One of my clients gave me hell today. The area of conflict is the commission that I get. Apparently she has this idea that if she goes directly to the insurer to get the policy, she could get the product at a cheaper price (as she thought she don't have to pay the commission since she by-passed me). I told her that it is not true. Even if she decides to DIY (Do-It-Yourself), she will still have to pay the same premiums. Worst still, in times of claim, she would have to DIY as well.
This incident reveals the naviety of consumers. So you think you go to a buffet, help yourself to the food (because the waiter/waitress do not serve you), and then they'll charge you cheaper? So you think that by going to Mac's and becoming the waiter/waitress yourself (because YOU serve yourself the food), you are going to get a discount? Haha. No. On the contrary, whatever the corporation saves from the intermediary, they keep it for themselves. So you think that I***A really pass you the savings by having you put the furniture together yourself? Don't you think I**A should PAY you instead for being the delivery-cum-installation man? How much is his effort worth? Since you are taking his job, why aren't you paid for it? So don't think that one can do everything yourself. Why don't you try to cook for yourself? Is it edible? How about make a shirt? Is it wearable? The best would be if you can built the house yourself. Then you can by-pass the property developers and save yourself a million dollars.
So this is the problem. People think that by buying their own insurance they can save the money. This is only the short-sighted perspective. Insurance consist of 2 parts - the buying and the claim. Maybe you can DIY the purchasing part. But to DIY the claims part? That's sheer insanity. Imagine yourself lying on the hospital bed, and you have to call up the insurer, get the claim forms, make sense of it, fill it in, send it to them and wait for them to mail you the cheque. If there are any disputes you have to settle it. Fantastic. Well at least you are still able to do all that. Imagine a death claim. How do you suppose you are going to call up the insurer to process the claim when you are lying dead in the coffin? Maybe you can pay a visit to your relatives in a dream and tell them where you've buried your fortune. This is what the commission is partly for. We get paid to clear the mess and set everything in order when you are incapacitated and can't make that happen. If you insist on self-service then, sure. By all means. Literally.
This incident reveals the naviety of consumers. So you think you go to a buffet, help yourself to the food (because the waiter/waitress do not serve you), and then they'll charge you cheaper? So you think that by going to Mac's and becoming the waiter/waitress yourself (because YOU serve yourself the food), you are going to get a discount? Haha. No. On the contrary, whatever the corporation saves from the intermediary, they keep it for themselves. So you think that I***A really pass you the savings by having you put the furniture together yourself? Don't you think I**A should PAY you instead for being the delivery-cum-installation man? How much is his effort worth? Since you are taking his job, why aren't you paid for it? So don't think that one can do everything yourself. Why don't you try to cook for yourself? Is it edible? How about make a shirt? Is it wearable? The best would be if you can built the house yourself. Then you can by-pass the property developers and save yourself a million dollars.
So this is the problem. People think that by buying their own insurance they can save the money. This is only the short-sighted perspective. Insurance consist of 2 parts - the buying and the claim. Maybe you can DIY the purchasing part. But to DIY the claims part? That's sheer insanity. Imagine yourself lying on the hospital bed, and you have to call up the insurer, get the claim forms, make sense of it, fill it in, send it to them and wait for them to mail you the cheque. If there are any disputes you have to settle it. Fantastic. Well at least you are still able to do all that. Imagine a death claim. How do you suppose you are going to call up the insurer to process the claim when you are lying dead in the coffin? Maybe you can pay a visit to your relatives in a dream and tell them where you've buried your fortune. This is what the commission is partly for. We get paid to clear the mess and set everything in order when you are incapacitated and can't make that happen. If you insist on self-service then, sure. By all means. Literally.
7 comments:
While I can understand where you are coming from (I also work in the service line and sometimes have to face crap from unreasonable people), I'm not entirely sure that the tone you have chosen to adopt in this post will necessarily make you look good in the process of explaining your stand.
I personally fall into the camp where I have no issues paying reasonable sums of money for good and useful service. Nonetheless it would not be a surprise to me that there are others who are the opposite, esp in a society as materialistic as ours.
But this is something I foresee you will encounter not uncommonly in a line of work such as yours, and it would definitely be good to learn how to handle such thorny cases with ease - eg. by not taking up their case and sparing yourself the agony. :)
Think it is not entirely true in practice that the original adviser will be there in times of claim. Death and retirement would mean the adviser will not be there to help the claim. Also if the adviser resigns, he cannot service the policy unless his firm permit absolute vesting like what some IFA firms are doing.
The agony you face is because you rely on commissions to earn a living. If you get out of this reliance on commissions, you will be a happy person.
From an IFA.
Good post, I'm quite agreeable with you that it would be very weird to DIY your own insurance plan. In case of anything, there is no one that can help you to fill up the claim.
I am the type who like to pay services that have values to me which will certainly save me time and effort. Especially on thing that I am not professionally good at.
One of the things I will DIY is my investment plan.
Calm down, sales/service line is like that.
Especially in sunny Singapore where the culture in general is "Ai Pi Ai Qi, even better if its free!"
Unlike in other developed countries where there is a "tipping culture". The delivery person, waiters, hotel staff, etc, it is perfectly normal to remunerate them for their service. There is mutual respect and understanding that the service is appreciated.
Whereas here it is more common to ask for discounts, cash back, undercutting, free gift, instead of the quality service one might offer.
Differentiate yourself. Spare yourself the agony, move on. Let them suffer from their own attitude.
In our line, it is a long term relationship, so we also have to be selective of clients some times. No point forcing your view on them and have a terrible time thereafter.
Hi Finarati
It could be a case that the client had the wrong information about getting a discount by going straight to the insurer.
Instead of putting her down for being "ignorant" and of course "giving you hell" which may be unfair as you did not cause her ignorance, perhaps you may want to ask her nicely why she thought that bypassing agents would get a better rate?
Her frustration may not be against you but the "system" so unfortunately because you are her agent she took it out on you as a representative of the insurer - which you are.
Perhaps it was unfair of her to "give you hell" but you may want to dig deeper to find out why she behaved the way she did before putting her down as being ignorant.
We are all ignorant of many things outside our own knowledge. Trying to understand people's views before judging them would help you grow in maturity as well.
Be well and prosper.
What make one think that FA is still working as FA or in the same compnay when one has to make claim. More likely, when one has to make claim, it will be DIY.
Ikea charged for delivery and installation. I paid for delivery and installation to set up a double decker bunk bed.
Dear all,
Thank you very much for hearing out my rantings, and I have gathered various valuable insights from your comments. One important advice is the ability to be there for the client. It is with much regret to acknowledge that some clients will be 'orphaned' and left to fend for themselves. However, it does not mean that the advisor has to stay on in the line to continue the servicing. Mr Tan is no longer with the company, but he continues to assist others by blogging his views.
My role is the claim process is to assist those who cannot help themselves, and for those who wish to self-service, to equip them with the necessary information to do so. A sustainable relationship is one that is symbiotic. I will help as much as I can and for as long as I can. Help me to help you.
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