The Agents

We have read news over the years on the unethical practices of insurance agents or financial planners. Like every industries in the economic system, there are bound to have blacksheeps among the good ones.

This article is about the unethical “professionals”.

Lorna Tan, Senior Finance Correspondent from the Straits Times, was probably the most hated during the times of AIA’S Critical Year issues in 2003. I could hear AIA agents cursing her openly in public for the articles she wrote which somehow spoilt their businesses.

The professionalism and ethics of our agents are questionable. Unscrupulous agents will do anything they can to meet their monthly targets (the minimum set by AIA was 1 case per month though it may varies among the Agencies), or perhaps higher career targets like Premier Agent, MDC or MDRT, and as for Centurion…unethical practises are unlikely to bring them to that level.

The practices

You may have notice advertisements in The Newpaper with headings like “Do you need more cash? Please call xxxxxxxx”, “Fast cash?” etc..some of these could have been put up by others though commonly used by insurance agents.

All you need to do is to bring down your latest CPF statement for your “appointment” with the advertiser a.k.a the agent not limiting to AIA agents in this case. The agent will then checked the balance in your CPF statement and proposed to invest your CPF monies in their ILPs, the agent will take a cut of 3% on ILP, meaning a $45,000 CPF investment will yield the agent a commission payout of $1,350 and that’s pretty good money. The agent will then part a portion of their money to you as reward (that’s why the tagline “Do you need more cash?). Use your CPF to exchange for cold hard cash.

Theoretically speaking, you have nothing to lose in this transaction since your CPF is invested to make more money and at the same time you are paid cash by the agent for your investment (only after the application has been approved by the Company).

Cons: Who cares about how your CPF investments performed after all you have already collected your money, any loses are just parts of the market cycle and fund’s performance.

The agent will pay your premiums

45% payout in commission for the sale of Whole Life policy is really lucrative. If you were to pay $300 per month for your premium, the agent gets a cut of 45% which amounted to $135. Should you choose to pay annual premium instead, say $4,000 per annum, 45% will amounted to $1,800.

The agent takes $1,800 (yearly premium) for that sale or $405 (3 months premium). That is not too bad for a deal.

The desperate agent who needs to hit his target or to earn his income is willing to part some of his money for those reasons.

The agent will take all your monies

Another unethical practice by the agents, again not limiting to AIA agents, is to ask a passer-by if he has any CPF, this is a direct approach commonly used years back (not sure if this is still one of the favorites now).

Using the CPF interest rates as comparison to the returns on ILPs, creating a big contrast in future income, though this is not unethical since the customer has to be educated and not everyone of them are finance savvy, but the closing of the deal isn’t ethical. Using top performing funds, the agent brings along his fund fact sheets which show the graph and trend movement of his hot funds, he could impress the customer with the growth of these funds, citing reasons like the fund has never gone down since the day of it’s inception, as for which fund, you have to find out yourself.

Selling without the proper procedure of Financial Needs Analysis or completing the PFR, the agent is ready to sell as opposed to the Financial Advisers Act, Chapter 110 Act 27, in short FAA.

Experienced agents will be able to close on the spot.

Interested investor will be brought directly to the CPF board near them (they usually canvas near the CPF board, a spot outside the train station but walkable distance to the CPF board.) to print their 15 months statements.

After a check on the statements, the agent will proposed to use all the CPF funds from Ordinary accounts and Special accounts for investment. The most ridiculous incidence I have came across happened to a man in his mid forties, he was told to invest but doesn’t know how much he should, he left it to his agent to decide. He was told to sign the application forms without much questioning, but the time he found (when he went to the CPF board again to check his statement), he was left with slightly more than $1 in his CPF accounts. The agent took everything. Like many others, he was closed on the spot.

Some clever agents use a nearby printing/copying centre which provide facsmile service, they are able to get their colleagues in the office to fax over the sales illustration without having to travel back to the office (this is useful to them in case the customer changes his mind).

A cunning customer may ask for rebates in return but the occurrences are much lower.

Next month

Closed a deal, got a new customer but the agent will not submit his application. This practise has a lot of limitations and will apply to a few situations only.

The agent has hit his quota for the month and it’s just a few days before the cut off date, with a few extra cases on his hands, he has the ball in his court. The agent will wait for the new window before submitting his cases; in that case it will be easier for him to hit the upcoming quota and he kick starts the month will a part of quota fulfilled.

But that’s risk taking, should the client involves in an accident or situation whereby he will to claim from his policy. There is no record at the HQ reflecting his policy, either the agent tried to squeeze that policy in immediately, but he will be queried about the delay, or the he tried making excuses to the client to avoid making claims for him, the client may becomes furious and lodge a complaint to the Company, the agent will be queried for that.

I have written enough, be careful of unethical and unprofessional agents, but there are plenty of good ones around, shop around, compare not only the policy but also the services of the agent who wants to serve you.

Ex-FSC

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While most industries have been affected by the development of new technologies, the real estate industry has been turned on its head thanks to the introduction of new technologies.

This was once a very personal business where referrals could make or break an agent’s career. A client would be dependent on their agent for information about property values, market trends, and current inventory available in their local market. If a client had a question for his agent, he would have to leave a message at the agent’s office and wait around for a reply. Depending on the number of other clients the agent had, the client could be kept waiting for a very long time.

This waiting game could be a very frustrating experience for proactive buyers and sellers who wanted to be in the know when it comes to handling the biggest investment of their lives. Fortunately, new technology has made the real estate industry much more accessible to the average person.

Cellular phones have had a huge impact on the real estate industry. Rather than sitting around playing phone tag with your agent, you can now reach them directly, and leave a message where they will be sure to get it. Communications are sped up and made more effective, meaning that much less time is wasted, and misunderstandings are less likely to occur.

Another benefit of the cell phone is that real estate agents are always in touch with their offices as well as with other agents. This means that they are on top of local market activities such as when a hot new property enters the market. Buyers who want to make an offer on a home can also get their bids on the table as quick as possible. The real estate market is always in flux, and cell phones enable agents and clients to roll better with the punches.

The internet has changed the way buyers, sellers, and realtors do business. Internet search technology is continually improving, making it easier for searchers to find relevant information in a short amount of time.

Buyers can search online MLS databases to view homes from all around the country. Sellers can have their homes featured on their agent’s homepage as well as on online databases. This has been an excellent development for clients because they can see examples of what they like, what price ranges are out there, and the availability of homes in their market area.

Some argue that because clients are able to locate properties on the internet, that real estate agents’ value will decrease. What is important to keep in mind is the fact that real estate agents provide a much greater service than simply providing a list of available properties on the market. While you may be able to find homes on the internet on your own, not every available property will be on all of the databases. Your agent will have inside info and can pare down the house search for you. They also navigate the many other issues that are involve with buying or selling a home. The internet has not changed the need for good quality agents in the least.

Blogging is a great tool for real estate agents. With such a focus on online technologies, the real estate industry can lose some of the personal interaction that was once such an integral part of the industry. Blogging can change that. By writing a blog for their websites, realtors are able to share their opinions, prompt discussions, and show a bit of their personality. This can be invaluable in showing potential clients why they should hire you. Also, it is of benefit for you personally, as you are able to express yourself and network with other real estate professionals.

While some people believed that the internet was going to spell the end for real estate agents, this has not come to fruition. In fact, the real estate industry is continuing to thrive. For agents who are willing to go with the flow and adjust to the changing technologies, both clients and agents can benefit.