of commission will reduce the supply of new entrants
to market life insurance products. This may be a desirable outcome as more entrants are 
needed for other sectors of the economy. We should not have a lop-sided concentration of
our young people in the financial services and property sectors. 

Consumers are willing to pay an fair fee for financial advice. After all, they now 
pay a fee for medical and legal advice that suit their needs. The financial adviser needs to 
show that their advice is valuable and useful to consumers.

Tan Kin Lian
Financial Services Consumer Association


zhummmeng said...

Capping the commission is good because this will stop those people who think of getting rich quick from joining. Anyway the industry is over saturated and the other industries need more workers. In fact the current population of insurance agents should be chopped to half and hope the direct channel will do the job.
Why should consumers pay high commission for product information when this will be supplied when buying direct, right?
I advise consumers who are called or cold called by their insurance agents to pitch products or new products to agree with the meeting because you can buy direct without paying the commission for the pitching and on top of it these agents are certainly unqualified and incompetent. So ,don't fall into the trap.

zhummmeng said...

The only group of products is the ILPs and as many as 95% of the insurance agents are NOT qualified to 'sell' them. In fact I recommend to MAS to ban the agents from selling them.Worse they push toxic regular ILPs poisoning their customers' financial life. And I bet you, after the introduction of direct channel many agent will shift to these products because these regular ILPs offer the highest commission and customers EASILY conned into buying them. The sale of this group will shoot through the roof and this is very dangerous. Many consumers will be poisoned. MAS must be vigilant against the incompetent sale of these product.

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