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Newbie Guide: How to Find a Good Agent for Investment & Insurance?

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Old 12-07-2010, 04:58 PM   #46
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When you change shield plan note that it is subjected to underwriting. This may not be a wise move especially if your parents have some existing medical conditions. Whenever possible make sure the insurer accept your shield plan as a "takeover" case as opposed to "new" case. Usually for "takeover" it means that the insurer will cover whatever the previous insurer covers and includes pre-existing condition (if any).

I think your IFA friend is quite honest and ethical. Yes Disability Income is very important especially for young people and it is dirt cheap too. Only GE and Aviva has such products.
Ok.. my parents no previous health conditions.. so shld be ok.
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Old 15-07-2010, 11:28 AM   #47
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I take a look at finexis website. Some of them are really amazing, can achieve MDRT in 5 mths. Most of the financial consultants I talk to tell me that need to work for 1 to 2 yrs before the income is more steady due to renewals. If you can get MDRT in 5 mths, I wonder what products they are selling?
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Old 24-07-2010, 11:16 PM   #48
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upppzzzzzzzzzzzzz
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Old 25-07-2010, 03:46 AM   #49
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Thanks TS for this informative thread! I'm still a newbie at all these, so the summaries were useful.

I'm 25 yrs old and have a whole life policy (limited pay), but in future I'm only going to buy term to increase my coverage even further. Simple reason being costly premiums. I'm also going to upgrade my Incomeshield plan to the Enhanced one with assist rider plus get a disability income plan.

This is on top of my early payout critical illness and personal accident plan. Anyone thinks a hospitalisation income plan is useful as well? I don't know if I'm over-buying but I have a strong family history of serious diseases, so I want to be adequately covered. And well.. life is so unpredictable.

I've always had my doubts on ILP as well, think its better to do invest seperately. My 6 months emergency savings are in place, and I have some spare cash each month to park into funds/bonds etc. I'm not too investment savvy and while I have read up on the different instruments, I don't know how to start.. and this is where a good IFA would make a difference. If I can find one!

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Old 25-07-2010, 09:34 AM   #50
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Just a word of advice to those who wants to invest:

If you want to invest, you shld have an adequate knowledge of what you investing into. And all investment carry risks so you must have an idea of how much loss you can take but from what I know, most novice investors get excited when they see a gain but get really emotional when they start seeing loss and make silly decisions. For eg: If you invest in $5000 buying a certain share, then the paper value drop to half and you dun panic. Then it's quite suitable for you to invest.
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Old 29-07-2010, 11:48 AM   #51
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Great work Rommie! Guess most of us are Tan Kin Lian followers?

Can you imagine an ILP having an effect of deduction more than 50% of the total savings?
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Old 29-07-2010, 12:04 PM   #52
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Great work Rommie! Guess most of us are Tan Kin Lian followers?

Can you imagine an ILP having an effect of deduction more than 50% of the total savings?
Cheers to Rommie!!

Can you explain the meaning of effect of deduction?
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Old 29-07-2010, 03:18 PM   #53
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Cheers to Rommie!!

Can you explain the meaning of effect of deduction?
Tan Kin Lian explained it pretty well in his article which can be found here.
http://tankinlian.com/Ask.aspx

I suggest everyone to read ALL of the articles.
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Old 30-07-2010, 03:36 AM   #54
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Hahaha... I'm a bit late but came across last week's Straits Times article on how Finexis is involved in the "volume bonus" thingy. No surprise, in my original thread, I already cautioned everyone to avoid Finexis and finally it seems that there is proof that they are a really bad IFA company.



Insurer fumes over policy’s high lapse rate
Straits Times Singapore, 24 Jul, 2010, Saturday
After taking ‘free’ first-year cover, many AXA customers dropped out
By Lorna Tan, Senior Correspondent


INSURER AXA Life is seeing red after one of its distributors offered free insurance cover for the first year as a gimmick to attract customers.
With no premiums to pay for a year, many signed up. The problem is that customers did not renew the policies once the first free year ended.
But in the meantime AXA paid the distributor, financial advice firm Finexis, millions of dollars in sales commissions and bonuses for marketing the product.
Now, AXA is trying to claw back more than $7 million of this money, according to market sources.
Amid the dispute, AXA’s Singapore chief executive Gilbert Pak resigned with immediate effect on Thursday. He had been at the insurer since October 2008. According to AXA, Mr Pak cited personal reasons for his departure.
The product sold, FutureProtector, is a term insurance plan that provides cover in the event of death or total and permanent disability for a set period ranging from five to more than 15 years.
In a bid to boost sales, Finexis, which has about 500 advisers, last year effectively gave away the product for free by marketing it at steep discounts of up to 100 per cent off first-year premiums.
Sources say the discounts have dropped to 50 per cent since April.
Despite the huge discounts, the transactions were still profitable to Finexis, as the substantial sales attracted millions of dollars in commissions and volume bonuses from AXA.
However, the plan backfired when the aggressive selling led to a high lapse rate once the first year was up.
Industry players are concerned over whether proper ‘needs-based selling’ was carried out to ensure that such products matched customers’ financial needs.
Life Insurance Association (LIA) president Tan Hak Leh said while there is no specific regulation on commissions and discounts, the LIA does not condone the use of these kind of rebates as an inducement or basis for a purchase.
Both LIA and the Monetary Authority of Singapore (MAS) said that advisers are required to have a reasonable basis for making investment product recommendations to customers.
‘They should not unduly influence the financial decisions of customers by offering rebates,’ said an MAS spokesman.
It is believed AXA’s previous deal with Finexis for the FutureProtector included a first-year commission of 117 per cent to advisers plus another level of commissions called volume bonus to the firm for satisfying sales quotas.
This means that even if FutureProtector was given free for the first year to customers, Finexis and its advisers could still earn some commission. One market observer said the first-year commission that can be earned from selling this product is now 93.6 per cent.
Sources say AXA is unhappy with the high policy lapse rate and is demanding that Finexis return the sales commissions plus volume bonuses.
When contacted, AXA said it does not disclose details of its commercial terms and business arrangements. It said an appropriate level of term insurance protection is the foundation of comprehensive financial plans, and wants to ensure customers’ needs are fully met.
However, Mr Patrick Lim, associate director at financial advice firm PromiseLand Independent said the FutureProtector is not even on its recommended product list, as the rates are not competitive when compared to similar products.
For instance, Mr Lim said, for a sum assured of $500,000, the annual premium imposed by FutureProtector for a male, non-smoker, aged 30, is $730. Rival insurers such as Aviva and TM Asia Life charge lower premiums of $470 and $515 respectively for similar cover. He said his firm does not give discounts.
MAS said it expects advisers to ensure that their investment product recommendations are needs-based and that they meet MAS’ guidelines on fair dealing.
It has also issued guidelines requiring financial advice firms to put in place systems and processes to monitor and deter improper switching activities. It will not hesitate to take appropriate regulatory action against financial institutions which contravene its requirements.
Mr Tan added that LIA members are committed to probe any policy lapse that could adversely affect policyholders’ interests, and to take appropriate action.
When policyholders ask to terminate a policy, LIA members are required to warn them of the disadvantages of doing so.




I wonder how many customers have been misold the AXA FutureProtector... but luckily I don't think consumers were hurt bad since it was a no-premium product (wah... I think first time the consumer don't kenna but the company get into trouble!). This incident just goes to show that being an IFA does not instantly mean being trustworthy, and even the "independent" part of the IFA does have its degree of "tied-ness" for some IFA firms like Finexis. I wonder if their MDRT figures will drop this year?

Footnote: MDRT = Insurance agent who earns **** load of commission for the year.

Last edited by Rommie2k6; 30-07-2010 at 03:40 AM..
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Old 30-07-2010, 08:06 AM   #55
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People always think the being independent means pro-consumer. This case shows that they are not truly independent and dun treat all their products equally. So today, whether you are buying from a tied agent or IFA, I believe it depends very much on the consultant serving you.

Btw, the consumers does not lose anything in the finexis case cos they never even pay anything. AXA seems to be the biggest loser. I hope they really sue finexis until their pants drop. It's people like that who give insurance companies a BAD name.
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Old 30-07-2010, 09:26 AM   #56
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People always think the being independent means pro-consumer. This case shows that they are not truly independent and dun treat all their products equally. So today, whether you are buying from a tied agent or IFA, I believe it depends very much on the consultant serving you.

Btw, the consumers does not lose anything in the finexis case cos they never even pay anything. AXA seems to be the biggest loser. I hope they really sue finexis until their pants drop. It's people like that who give insurance companies a BAD name.
Tell me about it. I am so angry when I read the news. I am not sure how successful will the law suit goes, but I do hope that we can withdraw all our partnership with IFAs. I do hope that will happen one day, ASAP.
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Old 31-07-2010, 06:53 AM   #57
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I sometimes wonder why ppl idolised the title "independent" so much. It simply means the adviser has wider range of products to sell. The chances of misinterpretation could be in fact much higher.

Ultimately, it's the ethics of the adviser that matters, not how much companies he can represent.

Go back to basic. You won't go wrong.
While the ethics of the adviser is important and not all IFA are good, a tied agent is confirmed to be unethical. If a tied agent was really ethical, he would be an IFA. Why? Because there will be some products that he is selling that is not as good as competitor products. So unless the tied agent is willing to forgo his commission and tell his client to go source from another company, one can be sure that tied agents can never have the best interest of the consumer.

Nevertheless, this incident shows that IFA can be unethical salespeople (as I pointed out at the very beginning of this post).

As I mentioned earlier, a good and ethical agent will be an IFA, but not all IFAs are good and ethical.

Last edited by Rommie2k6; 31-07-2010 at 06:57 AM..
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Old 31-07-2010, 06:56 AM   #58
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Btw, the consumers does not lose anything in the finexis case cos they never even pay anything. AXA seems to be the biggest loser. I hope they really sue finexis until their pants drop. It's people like that who give insurance companies a BAD name.
I blame it equally on AXA stupidity. Wasn't there a clause in their contract with finexis to claw back bonuses if the client drop the insurance after the 1st year? If there was, then no need to argue, cause the ruling will most likely favor AXA. If there wasn't then AXA is PLAIN STUPID... come up with a product and give it free to consumers for one year and expect a high retention rate? Oh please...
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Old 31-07-2010, 11:13 AM   #59
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While the ethics of the adviser is important and not all IFA are good, a tied agent is confirmed to be unethical. If a tied agent was really ethical, he would be an IFA. Why? Because there will be some products that he is selling that is not as good as competitor products. So unless the tied agent is willing to forgo his commission and tell his client to go source from another company, one can be sure that tied agents can never have the best interest of the consumer.

Nevertheless, this incident shows that IFA can be unethical salespeople (as I pointed out at the very beginning of this post).

As I mentioned earlier, a good and ethical agent will be an IFA, but not all IFAs are good and ethical.
I do feel that your opinion towards tied agents are very biased. Why cant tied agents be ethical too? Just because they represent only one company therefore they are unethical? I believe 'ethical' is not something measurable, but is from something within the adviser.
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Old 31-07-2010, 04:59 PM   #60
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I do feel that your opinion towards tied agents are very biased. Why cant tied agents be ethical too? Just because they represent only one company therefore they are unethical? I believe 'ethical' is not something measurable, but is from something within the adviser.
If you are a doctor and you only earn money through selling medicine (no consultation fees) and you can only sell medicine from one drug company... do you not see the problem there?

What if the medication you sell is not the best or most cost-effective amongst its competitors?

What do you do then? Do you sell the medicine to earn money knowing that your patient is probably better off taking medicine from another competitor brand that you do not sell? If you do, then your patient will either be taking a lousy medicine or paying more than what is required since he can get alternatives elsewhere for cheaper prices.

This analogy just describes the problems with tied agents. No tied agent can claim to be truly ethical because by doing so he will probably not earn enough money as he will be directing customers to other company's agents for cases when he knows that his company's products are no good.


So please... show me proof that a tied insurance agent can be ethical. Does he fulfill the following conditions:
1) Have good product knowledge of his company's product?
2) Have good product knowledge of competitor's product (at least 2/3 of competitor products)? If he does, where does he get it from since he does not have access to competitor's material?
3) Compares the products that he sells with competitor products and then recommend client the best option even if it means losing his commission by asking the client to go somewhere else to purchase stuff?
4) Knows about certain insurance types that his company does not sell but is beneficial to the client, and will recommend client to go source for it?

Last edited by Rommie2k6; 31-07-2010 at 05:03 PM..
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