Tan Kin Lian's Blog: An honest agent

Saturday, October 03, 2009

An honest agent

I asked my travel agent to recommend me a ticket to Paris or London. He obtained detailed quotes from three airlines. Two airlines quoted an economy fare of around $1,600. The third airline (which is of similar standing) quoted a fare of $1,000.

Although the agent earned a lower commission from the third airline, he brought the quote to my attention, so that I could consider it for my decision. He has to consider the interest of his client to build a long term relationship of trust.

9 comments:

Anonymous said...: Yes.Long term relationship and trust. These are the very hallmark of an excellent sales person.
People buy because of people, not products.Product is secondary. After some time, despite that fact that the sales person quoting higher, we will still buy. For the simple reason of trust and rapport.
It seems that many businesses do not want to spend time, energy and money to train.
Let it be.; October 03, 2009 10:13 AM
Anonymous said...: If it is an insurance agent he or she will hide the more expensive one.Conflict of interest.
Commission is the evil behind the unethical practices the insurance agents will do.
I heard MAS wants the insurers to remove commission from all future insurance products to follow UK and Australia and US.; October 03, 2009 10:39 AM
Wealth Journey said...: I used Zuji and Priceline for my air ticketing needs.
They have very competitive pricing against operators and show comparison(from cheapest to most expensive) across the different airlines.

For Hotels, I usually used Wotif.

You can try them too. So far, it has been hassle free for me as they have integrated their fulfilment process with the hotels,airlines seamlessly.; October 03, 2009 2:03 PM
Vincent Sear said...: The trouble with the insurance industry is the tied agency system. Tied agents couldn't offer other companies' products even if they know there're better or cheaper products from other companies. The situation is therefore very different than in the travel industry where agents and agencies fight to retain customer confidence and loyalty by recommending the best deal possible in the client's interest.

This problem has been somewhat relieved by the introduction of independent financial advisers (commonly referred to as brokers). However, the majority of agents are still tied agent to a single company because of the huge recruiment machinery of big companies that can't be matched by much smaller IFA firms.; October 03, 2009 2:55 PM
Vincent Sear said...: May I add, the nature of sales business is also very different between insurance and travel industry. In insurance, product availability is "open-ended", i.e. there's no such thing as "out-of-stock". In travel, there're limited numbers of airline seats and hotel rooms available. The agent doesn't need to worry about selling cheaper deals first at lower commission. When these are sold-out, the more expensive deals will sell itself when there's a need and no other alternative.

That's why, travel and ticketing agencies always tell customers, book as far in advance as possible for the best deals. If the traveller shows up at the airport last minute or walks into a hotel without booking, s/he'll most likely get the worst (highest) rates.; October 03, 2009 3:51 PM
Anonymous said...: The trouble is insurance agents don't tell the truth that the products are NOT suitable for their clients but for themselves. More often than not the term plan is most suitable becuase it adequately addresses the clients' needs and that is why they PEDDLE the wholelife products, justify the products and con the clients into buying.
So , it is not that there isn't a suitable product but because of conflict of interest.They sell the wholelife and endowment products like cure all snakeoil products.Whatever concerns the clients have the products are inevitably WL or endowment.Is there any difference bewteen them and the koyok man at Waterloo Street? The koyokman can harm you once and you suffer little loss but the insurance agents can cause disastrous consequences and most of the times the buyers don't even know until many years down the road and some even die with it and the problems passed to their dependents.That is why the insurance agents must be dealt with seriously and MAS must stringently apply the section 27 of the FAA and other provisions to regulate their activities.In US the insurance agents are the scumbags of society, spitted upon and to be avoided like plagues because they are salesmen and women , conmen and women and they con and DON"T advise on the needs of the clients.; October 03, 2009 4:55 PM
Tan Kin Lian said...: Travel is as complex as insurance, but the travel industry has simplified it through the use of computer networks, standardization, public education and market competition.

The insurance industry can learn from the travel industry by embracing these approaches.; October 04, 2009 6:09 AM
Vincent Sear said...: The life insurance industry can start with taking a cue from the general insurance industry. General insurance sales have been mostly brokerage driven for decades before the introduction of independent financial advisers.

For the benefit of those unfamiliar with this, life and general insurance are 2 separate categories of business. Usually a life insurance company issues life policies only, a general insurance company issues general policies only, with the exception of 3 as far as I know, AIA/AIG, NTUC Income and AXA.

Life insurance agents wishing to sell general polices are required to pass another general insurance certification exam. After passing, they're allowed to sign up with their choice of up to 3 general insurance companies. However, agents of AIA, Income and AXA cannot sign up external general insurance agency contracts, and must sell inhouse policies. The other life insurance companies have no such restriction since they don't offer general insurance products for their agents to sell.

If the sales channels of both life and general insurance can be broadly merged, then the whole industry can see a more professional and cost-effective distribution channel network, benefitting all parties involved including the companies, the agents/brokers and the clients.; October 05, 2009 1:26 PM
Don Lim said...: Mr Tan:
I think you should give him a small tip. A good man is rewarded. As this news spread around it inspires and encourages more people to be good men.; October 13, 2009 2:29 AM