As a insurance agent I am very concerned that recently the portal below have launched sales of insurance term and whole life products online giving as much as 50% commissions back to the client. They represent quite a few reputable insurers.
http://www.fundsupermart.com/main/research/viewHTML.tpl?articleNo=8179
I know that the FAIR recommendations has suggested the sales of insurance products online which to my understanding insurers have to redesign their products to make them cheaper and not rebating commissions like this case.
With such portal in place, clients will tend to 'bargain' with agents asking for commissions rebate. Are we going back to the past practices 10-20 years ago of commissions rebate.
We may come across clients asking for quotes and finally enticed with the 50% rebates and purchased online. This will definitely impact the livelihood of the estimated 20,000 agents in the market.
Something is not right by allowing corporate entity to rebate commissions. Is this a common practice worldwide or are we the first in the world to give commissions rebate to consumers.
What is your view Mr Tan.
REPLY
I understand your concern about the practice of rebating. However, I do not have any strong views on this matter.
I believe that a good insurance agent, who is able to advice the client properly, deserves to be fairly remunerated. It may be better for the agent to go on a fee-based basis.
http://www.fundsupermart.com/main/research/viewHTML.tpl?articleNo=8179
I know that the FAIR recommendations has suggested the sales of insurance products online which to my understanding insurers have to redesign their products to make them cheaper and not rebating commissions like this case.
With such portal in place, clients will tend to 'bargain' with agents asking for commissions rebate. Are we going back to the past practices 10-20 years ago of commissions rebate.
We may come across clients asking for quotes and finally enticed with the 50% rebates and purchased online. This will definitely impact the livelihood of the estimated 20,000 agents in the market.
Something is not right by allowing corporate entity to rebate commissions. Is this a common practice worldwide or are we the first in the world to give commissions rebate to consumers.
What is your view Mr Tan.
REPLY
I understand your concern about the practice of rebating. However, I do not have any strong views on this matter.
I believe that a good insurance agent, who is able to advice the client properly, deserves to be fairly remunerated. It may be better for the agent to go on a fee-based basis.
Readers of this blog have grown apprehensive towards insurance products, and desperate Agents have to resort to rebates to entice clients to buy from them.
ReplyDeleteMust be very unlucky, so far haven't come across a sincere Agent that have our interests at heart. All of them are out to open our wallets, hope to meet one good Agent with a product that dun cheat our hard earned money. So, forced to throw out the bath water together with the baby for self protection.
Fundsupermart withdraw the rebate. In fact, it appears that it has altogether cease selling insurance by removing all references to insurance sales in its website.
ReplyDeleteAnyway, no commission or no load insurance products will be sold by next year at the latest. The question is how many more products will be added to the list of products already identified like term, wholelife, endowment, health insurance etc...the list should include ILPs , regular ILPs, limited pay endwoment .
ReplyDeleteThe agents must realise why MAS is introducing the direct channel. It is because the insurance agents are not providing advice or rubbish advice. Also there are people who don't need advice...these people should not pay the huge commission which eats into the return and coverage and make insurance very expensive.
There are also a group which receives rubbish advice and for this group they are encouraged to seek second opinion or MAS should make seeking second opinion compulsory.
Also the web aggregator to be set by MAS and LIA is to help buyers to make comparison of the products before buying.
Kudos to FAIR for their recomendations. This should level the playing field and ensure the public will get objective and fair dealing. This should weed out the unqualified insurance salesmen. The right number of financial advisers should be reduced to about 6 thousands. They must be qualified in finance, competent and honest so that they can put the interest of consumers first and give fair dealing.