“What do you do for living?”, someone asks me. I answer,” I handle people’s financial matters.” Most people will respond that I am an insurance agent, or unit trust agent. This might be the common “reputation” of the financial industry in Malaysia. I have encountered this many times. I tried not to explain the difference. But it really deserves a good explanation to clear this misconception.
Imagine you are sick. You visit the doctor. After taking your temperature, examining the rhythm of your heart beat, etc … then he gives you a prescription. So you bought the medicine. Most of the time it is the doctors themselves who sell you the medicine.
Similarly, you might buy a financial product after the financial consultant provide you a financial health check. A really decent financial consultant will help to diagnose your financial problem. Then he will present you a prescription : -a financial plan (retirement plan, education plan etc). Finally you buy the financial product: – unit trust funds, insurance, will etc. Be fair. If your insurance agent provide you the proper financial planning process and solution, you should consider him a consultant indeed.
If you say that he is merely a salesperson, you should really regard the doctor as a medicine seller as well.
2 replies to "Diagnose before prescribe: Consultant vs Agent"
hi, i’m jeffri.i’m a fan of your blog. i got 1 question for u. nowadays many insurance company introduced i.l.p. in the market. but why, along the way the charges keep increasing and unbelievebly enpensive. and why they still selling it?
Hi Jeffri,
Thanks for reading this blog. The main reasons ILP is selling like hot cake are:
1. It is cheap for younger folks
2. It provide really comprehensive coverage – health card, dread disease, hospitalization income etc .. you name it .. most of those benefits can be bundled into an ILP
3. It is transparent – policy holder sees the charges and also how the investment is doing.
4. It is flexible – policy holder can change premium, protection, investment at any point of time during the enforcement of the policy
I think reason No.1 is the strongest point. Consumers want a lot of benefits, but are not willing to pay higher premium.