Thursday, August 13, 2015

Conflicted remuneration

When a life insurance agent or financial adviser sells you a financial product, the agent or adviser receives a handsome commission and is likely to be motivated by the commission. The buyer pays for the commission, but is not aware about it and does not know the amount (which may come as a shock to the buyer at a later date).
This is called "conflicted remuneration". It has been a big problem in the UK and Australia. Australia is still struggling with this issue. You can read and understand what the issue is, from this article by a consumer advocacy group.


Anonymous said...

How not to? Insurance agents are attracted to this industry because of big commission they can earn than in any other jobs. And only 'A' level qualification is required now. In the past only 4 'O' levels and before this probably primary school education was required only. Maybe if you have a mouth that can make sound and can lie you can join as financial advisers too. My gosh, financial advisers without a finance degree!!!!!!looking after people's financial life?
And now even PhD and doctors, lawyers, accountants etc etc are joining the industry because of the big money there which these people can't earn in their professions they were trained. They have NO restriction or professional code of ethics to abide or worry of any protocol to follow . They can say or do anything so long they bring in the sales to the company and even there is wrong the company can take care of them. They can now pound the streets to look for money or rather to look for victims to fleece. In their old jobs they can't. They can now even stand at Geylang to do the business.
How long to qualify for the license? It depends. You can qualify in 1 week, in 1 month or in days. What are the exams? Hahahaheeeeeee, those exams dogs and donkeys can pass too...tikam tikam until you pass and they will be "certified" as financial experts to make a living off the poor, idiotic, gullible, trusting Con sumers .
Putting the customers' interest first is the last thing in the insurance salesmen's mind.More correctly is putting the commission in their pockets first by selling only products whcih can earn them high commission. Have the public ever heard of term insurance from the insurance agents? Never, never never!!!!!!!Even their managers forbid them to mention term insurance. Term insurance is banned from their vocabulary.
The problem lies with the consumers too. They are idiots. They don't have anyone to help them and not even the regulator..MoneySense , financial literacy and all the crap public education help to certain extent only the regulator must still protect the consumers against the glib tongue conmen and women out there whose ONLY intention is to fleece them off their hard earned money.
MAS must ask this question "why do these people join the insurance industry? Is it to help the public to have a better future, to retire comfortably, to be adequately protected, to earn better return, to make their hard earned money work even harder?. The answer is NO!!NO!!!!!!From the CEO down to the salesmen it is to fleece the public off their money so that they live miserably and retire in the garbage dump.
Fair dealing outcome to the consumers? Never, ever if MAS doesn't intervene to correct this unfair dealing between the consumers on one side and the insurance agents and their companies on the other side. The consumers are always the losers.

Anonymous said...

If consumers want to know how they are being ripped off there is one article written by Yahoo about why you shouldn't be buying ILPs , especially regular ILPs.
Daily, many unwary consumers are being ripped off buying ILPs which being touted as better than whole life or endowment.
Well, nothing is good when the insurance agents say they are good. Be contrarian . What is bad for agents is good for you, believe me you.

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