“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.


Personal finance author and trainer

    2 replies to "Diagnose before prescribe: Consultant vs Agent"

    • mohd.jeffri

      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?

      • kclau

        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.

Leave a Reply

Your email address will not be published.