Thursday, October 01, 2009

Book: Bad experience on financial products

Someone suggested that I compile a book to show the bad experience on financial products. This has to be contributed by many individuals in Singapore.

If you wish to share your story, please write it below. I need you name, telephone and e-mail to contact you for verification, but your personal identity will not be disclosed in the book.

I will also edit your story - so you do not need to worry about your writing. If there is sufficient stories of interest to others, I will publish it in soft copy.

Click here to share your personal story.

13 comments:

Anonymous said...

The title of the book or chapter should read,"What the insurance agents are hiding from you" or "How the insurance agents con you into buying their inferior products" or "what the insurance agents don't want to tell you" or"How the company and their agents collude to con you"
and maybe last one is " How MAS taichi the issues to FEDREC".

Tan Kin Lian said...

I have only 1 story. Too many people don't want to take the trouble to write and share their story.

Anonymous said...

It sounds like there's only negativity all around regarding anything financial and now, coming out a book on negative examples.

I would rather prefer to hear of success stories ie. of people who have done it right.

All these negative examples make me feel I shouldn't do anything at all.

Tan Kin Lian said...

To 11:37 AM
There is no need for your book, as the "good stories of financial products" are being told by more than 20,000 financial advisers (except that their recommendations are usually not honest and not true).

So a book of "negativity" is required to tell the consumers about the other side, so that they can balance against what they were told by the advisers who are driven by commission on the sale of the products.
The positive side is: go to advisers and pay them a fee for the time spent to give the advice.

Tan Kin Lian said...

Many people have written to me in the past to share their negative experience on financial products.

I invite them to write and post their experience in this survey. I do not keep a record of these past examples, so I need you to tell your story again.

Yong Qing said...

Hi. I think you may want to repost a new entry that you have received one story so far in the blog. And that you don't have records of the past examples. People may not read the comments area.

Keep up the good work :)

Best Regards
Fan of the blog

Anonymous said...

People need to be warned of the modus operandi of insurance agents and the companies so that they can avoid these unscrupulous agents otherwise they will become victims.
Just like the police warn how to look for telltales signs of theives and robbers hte book will identify the ruse of the ruse of the insurance agents. This helps consumers. Don't you think it is good?

Vincent Sear said...

I think that we should look at banks, insurance companies, agents and brokers in perspective. They're not charities or social workers. They may sell expensive products, but as long as they disclose the costs fully, it's up to the clients to decide to buy or not.

If indeed there's cheating or misrepresenation, it can happen in any industry, not necessary just financial sector.

A Rolex watch is on showcase at price tag of $10,000. If one's willing to buy it, for precise engineering, for prestige or for whatever purpose, would one question the base cost and commission. I can quite confidentally say, the retail markup is about 60 to 70%.

But then a Rolex watch is a luxury, not a financially planning vehicle unless one intends to pawn it off later in emergency.

That's why the financial products are so price, cost and returns sensitive. Because the purpose of buying it is not to wear it for show, it's to get something out of it.

In the high interest rates environment from the 70s to the 90s before the Asian currency crisis, with yields averaging about 8% annually, there was no problem of paying high commission to agents as well as high returns to policyholders and investors.

That's also why participating policies were introduced and became popular, because there was demand to participate in the high yields on top of simple term life insurance.

However, in today's interest rate environment, to sustain that kind of high commission is getting very challenging. Agents who work without salaries can't survive without upfront commission. Even for term policies, agent commission is uploaded upfront.

Insurance companies, banks and financial institutions in general, should look at new ways of designing products and career paths for their staff, agents and clients in light of the new environment, not sticking to the old model that proved profitable then.

Clients should also see the upward ceiling on performance achievable by the company and the downward floor of cost and remuneration to train and retain an agent. Times change, and all parties should change with the times.

Anonymous said...

Commission should be removed from all insurance products and replaced by fees. This is to preventing agents from pushing and peddling products with high commission to the detriment of the customers. In almost all cases the products are not suitable but because they give high commission to agents they push them without considering the interest and needs of the clients.
Par products are suitable for the rich who don't need them but they buy to humour their agent friends. They can drop dead and their dependents don't suffer or contracted a dread disease they are able to pay the bills.Yes agents can anyhow sell to these people.
But the poor, for goodness sake, they need the agents' help badly but often the easiest victims of insurance agents.No wonder , the poor get poorer and the rich get richer.

Anonymous said...

Vincent,

Times are tough and agents work without salaries surviving only on comissions. Does it justify hoodwinking the clients? Times are tough for everyone not only for insurance agents.

I am thankful for this blog. I am now made aware that unscrupulous agents are preying on the poor masses and make them even poorer.

Vincent Sear said...

I'm not condoning agents hoodwinking their clients. Times are tough, still got to be honest. I'm saying companies and top executives should work out better ways.

Ghim Moh Resident said...

Hi,

I think this book should tell about the reality of financial products so that people after reading it can better decide if that financial product is a good one or not.

Jason Zheng said...

Hi,

I think it will be good if you can add in comparison for some financial products. E.g, if you invest in funds from an insurance company, the upfront and recurring costs are usually quite high (5% upfront, 1% recurring). Some places require just 1% upfront and 0.5% recurring.

Additionally, I feel that the commission model is the main issue in the industry. Given a choice to seel a product which is more beneficial to the client, or to sell one which earns more commission, its obvious which product will the financial advisor market to his client. With such a model, its hard to expect financial advisor to give any decent advise.

Another flaw; A lot of people joined as financial advisor for the main purpose of earning more money. Since their goal is to earn more money, we can't expect them to gives proper advise as compared to selling products which earns them more commission.

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