Money is a sensitive subject. People work for money, and ironically some work too hard that they fall sick and all the money that they earn goes to the medical bills. People fight over money; it can lead to big things like marital breakups, parents disowning their children, siblings dragging each other to court and even to the extend of murder.
Some might say that money is not everything. But the fact is, everything is money. Well, almost everything. And the very basis of me writing this blog is also to express my thoughts and fellings on money related matters. I shall highlight on commissions earned by agents.
I have always condemned conducts of agents who push products and hard sell for the sake of earning the commission. This time, I'm going to turn the table around.
There are some people (not all, SOME) out there who really think that when they buy a product, may it be insurance or unit trust, from an agent, they would lose out as the agent earns commission form their sales. These type of idiots will then ask for a "discount" or a kick back from the commission. And some agents will give in as "customers are always right", and in fear of losing the customer.
I know my clients are quality clients. Some even want to make sure that I'm taken care off when I do a sale. They understand the way I earn a living, and also understand the sales commission is for me to survive and continue to serve them in this business. My hats off to my all valued clients, but I'm hitting out to some kiasu idiots out there.
Whenever your agent does a sale, did he mention about profit sharing from the potential profits of your investment or potential claims from your insurance policy? If your agent really did that, then he is an idiot and you have all the right in the world to ask for a cut off his commission from the sales you gave him. Otherwise, you are just a brainless, cruel idiot.
Full time agents are mostly people who are committed in doing the business they are in right now. The took the risk and quit their full time jobs, and by being an agent they do not have fixed salary, overtime, medical benefits, and other fringe claims like entertainment, handphone and petrol allowance. Everything is on their own.
The calls and sms from their handphone to you, which you might just snub or rudely shout that you are busy...they pay the bills. The toll, parking and petrol for their cars...the company do not reimburse them. And yet you make them wait for hours when they turn up on time for the appointment that you've agreed upon. Or worse still, for all their time, effort and money spent, you just didn't bother to turn up and do not answer their calls subsequently. you feel proud because you "thought the bastard a lesson."
And when they bring you out for lunch, you order the most expensive food and drink on the menu as you feel that you deserved it.
If you feel that you've done any of the above, please stop it. Stop being an idiot. Not all agents are ripping customers off; many are genuinely good and provide excellent service. Give them a chance to make a living. When they attend training for personal or professional development, you will benefit from this too. But these trainings are not free of charge. When they present to you whatever reports or proposals, bear in mind of the overhead cost the agents bear...stationaries, papers, printer ink, internet bills etc. Every business related expenses, 100% out from their own pockets.
If you are a client, take a moment to ponder upon the size of your account and how much or how little he earns servicing your account to deserve such garbage treatment. Or if you are simply not interested, just say no. Why? Read my previous posting on "Just Say NO."
If you feel that your agent is doing a lousy job, tell him what do you really expect so he'll get the chance to improve. Don't go sabotaging him. Give him a chance, and if he doens't improve, you can always give your business to other deserving agents.
But if he is good, do spread the news to others. Your friends and families too deserve to have that excellent service. And by doing that, you are giving your agents a better foundation, a larger pool of clientele base to work with.
Now think this. If your agent have been serving you well, or have proven that he is trustworthy or have that fantastic positive value, what's stopping you from referring your family and friends to him? By doing that, you are actually making his life easier as he need not work so hard to source for other clients via cold leads. Your agent need to grow his clientele base to survive, otherwise he would need to start to look for a job and you'll end up losing a good agent. By making this easier for him, he would definately have more quality time to serve you better.
Agents are not pariah dogs. Work with them. Tell others if they are good. Let them earn whatever commission they are entitled to, and don't behave as if they owe you big time. It's a two way thingy, they have a role to play, but so do you. Mutual respect is desirable, but asking them to share their commission with you is as good as killing them slowly.
I have this particular client who once remarked to me that having 100 clients is a bit too handful and I would not be able to focus on servicing all of them. The way I see it, if I have clients who invest RM10 million in unit trust with me on a yearly basis, then 1 or 2 clients would be enough.
But unfortunately I don't have these type of high networth clients, or at least not yet , so instead of worrying that I would not be able to service him on a regular basis for his RM20,000.00 unit trust account he should be recommending me to his family and friends so that they too can invest RM20,000.00 with me. From all these RM20,000.00 combined, the sales commission would then ensure that I'll be able to service them continously.
14 February 2008
06 February 2008
Gong Xi Fa Chai
I would like to wish all readers of this blog Gong Xi Fa Chai. Have a happy, and prosperous Chinese New Year, blessed with prosperity, good health and great fortune.
Have an excellent long weekend break, and please be careful on the road. I will resume my posts with some excellent stuff in a few days time, topics you won't read anywhere else...the way I see it!
Have an excellent long weekend break, and please be careful on the road. I will resume my posts with some excellent stuff in a few days time, topics you won't read anywhere else...the way I see it!
01 February 2008
What's In A Name?
The word "agent" is a dirty word. Some unit trust/insurance agents feel disgusted when you call or refer to them "agent", and some naive people out there will freak out at the mere mention of the word "agent" because of their myopic and preset opinion that agents are out there to squeeze whatever money that they have...and do nothing else.
Well, the term agent simply refers to an individual who is tied up to a certain organisation, doing business and earning sales commission, representing the company in the capacity of an agent and not as an employee. Unlike employees who are "chosen" by the companies after satisfying criterias like education background, experience, expected salary level, etc, agents on the other hand, choose which company they want to be affiliated to and the joining condition is relatively simple, and an agent decides how much sales he would want to do. No obligation whatsoever, well, apart from achieving whatever minimum sales quota for maintence of contract.
Some people simply refuse to do business with unit trust/insurance agents due to the fact that almost any Tom, Dick and Harry can be an agent if the want to. In most cases, there are no quality control and background check whatsoever. A former convict may get rejected in his job applications to major organisations as a background check is usually done. Education and experience, as well as impression of competency during interview are the essentials before a company hires a staff. But to be an agent, well, almost anyone can be an agent whether it's unit trust, insurance, will writing or direct selling.
But not all agents are stupid, unethical and are in the business just because they are unable to secure employment. Some decide to be an agent because of the time flexibility, unlimited income potential and the passion for the business that they are in. And to think that unit trust and insurance agents are not trustworthy and are out just for the sales; I would say that dealing with the people working in the bank are far worse as they are target driven. Most agents will value their clients as sourcing for clients are not an easy task, but in banks the salesperson have got a long list of database. The customers are usually existing bank customers, a large pool of them, and their job is just to sell, sell and sell...for the biggest amount possible.
Just take a moment and think...how can a personalised service is possible when they may have hundreds of existing customers, and probably chasing for thousands more in order to meet their target? Top it up with all the meetings, paper work, reporting, trainings and all those crap. Do you really expect from them to to give you a personalise service if you just invested RM20,000 in unit rrust with them or bought a bancassurance product with a premium of RM200 a month? And about ethics, as if you have never heard about fraud cases in the banks. And their turnover are very high too. After thety leave the bank, what is left is just the physical and infrastructural aspect of the branch of the bank, plus a new face taken in as a replacement who would typically tell you "I dunno worrr....this one last time not I do one...."
Back to agents. Some are simply desperate to call themselves anything else but agents, that they really dig deep into their creative mind before printing their name/call/business card. A few years ago, many agents fancy to call themselves "Financial Planner." However, the regulators set some guidelines to restrict the abuse of the term "Financial Planner" and the creative mind start to spin again. Among the interesting ones that I've come across:
RFS Consultant - RFS stand for Retail Financial Services. It is usually used by insurance agents from a particular company. In their name card they will usually print their product offerings like investment link insurance, unit trust, trust and will writing and whatever that would make them look impressive.
Financial Consultant - Some really have the guts to print this on their card even thought they might know crap about mortgages, taxes, trust, distribution act and other areas apart from unit trust or insurance. Heck, even then, their knowledge about unit trust and/or insurance are crap at best!
Financial Adviser - Let me lay it down for unit trust agents first. Some prefer to use the term adviser than consultant, because consultant is a short form for "con and insult". But the way I see it, it's just another term "ikut citarasa" or some might say "ikut suka hati mak bapak". Makes no difference whatsoever as the job nature at the end of the day, after all the dust have settled down, is about doing sales. Not to sit down like a counsellor and do nothing but advise. Hipocrite! Some might say that they are advisers, distinctively because they claim that do do analysis and give the best solution to clients without favouring any particular companies...neutral in nature. Crap! At least in Malaysian context (as I'm not aware of how is it done elsewhere), as some UTMCs are having some distributing their funds through their exclusive channels only may it be via their agency or their employed staff. Well it can be done via this so-called "consortium" or any marriage of convenience you-scratch-my-back-I-scratch-your-back arrangements. And some advisers just look at things from a certain angle just to justify their arguments that their product is the best. So if consultant is "con and insult", adviser is "advise the client that I'm having the best product". Now insurance agents. Well, some insurance agents might use this term, but in the end it will still be a recommendation towards a product for their company as there is no such thing as an IUTA for insurance yet.
Risk Underwriter - Horror of horrors! I once saw this particular agent affiliated to the company that sponsors Manchester United using this title. at first I really thought that she is an underwriter, until I noticed her yahoo email address and her photo printed on her card.
The way I see it, agents do not need to pretend who someone they are not. Personally, I feel do not feel comfortable to be called an agent too, but the fact is I AM an agent and I'm not too overly concerned or sensitive if people call me an agent if I conduct my business in the best possible manner, without lies, deceit and manupulation. Then I take pride to call myself an agent!
Well, the term agent simply refers to an individual who is tied up to a certain organisation, doing business and earning sales commission, representing the company in the capacity of an agent and not as an employee. Unlike employees who are "chosen" by the companies after satisfying criterias like education background, experience, expected salary level, etc, agents on the other hand, choose which company they want to be affiliated to and the joining condition is relatively simple, and an agent decides how much sales he would want to do. No obligation whatsoever, well, apart from achieving whatever minimum sales quota for maintence of contract.
Some people simply refuse to do business with unit trust/insurance agents due to the fact that almost any Tom, Dick and Harry can be an agent if the want to. In most cases, there are no quality control and background check whatsoever. A former convict may get rejected in his job applications to major organisations as a background check is usually done. Education and experience, as well as impression of competency during interview are the essentials before a company hires a staff. But to be an agent, well, almost anyone can be an agent whether it's unit trust, insurance, will writing or direct selling.
But not all agents are stupid, unethical and are in the business just because they are unable to secure employment. Some decide to be an agent because of the time flexibility, unlimited income potential and the passion for the business that they are in. And to think that unit trust and insurance agents are not trustworthy and are out just for the sales; I would say that dealing with the people working in the bank are far worse as they are target driven. Most agents will value their clients as sourcing for clients are not an easy task, but in banks the salesperson have got a long list of database. The customers are usually existing bank customers, a large pool of them, and their job is just to sell, sell and sell...for the biggest amount possible.
Just take a moment and think...how can a personalised service is possible when they may have hundreds of existing customers, and probably chasing for thousands more in order to meet their target? Top it up with all the meetings, paper work, reporting, trainings and all those crap. Do you really expect from them to to give you a personalise service if you just invested RM20,000 in unit rrust with them or bought a bancassurance product with a premium of RM200 a month? And about ethics, as if you have never heard about fraud cases in the banks. And their turnover are very high too. After thety leave the bank, what is left is just the physical and infrastructural aspect of the branch of the bank, plus a new face taken in as a replacement who would typically tell you "I dunno worrr....this one last time not I do one...."
Back to agents. Some are simply desperate to call themselves anything else but agents, that they really dig deep into their creative mind before printing their name/call/business card. A few years ago, many agents fancy to call themselves "Financial Planner." However, the regulators set some guidelines to restrict the abuse of the term "Financial Planner" and the creative mind start to spin again. Among the interesting ones that I've come across:
RFS Consultant - RFS stand for Retail Financial Services. It is usually used by insurance agents from a particular company. In their name card they will usually print their product offerings like investment link insurance, unit trust, trust and will writing and whatever that would make them look impressive.
Financial Consultant - Some really have the guts to print this on their card even thought they might know crap about mortgages, taxes, trust, distribution act and other areas apart from unit trust or insurance. Heck, even then, their knowledge about unit trust and/or insurance are crap at best!
Financial Adviser - Let me lay it down for unit trust agents first. Some prefer to use the term adviser than consultant, because consultant is a short form for "con and insult". But the way I see it, it's just another term "ikut citarasa" or some might say "ikut suka hati mak bapak". Makes no difference whatsoever as the job nature at the end of the day, after all the dust have settled down, is about doing sales. Not to sit down like a counsellor and do nothing but advise. Hipocrite! Some might say that they are advisers, distinctively because they claim that do do analysis and give the best solution to clients without favouring any particular companies...neutral in nature. Crap! At least in Malaysian context (as I'm not aware of how is it done elsewhere), as some UTMCs are having some distributing their funds through their exclusive channels only may it be via their agency or their employed staff. Well it can be done via this so-called "consortium" or any marriage of convenience you-scratch-my-back-I-scratch-your-back arrangements. And some advisers just look at things from a certain angle just to justify their arguments that their product is the best. So if consultant is "con and insult", adviser is "advise the client that I'm having the best product". Now insurance agents. Well, some insurance agents might use this term, but in the end it will still be a recommendation towards a product for their company as there is no such thing as an IUTA for insurance yet.
Risk Underwriter - Horror of horrors! I once saw this particular agent affiliated to the company that sponsors Manchester United using this title. at first I really thought that she is an underwriter, until I noticed her yahoo email address and her photo printed on her card.
The way I see it, agents do not need to pretend who someone they are not. Personally, I feel do not feel comfortable to be called an agent too, but the fact is I AM an agent and I'm not too overly concerned or sensitive if people call me an agent if I conduct my business in the best possible manner, without lies, deceit and manupulation. Then I take pride to call myself an agent!
25 January 2008
Bila Nak Tukar Kereta?
One of the most common question that people ask me nowadays is "Bila nak tukar kereta?" This is because, the public have the perception that insurance/unit trust agents earn tonnes of money, and typically an agent would definately drive a Merc and BMW in matter of months.
This question actually come from a naive mind of a newbie agent, or just a general perception of the public. In business opportunity preview of insurance or unit trust agencies, these cars are used as a yardstick to dream of success. Apparently, if you are able to put an instalment for a Merc or BMW, and able to service the monthly instalment, you are successful. And more often than not, a lot of people come out from the preview breathing fire, aspiring to drive a BMW, Mercedez, Cayenne or whatever, in the shortest period.
Some agents who really made it are really proud to show off their car. A symbol of success, if I can do it, you can do it too! But I really pity those who I categorise as the wannabes. The pretentious people. Never mind how long their loan tenure, never mind if the downpayment is minimal, never mind if they can't afford the instalments or the maintainence and service. Never mind if in actual fact they really can't afford it. What is important is they live the moment, however fake and shortlived it may be.
Personally, I do not like people asking me this question. I find it rude, in fact. It is as if I make big bucks from their sales. As if there is nothing to be done after the sales is concluded. As if appointments are so easy to get, and getting clients are as easy as collecting garbage at a pasar malam site.
What people don't see is the hard work that agents put in. The rejections, the waiting game, the no-shows. The time and money spent for training and personal development. The cost incurred like petrol, parking, phone, stationary, and of course entertainment...even a simple appointment with a prospect at Starbucks cost an agent nothing less than RM30. 2 ice blended coffees is already close to RM30. Some prospects wouldn't settle for something less, right? And RM30 spent is also no guarantee of a sealed deal. Believe me, it's blood, sweat, frustration and tears. Not everyday is a Sunday, it's not like we lay on a bed of roses everytime.
Once a client told me "Wow...mesti banyak masyuk. Ramai customer." I just answered "Well, I would say that kalau ramai customer, that means tanggungjawab lebih besar. Bukan setakat masyuk banyak dan tukar kereta je...."
The way I see it, life as an agent is not as beautiful as what some people like to thing it to be, or some agents potray it to be. If it is so, then why wouldn't everyone take the challenge and be an agent? Then every Tom, Dick and Harry would be able to drive a Merc and BMW.
This question actually come from a naive mind of a newbie agent, or just a general perception of the public. In business opportunity preview of insurance or unit trust agencies, these cars are used as a yardstick to dream of success. Apparently, if you are able to put an instalment for a Merc or BMW, and able to service the monthly instalment, you are successful. And more often than not, a lot of people come out from the preview breathing fire, aspiring to drive a BMW, Mercedez, Cayenne or whatever, in the shortest period.
Some agents who really made it are really proud to show off their car. A symbol of success, if I can do it, you can do it too! But I really pity those who I categorise as the wannabes. The pretentious people. Never mind how long their loan tenure, never mind if the downpayment is minimal, never mind if they can't afford the instalments or the maintainence and service. Never mind if in actual fact they really can't afford it. What is important is they live the moment, however fake and shortlived it may be.
Personally, I do not like people asking me this question. I find it rude, in fact. It is as if I make big bucks from their sales. As if there is nothing to be done after the sales is concluded. As if appointments are so easy to get, and getting clients are as easy as collecting garbage at a pasar malam site.
What people don't see is the hard work that agents put in. The rejections, the waiting game, the no-shows. The time and money spent for training and personal development. The cost incurred like petrol, parking, phone, stationary, and of course entertainment...even a simple appointment with a prospect at Starbucks cost an agent nothing less than RM30. 2 ice blended coffees is already close to RM30. Some prospects wouldn't settle for something less, right? And RM30 spent is also no guarantee of a sealed deal. Believe me, it's blood, sweat, frustration and tears. Not everyday is a Sunday, it's not like we lay on a bed of roses everytime.
Once a client told me "Wow...mesti banyak masyuk. Ramai customer." I just answered "Well, I would say that kalau ramai customer, that means tanggungjawab lebih besar. Bukan setakat masyuk banyak dan tukar kereta je...."
The way I see it, life as an agent is not as beautiful as what some people like to thing it to be, or some agents potray it to be. If it is so, then why wouldn't everyone take the challenge and be an agent? Then every Tom, Dick and Harry would be able to drive a Merc and BMW.
24 January 2008
Switch Here, Switch There....Part 2
The past 1 1/2 week have been bad for the stock market. Triggered by some negative news and bad datas in the US, stocks market in Asia...in fact almost everywhere in the world, took And it's a bad time particularly for me too. Why? Because I'm irritated by the phone calls that I get.
I love receiving phone calls from my client. They are, in fact, the source of my bread and butter. But I just hate receiving phone calls from my peers in the unit trust industry. Or to be precise, my "friends" from the agency that I belong to.
First and foremost, I do not regard these people as my actual friends. There are too many opportunist out there, and being in this business I'd rather do the talking to existing and future clients. However, in the past I did use to have sharing sessions for rookies in the industry. I talked to them about fundamentals of the industry, as well as whatever is related to unit trust.
Soon I got tired of talking. Although I do not mind sharing, I just hate it when some smart ass develop some pre-set opinion and try to argue his stupid points to me just for me to say "yes".
Somehow, my opinion is much sought after by many rookie, and not so rookie agents. Being a veteran in the industry, all my readings, hardwork and experience really make the difference. It was all gained throughout a long period of time. However, in reality I need to be selfish, this is a dog-eat-dog world after all. But somehow, I can't resist giving out advise to agents, especially when I know they are doing things the wrong way. Unit trust agents can't treat unit trusts like some goreng pisang or some soft toy kinda thing. It is a knowledge based product, not that complicated, but definately not as simple as it seems.
In a bull market, these agents are gung-ho to sell. After all, the 1 year, 3 years and 5 years returns show fantastic returns. Whatever method goes, as long as the deal is done. The understanding on the subject matter, or rather the lack of it, is not an issue to some. An example of how shallow the understanding can be seen below, taken from http://www.irwan.biz/public-mutual-my-first-unit-trust/.
A check on FMUTM website delivered this:
I assume that they are the same person. I do not know this guy personally, and neither has he ever called me. But since he had the guts to post his name and offer his service to readers of the popular site, I might as well take him to illustrate my point.
Now where do I start? Ok...let's see from the "profit from 20-50% 1 year dividend" thing. Need I elaborate more? How did this assumption come about? And via dividend? I can understand that 90% of agents do not understand the difference between income distribution and dividend. But never mind that, it simply doesn't make sense; he must have been thought by his just-as-ignorant upline/mentor and believe me, there are many unit trust agents out there in the same mould, regardless from which company they come from.
Second, noticed that he called himself as a "Mutual Fund Agency Supervisor"? Well, in the company that he's tied to (of which he spelt the name wrongly), the level is the second tier from a 4 tier agency. At this level, he'd be able to recruit downlines, and earn overriding commission from their sales. But just imagine, the quality of knowledge that he'll pass on to his recruits, which in turn will go out and sell it to the public. Scary right?
And a check from the FMUTM website shows that be only obtained his PDUT license on 21 August 2007. Hardly 6 months in the business, and he is already in a position to recruit, train and mentor others despite his lack of knowledge. This is exactly the same issue I talked about when I listed down my wish list for 2008. There must be a proper mechanism that ensures only the right people can be accorded the rights to be promoted do recruitment in an agency structure, so that the quality can be controlled.
Back to the story. When the bulls are running, these agents act and talk like they are some kind of genius. And by stroke of luck, whatever fund they promote to clients do make returns. After all, this is just to be expected in a bull market.
But I've always cautioned them that good things do not last forever. Don't promise returns, but educate clients on how things go about and what it is all about. But many people have got the skill to filter out and only listen to things that they want to listen. Naturally, my piece of advise is often ignored. They prefer to challenge me on silly issues like whether the market is too high at KLCI 1400 level; and as if they want me to say yes to whatever crap they have in their head. As though they need my blessings.
So I decided to take a step backward, mind my own business, serve my clients and source for prospects because I know that these idiot agents will run like headless chicken the moment the stock market takes even a minor tumble.
And how true it turn out to be. But instead of sitting behind and enjoying myself, I am kept busy, having to answer calls from these idiots calling me for advise. Of which, the calls are often ignored. Why should I answer my phone, waste my time and phone battery and talk to them? When they conclude the sales, was I around? No. So how am I supposed to know what crap did they tell their clients? And expect me do do damage control when they enjoyed the sales commission. Did they offer a portion of their handsome commission to me? No. So why must I bother to speak to them? Or rather, why bother to even call me at all?
Somehow, yesterday one of them used a land line number which I did not recognise and naturally I answered. This idiot called to ask what have I done to my clients, whether I have switched their investments over to money market or bond fund in view of the declining market.
I was really annoyed with this idiot, so I just asked him, what if immediately after the switch there is a market rebound? So switch back to equities again? And what would happen after the switch the market consolidates again?
The movement of the stock market is something that nobody can predict. Ideally it is best to switch out from equity at its highest point, and to switch in when it reaches a low point. But my question is, how high is the highest and how low is the lowest? And who can predict the direction of the market tomorrow and day after?
Switching funds is an important process of unit trust investment, but definately not to be used in a misinformed market timing strategy by nit trust agents. The way I see it, agents who suggest clients switch here, switch there are going to bring your investments nowhere as they are incompetent and probably clueless themselves.
I love receiving phone calls from my client. They are, in fact, the source of my bread and butter. But I just hate receiving phone calls from my peers in the unit trust industry. Or to be precise, my "friends" from the agency that I belong to.
First and foremost, I do not regard these people as my actual friends. There are too many opportunist out there, and being in this business I'd rather do the talking to existing and future clients. However, in the past I did use to have sharing sessions for rookies in the industry. I talked to them about fundamentals of the industry, as well as whatever is related to unit trust.
Soon I got tired of talking. Although I do not mind sharing, I just hate it when some smart ass develop some pre-set opinion and try to argue his stupid points to me just for me to say "yes".
Somehow, my opinion is much sought after by many rookie, and not so rookie agents. Being a veteran in the industry, all my readings, hardwork and experience really make the difference. It was all gained throughout a long period of time. However, in reality I need to be selfish, this is a dog-eat-dog world after all. But somehow, I can't resist giving out advise to agents, especially when I know they are doing things the wrong way. Unit trust agents can't treat unit trusts like some goreng pisang or some soft toy kinda thing. It is a knowledge based product, not that complicated, but definately not as simple as it seems.
In a bull market, these agents are gung-ho to sell. After all, the 1 year, 3 years and 5 years returns show fantastic returns. Whatever method goes, as long as the deal is done. The understanding on the subject matter, or rather the lack of it, is not an issue to some. An example of how shallow the understanding can be seen below, taken from http://www.irwan.biz/public-mutual-my-first-unit-trust/.
A check on FMUTM website delivered this:
| FMUTM No | : 009-0-40856 |
| Name | : ZULKIFLI BIN ADNAN |
| Company Name | : PUBLIC MUTUAL BERHAD |
| Member Since | : 21 Aug 2007 |
| Expiry Date | : 31 Jul 2008 |
| PDUT Status | : Active |
I assume that they are the same person. I do not know this guy personally, and neither has he ever called me. But since he had the guts to post his name and offer his service to readers of the popular site, I might as well take him to illustrate my point.
Now where do I start? Ok...let's see from the "profit from 20-50% 1 year dividend" thing. Need I elaborate more? How did this assumption come about? And via dividend? I can understand that 90% of agents do not understand the difference between income distribution and dividend. But never mind that, it simply doesn't make sense; he must have been thought by his just-as-ignorant upline/mentor and believe me, there are many unit trust agents out there in the same mould, regardless from which company they come from.
Second, noticed that he called himself as a "Mutual Fund Agency Supervisor"? Well, in the company that he's tied to (of which he spelt the name wrongly), the level is the second tier from a 4 tier agency. At this level, he'd be able to recruit downlines, and earn overriding commission from their sales. But just imagine, the quality of knowledge that he'll pass on to his recruits, which in turn will go out and sell it to the public. Scary right?
And a check from the FMUTM website shows that be only obtained his PDUT license on 21 August 2007. Hardly 6 months in the business, and he is already in a position to recruit, train and mentor others despite his lack of knowledge. This is exactly the same issue I talked about when I listed down my wish list for 2008. There must be a proper mechanism that ensures only the right people can be accorded the rights to be promoted do recruitment in an agency structure, so that the quality can be controlled.
Back to the story. When the bulls are running, these agents act and talk like they are some kind of genius. And by stroke of luck, whatever fund they promote to clients do make returns. After all, this is just to be expected in a bull market.
But I've always cautioned them that good things do not last forever. Don't promise returns, but educate clients on how things go about and what it is all about. But many people have got the skill to filter out and only listen to things that they want to listen. Naturally, my piece of advise is often ignored. They prefer to challenge me on silly issues like whether the market is too high at KLCI 1400 level; and as if they want me to say yes to whatever crap they have in their head. As though they need my blessings.
So I decided to take a step backward, mind my own business, serve my clients and source for prospects because I know that these idiot agents will run like headless chicken the moment the stock market takes even a minor tumble.
And how true it turn out to be. But instead of sitting behind and enjoying myself, I am kept busy, having to answer calls from these idiots calling me for advise. Of which, the calls are often ignored. Why should I answer my phone, waste my time and phone battery and talk to them? When they conclude the sales, was I around? No. So how am I supposed to know what crap did they tell their clients? And expect me do do damage control when they enjoyed the sales commission. Did they offer a portion of their handsome commission to me? No. So why must I bother to speak to them? Or rather, why bother to even call me at all?
Somehow, yesterday one of them used a land line number which I did not recognise and naturally I answered. This idiot called to ask what have I done to my clients, whether I have switched their investments over to money market or bond fund in view of the declining market.
I was really annoyed with this idiot, so I just asked him, what if immediately after the switch there is a market rebound? So switch back to equities again? And what would happen after the switch the market consolidates again?
The movement of the stock market is something that nobody can predict. Ideally it is best to switch out from equity at its highest point, and to switch in when it reaches a low point. But my question is, how high is the highest and how low is the lowest? And who can predict the direction of the market tomorrow and day after?
Switching funds is an important process of unit trust investment, but definately not to be used in a misinformed market timing strategy by nit trust agents. The way I see it, agents who suggest clients switch here, switch there are going to bring your investments nowhere as they are incompetent and probably clueless themselves.
15 January 2008
Stupid Is As Stupid Does
Once I had this interesting encounter with an ex-boss of mine. He brought me out for some beers sometime around 4pm. Yes, it was during office hours and yes, I was still employed then. Not that I enjoyed drinking, but when the boss asks to do something, it's best not to say no!
This ex-boss of mine (Big Boss) was a VP of an wealth management/financial planning product-related company. Somehow we clicked along very well and I guess he just loved chatting with me. And to a certain extend, he trusted me a lot too.
So we had our beers and chatted about some no-brainer topics....about girls with ample assets, his heroic feats with his ex-girlfriends (some are even married women!) and crap like that.
Somehow I liked that man. While he was running his mouth telling me how much he spent on this woman and that woman, I analysed his situation. He's like 42 years old, earning around RM15k a month, has a wife and three kids. Eldest being 12 years old, youngest 5 years old I guess. Big Boss was a huge spender...he maintains 2 cars (worth around RM250k), loves to splurge on gifts likes handphones for for girls that he likes, and also a heavy drinker. He once told me that he needs 9 cans of beer at night, otherwise he can't sleep. Owh, did I tell you that he is the sole breadwinner?
This ex-boss of mine (Big Boss) was a VP of an wealth management/financial planning product-related company. Somehow we clicked along very well and I guess he just loved chatting with me. And to a certain extend, he trusted me a lot too.
So we had our beers and chatted about some no-brainer topics....about girls with ample assets, his heroic feats with his ex-girlfriends (some are even married women!) and crap like that.
Somehow I liked that man. While he was running his mouth telling me how much he spent on this woman and that woman, I analysed his situation. He's like 42 years old, earning around RM15k a month, has a wife and three kids. Eldest being 12 years old, youngest 5 years old I guess. Big Boss was a huge spender...he maintains 2 cars (worth around RM250k), loves to splurge on gifts likes handphones for for girls that he likes, and also a heavy drinker. He once told me that he needs 9 cans of beer at night, otherwise he can't sleep. Owh, did I tell you that he is the sole breadwinner?
Then I just popped in some questions and laid down some facts. It went something like this:
"Boss, when you are 55, your eldest would be 25. Probably he would have graduated by then, coincide with your retirement age. But your youngest would be around 17, still studying. Have you made plans for your retirement? Have you started investing to prepare for the future?"
He said not yet. Then I continued.
"Boss, I reckon that at the rate you are going, your last drawn pay would be in the range of RM30k at least. Now this is a big amount to replace. Of course you have accustomed yourself to a certain level of lifestyle, and I'm sure that you would want to maintain it. Why haven't you started any form of investment, say like utilising your EPF funds to invest in unit trust?"
He looked at me, and from his facial expression I knew that I've caught his attention. "I never really given it much thought", he replied.
"Boss, you really need to start somewhere. You really should do something about it. Assuming all 3 kids are working, and you are retired. How much can each kid contribute to you? RM1k each every month? That's RM3k in total, far away from your RM30k last drawn salary. Would that be enough? Or even, would they be able to contribute that much to you every month? If you read the newspapers recently, typically EPF contributors use up all their EPF money within 3 years of their retirement."
Big Boss was in a deep thought. Heck, he was probably so taken aback by the facts I had presented to his face that he spent about 20 seconds in silence, staring hard at the floor. And I was taken aback too. He was usually in the drivers seat, trying to drive sales for the company. And there was I, giving him a dose of his medicine, if you can call that, unintentionally.
Then he said "Engkau ni memang bagus lah. I can consider you to be my financial consultant. Actually I invested in xyz fund a few years back, but my agent just gone missing and bla bla bla....."
I felt that I had him in the bag. He would become my first prospect as I had tendered my resignation at that point of time, serving my last few days in the company before embarking as a full time unit trust and insurance agent. but honestly, at that point of time and even to this moment, making a sales from him is not my intention. I did not exploit his weaknesses and touched his soft spot in order to get his sales. It was, and still is, a genuine concern for my boss whom I regard as a good friend, the person who made the decision and gave me the employment opportunity. And since I would be an agent, why not I take care of his investment?
Few weeks later, I met him at his office (my former working place) and passed him some literature. He praised me again..."bagus laa kau ni..." When I asked for an appointment to present to him in a proper manner, he asked me to call him in the next few days, around 5pm.
Which I did....and he said he'll call me back as he was having a discussion. I gave him the benefit of any doubt, and waited. Still no call from him. So I called him. He didn't picked up my phone after seeing my handphone number appearing on his phone. Not once, not in a day. But a few times over the next few days. And no reply too to the smses that I sent.
So I got the message, although it was unspoken. The unspoken words were louder than whatever his bullshit praise for me. The way I see it, he is one of the biggest fool that I've ever met. A hipocrite. His job was to drive sales for the company, and always encourage people to sell at whatever it takes. His famous quote "You job is to push people!!!" And yes he showed me his true color when it comes to himself, a poor little coward who turned yellow.
Was I pushing him? No. Was I selling something useless to him? No. Did he indicate his interest? Yes. But did he said have the guts to pick up my calls or at least sms me back to say "no"? No!
The way I see it, he's not a pro. He's just a wannabe sales expert. He's sitting at his chair due to he asses that he kissed and the boots that he licked. No wonder the sales of the company sucked big time. And as fate wanted it, he was downgraded due to corporate restructuring. From a big boss, I now regard him as plain stupid.
Go And Meet That Insurance Agent!
Insurance is a product that you should buy when you don't need it, because if when the time comes that you need it, you can't but it. It applies to all types of insurance...life, PA, fire, motor...same concept.
I have met so many people who resented when I brought up the topic of insurance. Probably the funniest incident was when an ex-classmate of mine told me that he has insurance coverage....in the form of MRTA!
Most common excuses that people come up with whenever I bring up the subject:
1) I already have coverage under my company
Consider this: you will never know when the company will show you the door out. And neither will you know when you'll be on your own and start a new business, or even join a new company. Whatever the situation may be, the fantastic coverage that the company accords to you stops the moment you are no longer under their employment. And when that happens, sooner or later, your health condition at that point of time is a point to be considered by insurance companies whether you are a risk worth insuring.
There is a classic example that was told to me by a friend many years ago. His ex-boss (in an MNC) was once upon a time a very proud man. He looked at agents as blood sucking leeches and will take every opportunity to say "Insurance tipu orang!" And he was ultra confident that the company that he was attached to would provide all the medical coverage that he needs. Then one fine day, tragedy struck and Mr Boss was paralysed in a freak accident. As stated in the terms and conditions of his employment, the company took care of Mr Boss' medical bills. And as also stated in the terms and conditions of his employment, Mr Boss was medically boarded out of service due to his condition.
The once proud Mr Boss is now living on the golden handshake given by his employers. No medical or whatsover insurance coverage whatsoever due to his condition. He is paralysed, and there are possibilities of him having health problems such as heart problems, kidney failure, cancer etc. At one time cold calls from insurance agents were his number 1 enemy, but none would call him. Why would insurance agents avoid him? Well, why must they waste their time soliciting business from him? At his condition, chances for insurance companies to insure him are very slim as he is a sub standard case. Or a large percentage of premium loading or condition exclusions are likely to be imposed if he is lucky. And at his inability to generate income, how would he be able to sustain paying for the premium? Any agents would not want their production persistency to be effected. And which agents would want to spend so much time sending him for medical test etc when there are so many straight forward simple cases by healthy prospects out there?
I am just trying to be real here. The role of an insurance agent is to solicit good business, and service the clients through thick and thin. But soliciting prospects in the extreme sub standard case category are too much of a hassle, and to put it bluntly, a waste of time.
2) I got no money lah!
Probably one of the biggest bullshit of all time. Agents are not dumb, they would qualify their prospects before doing an approach. Yeah, some are really financially tight. But the most baffling situation is some have the money for the latest handphone, ASTRO monthly subscription, RM100k plus car and all the good things in life, except money for insurance. And we are not talking about RM500 a month premium, RM150 is also too much. I can't dictate how a person should spend their hard earned money, but I'm just sad that their priority is towards lesser important things. What more can I say?
3) I already have insurance
Fine if you have a policy. Congratulations! But are you aware of your coverage? Or even what plan did you buy?
Some just give this excuse, as if it is an ultimate excuse to end the topic. Fine, well and good if you can answer 2 of those questions posed. But if it is just an excuse to kill the topic, then Mr Smarty Pants might live to regret it later, well if he is lucky to be alive. Ever heard of anyone saying "insurance tipu orang"...or "Insurance are bullshit! When it comes to claim, this one cannot claim, that one cannot claim!" Well, if you have a personal accident plan, you should not expect the insurance company to take care of your hospitalisation bills if you are admitted to the hospital for a heart bypass. And you also should not expect your hospital income plan to take care for your RM7,000 bill for your admission due to food poisoning.
And definately don't expect your RM45 a month premium policy will provide you adequate coverage for a hospital bill of RM30,000! And please be reasonable with your expectations, I've come acrossed a genuine prospect who wanted to pay RM120 per month and expect the plan to have a sach value of RM100k in 10 years time!
There are even some who still cling on to their existing plan, although the plan and coverage is crap and inadequate. I don't encourage anyone to surrender their existing policy, in most circumstances it would not be beneficial to do so. But if you got to do it, then do it. NEVER have emotional attachment to your existing insurance plan the same way as you treasure that antique clock hanging at your home.
The list of excuses goes on and on. An agent with 40 years of experience might come across some fantastic new unthinkable excuses everyday. So think twice before you come up with some bullshit to shoo the insurance agent away. It's good to listen, you have the right to say no if you don't see the benefits anyway. The way I see it, whether you have an insurance policy or not...you are still covered. The only difference is if you have a policy, then you are transferring the risk to a third party. If not, then you are insuring yourself, and good luck!
I have met so many people who resented when I brought up the topic of insurance. Probably the funniest incident was when an ex-classmate of mine told me that he has insurance coverage....in the form of MRTA!
Most common excuses that people come up with whenever I bring up the subject:
1) I already have coverage under my company
Consider this: you will never know when the company will show you the door out. And neither will you know when you'll be on your own and start a new business, or even join a new company. Whatever the situation may be, the fantastic coverage that the company accords to you stops the moment you are no longer under their employment. And when that happens, sooner or later, your health condition at that point of time is a point to be considered by insurance companies whether you are a risk worth insuring.
There is a classic example that was told to me by a friend many years ago. His ex-boss (in an MNC) was once upon a time a very proud man. He looked at agents as blood sucking leeches and will take every opportunity to say "Insurance tipu orang!" And he was ultra confident that the company that he was attached to would provide all the medical coverage that he needs. Then one fine day, tragedy struck and Mr Boss was paralysed in a freak accident. As stated in the terms and conditions of his employment, the company took care of Mr Boss' medical bills. And as also stated in the terms and conditions of his employment, Mr Boss was medically boarded out of service due to his condition.
The once proud Mr Boss is now living on the golden handshake given by his employers. No medical or whatsover insurance coverage whatsoever due to his condition. He is paralysed, and there are possibilities of him having health problems such as heart problems, kidney failure, cancer etc. At one time cold calls from insurance agents were his number 1 enemy, but none would call him. Why would insurance agents avoid him? Well, why must they waste their time soliciting business from him? At his condition, chances for insurance companies to insure him are very slim as he is a sub standard case. Or a large percentage of premium loading or condition exclusions are likely to be imposed if he is lucky. And at his inability to generate income, how would he be able to sustain paying for the premium? Any agents would not want their production persistency to be effected. And which agents would want to spend so much time sending him for medical test etc when there are so many straight forward simple cases by healthy prospects out there?
I am just trying to be real here. The role of an insurance agent is to solicit good business, and service the clients through thick and thin. But soliciting prospects in the extreme sub standard case category are too much of a hassle, and to put it bluntly, a waste of time.
2) I got no money lah!
Probably one of the biggest bullshit of all time. Agents are not dumb, they would qualify their prospects before doing an approach. Yeah, some are really financially tight. But the most baffling situation is some have the money for the latest handphone, ASTRO monthly subscription, RM100k plus car and all the good things in life, except money for insurance. And we are not talking about RM500 a month premium, RM150 is also too much. I can't dictate how a person should spend their hard earned money, but I'm just sad that their priority is towards lesser important things. What more can I say?
3) I already have insurance
Fine if you have a policy. Congratulations! But are you aware of your coverage? Or even what plan did you buy?
Some just give this excuse, as if it is an ultimate excuse to end the topic. Fine, well and good if you can answer 2 of those questions posed. But if it is just an excuse to kill the topic, then Mr Smarty Pants might live to regret it later, well if he is lucky to be alive. Ever heard of anyone saying "insurance tipu orang"...or "Insurance are bullshit! When it comes to claim, this one cannot claim, that one cannot claim!" Well, if you have a personal accident plan, you should not expect the insurance company to take care of your hospitalisation bills if you are admitted to the hospital for a heart bypass. And you also should not expect your hospital income plan to take care for your RM7,000 bill for your admission due to food poisoning.
And definately don't expect your RM45 a month premium policy will provide you adequate coverage for a hospital bill of RM30,000! And please be reasonable with your expectations, I've come acrossed a genuine prospect who wanted to pay RM120 per month and expect the plan to have a sach value of RM100k in 10 years time!
There are even some who still cling on to their existing plan, although the plan and coverage is crap and inadequate. I don't encourage anyone to surrender their existing policy, in most circumstances it would not be beneficial to do so. But if you got to do it, then do it. NEVER have emotional attachment to your existing insurance plan the same way as you treasure that antique clock hanging at your home.
The list of excuses goes on and on. An agent with 40 years of experience might come across some fantastic new unthinkable excuses everyday. So think twice before you come up with some bullshit to shoo the insurance agent away. It's good to listen, you have the right to say no if you don't see the benefits anyway. The way I see it, whether you have an insurance policy or not...you are still covered. The only difference is if you have a policy, then you are transferring the risk to a third party. If not, then you are insuring yourself, and good luck!
12 January 2008
Just Say No!
Is it so hard to say no to decline something? I don't think so.
As much as I hate to hear a no from my prospects, I would love it more than a fake yes. With a no, I would be able to move on with life or whatever I do. Without a no, I take it at face value that my prospect is still interested with my product and service. Then I would spend time to follow up and reserve time for appointments, spend money to make phone calls, petrol, parking etc and emotionally build up hope for the deal to go through.
But some people are just plain stupid. For some reason or another, they just refuse to say no although they are least interested to sign up for whatever is being offered. And they send agents like me into a wild goose chase, or in BM kejar bayang.
Some make appointments, and don't turn up at all! And they won't pick up the phone after that.... Damn it! I would understand if there is a last minute change of plan, but just pick up the damn phone and inform me!
Or some idiots would say something like "I'm so busy...call me back in 2 weeks time." And after 2 weeks, they'd still be busy...and it's like a never ending cycle. I was also made to chase after this particular client; she had requested me to meet up with her and her husband at her house as she wants to listen to my proposal and so happen to be fed-up with her existing agent. But each time I called, thousand and one excuses will pop up. "I'm busy, my mother is sick, festive season is coming, my husband is outstation (most used excuse)...." So, I gave her time, and continued to call her from time to time as she was still indicating her interest to meet up with me. No high pressure sales tactics, nothing. I did my homework and prepared my presentation for her. After so much effort and delay in getting an appointment, in my next call she told me that she re-invested with her existing agent, yes, the very same person whom she complained so much about.
Bloody bastard! Pardon my language, but she deserves it. For all the time and effort I put in, is this the treatment I get? It seems like her husband is never at home each time I request for an appointment, well I hope it's true...not because of work but for a new lady in his life.
Honestly, it is very hard to tell if one is interested or not. But my advise to anyone who reads this, please be fair to anyone who tries to solicit sales from you. May it be credit cards, mortgage, unit trust, insurance, wills, water filter or whatever it may be. It would be good to listen to what the person have got to offer though. But if you are not interested to take it to another level, please say NO. Don't be an idiot who try to act cool and obliging, only to turn yellow, put your tail between your legs and hide in a longkang thereafter. Professional salespeople would be able to take a no and would be able to judge whether the no is worthy of another try. Only amateurs would try their best to "overcome objection" and try to turn a genuine NO into a lame YES.
Again, please say NO if you are not interested. How would you like it if your bride/groom decide to ditch you and not turn up during your wedding ceremony, dissapearing mysteriously? Or to be told that you are not selected for the new job after being promised verbally (like the way I was once promised by a bastard named Simon...watch out dude, I'll spit at you right between the eyes the next time I see you, you mofo!). Trust me, this world is like a mirror...or a spinning wheel. What you do to others, will be done to you in another way on another day. Or if it doesn't hit you, your loved ones will get it. That's how the world works. And the way I see it, that's the way I want it for those who did it to me. And I'll enjoy it then.
So, please say NO if it's a NO!
As much as I hate to hear a no from my prospects, I would love it more than a fake yes. With a no, I would be able to move on with life or whatever I do. Without a no, I take it at face value that my prospect is still interested with my product and service. Then I would spend time to follow up and reserve time for appointments, spend money to make phone calls, petrol, parking etc and emotionally build up hope for the deal to go through.
But some people are just plain stupid. For some reason or another, they just refuse to say no although they are least interested to sign up for whatever is being offered. And they send agents like me into a wild goose chase, or in BM kejar bayang.
Some make appointments, and don't turn up at all! And they won't pick up the phone after that.... Damn it! I would understand if there is a last minute change of plan, but just pick up the damn phone and inform me!
Or some idiots would say something like "I'm so busy...call me back in 2 weeks time." And after 2 weeks, they'd still be busy...and it's like a never ending cycle. I was also made to chase after this particular client; she had requested me to meet up with her and her husband at her house as she wants to listen to my proposal and so happen to be fed-up with her existing agent. But each time I called, thousand and one excuses will pop up. "I'm busy, my mother is sick, festive season is coming, my husband is outstation (most used excuse)...." So, I gave her time, and continued to call her from time to time as she was still indicating her interest to meet up with me. No high pressure sales tactics, nothing. I did my homework and prepared my presentation for her. After so much effort and delay in getting an appointment, in my next call she told me that she re-invested with her existing agent, yes, the very same person whom she complained so much about.
Bloody bastard! Pardon my language, but she deserves it. For all the time and effort I put in, is this the treatment I get? It seems like her husband is never at home each time I request for an appointment, well I hope it's true...not because of work but for a new lady in his life.
Honestly, it is very hard to tell if one is interested or not. But my advise to anyone who reads this, please be fair to anyone who tries to solicit sales from you. May it be credit cards, mortgage, unit trust, insurance, wills, water filter or whatever it may be. It would be good to listen to what the person have got to offer though. But if you are not interested to take it to another level, please say NO. Don't be an idiot who try to act cool and obliging, only to turn yellow, put your tail between your legs and hide in a longkang thereafter. Professional salespeople would be able to take a no and would be able to judge whether the no is worthy of another try. Only amateurs would try their best to "overcome objection" and try to turn a genuine NO into a lame YES.
Again, please say NO if you are not interested. How would you like it if your bride/groom decide to ditch you and not turn up during your wedding ceremony, dissapearing mysteriously? Or to be told that you are not selected for the new job after being promised verbally (like the way I was once promised by a bastard named Simon...watch out dude, I'll spit at you right between the eyes the next time I see you, you mofo!). Trust me, this world is like a mirror...or a spinning wheel. What you do to others, will be done to you in another way on another day. Or if it doesn't hit you, your loved ones will get it. That's how the world works. And the way I see it, that's the way I want it for those who did it to me. And I'll enjoy it then.
So, please say NO if it's a NO!
11 January 2008
My 2008 New Year Wish List
My wish list for 2008 (apart from things which are related to me directly like more sales, more clients, more money and all other things which need not be here) are as follows:
1) For EPF to be considerate and review the 3% capping for sales charge. Ladies and gentlemen, EPF takes a cut for every EPF withdrawal for unit trust investment purpose and penalise the UTMC RM100 (which for some companies, are passed back to the agent) for every rejected case. While it may be good for investors, it is the agent who suffer. A 3% sales charge capping translate to lower commission for agents, who pay for a lot of things while soliciting a sales...phone bill, parking, petrol etc. Just imagine, for an investment of RM3,000 via EPF, how much does an agent make as compared to the responsibility of servicing he is supposed to undertake?
2) For the regulators to focus on something else apart from the plan to lower down the sales charge for unit trust investments via cash. If they do not know what to do, then they should read on this post, and the rest of the articles in this blog.
3) For the regulators and the UTMC to create a proper mechanism to control the agency structure. Presently, the agency structure is very much an internal control thing. Typically there are 4 rank or tiers on an agency structure, with of course the highest ranked enjoying the lion's share. In order to promote, the agent must meet a certain sales quota, a certain number of recruits and also be in the company for a certain period of time. The way I see it, what is lacking is a mechanism that tests the technical knowledge of the agent. Let me put it this way. In any organisation where people makan gaji, promotion do not come easy. Of course, I understand thatthere are many ways for people to be promoted...by ability, by bootlicking, by having sex with the big boss, by back stabbing...you name it.
But let's be professional in our thoughts. It is so easy to climb up the hierachy in a unit trust agency structure; the core area needed is a person must be able to do sales. Never mind if the person know next to nothing on what he is actually selling, as long as he can sell. Then he must recruit.
The logic of this argument is simple. If one is lacking in your knowledge on the subject matter, imagine what time of crap he is passing down to his downlines...and the cycle continues. Mind you, if a product like unit trust is so simple, then why is it so difficult to be a fund manager? If a fund manager need to be licensed by the SC and some have CFAs to boost up his credentials, then how come their end product can be easily sold any Ah Kaw with 3rd grade in SPM who can pass that no brainer FMUTM exam? Unit trust looks like a simple product, but in actual fact it is not. Is is an investment tool. Don;t make this product like kacang putih, practically anyone who wants to sell, CAN sell!
The regulators must do something to ensure the non-deserving people do not reach to the level they don't deserve. They must do a check on the knowledge competency of agents AND also the number of years of experience of those who aspire to promote, only then a better (not perfect) quality control can be ensured.
4) Minimum qualification for wannabes must be higher. Right now: SPM grade 3, 21 years and above. No wonder a lot of rubbish out there. To a certain extent, almost no difference with direct selling agents. Some on...wake up! Make it a minimum diploma and 26 years and above! This is not a toy we are selling!
5) High penalty should be imposed on unlicensed people who get involved in unit trust sales. Those who have yet to sit for their exam, those who managed to fail their exam, those who are underaged, those who are just too lazy to sit for the exam....you name it...use your imagination. These people exist. The regulators should go out and nab these culprits! Fine them to the max, and throw them to jail too! And don't let those who collaborate go away! Catch them too, they are in fact, more guilt! We are not selling cookies here!
6) Unit trust investors should have a centralised account, so that the churning activities between UTMCS by unethical group of agents can be detected. Heck, this might be wishful thinking as right now, even act of churning between funds in the same company go unpunished!
7) The regulators should check on the overseas trips offered by UTMCs as incentives for agents. These posh and expensive trips are one of the attractions for people to join the industry as agents, and without a doubt one of the main reasons why unethical practice occur. I'm not saying that deserving people should not be incentivised accordingly, but in most cases agents benefit more than investors themselves. The short term gains are all for the agents, but investors have to wait for "middle to long term" to see theirs.
The way I see it, wish lists are made out of hopes and dreams. For this wish list, I can continue to hope and dream on....
1) For EPF to be considerate and review the 3% capping for sales charge. Ladies and gentlemen, EPF takes a cut for every EPF withdrawal for unit trust investment purpose and penalise the UTMC RM100 (which for some companies, are passed back to the agent) for every rejected case. While it may be good for investors, it is the agent who suffer. A 3% sales charge capping translate to lower commission for agents, who pay for a lot of things while soliciting a sales...phone bill, parking, petrol etc. Just imagine, for an investment of RM3,000 via EPF, how much does an agent make as compared to the responsibility of servicing he is supposed to undertake?
2) For the regulators to focus on something else apart from the plan to lower down the sales charge for unit trust investments via cash. If they do not know what to do, then they should read on this post, and the rest of the articles in this blog.
3) For the regulators and the UTMC to create a proper mechanism to control the agency structure. Presently, the agency structure is very much an internal control thing. Typically there are 4 rank or tiers on an agency structure, with of course the highest ranked enjoying the lion's share. In order to promote, the agent must meet a certain sales quota, a certain number of recruits and also be in the company for a certain period of time. The way I see it, what is lacking is a mechanism that tests the technical knowledge of the agent. Let me put it this way. In any organisation where people makan gaji, promotion do not come easy. Of course, I understand thatthere are many ways for people to be promoted...by ability, by bootlicking, by having sex with the big boss, by back stabbing...you name it.
But let's be professional in our thoughts. It is so easy to climb up the hierachy in a unit trust agency structure; the core area needed is a person must be able to do sales. Never mind if the person know next to nothing on what he is actually selling, as long as he can sell. Then he must recruit.
The logic of this argument is simple. If one is lacking in your knowledge on the subject matter, imagine what time of crap he is passing down to his downlines...and the cycle continues. Mind you, if a product like unit trust is so simple, then why is it so difficult to be a fund manager? If a fund manager need to be licensed by the SC and some have CFAs to boost up his credentials, then how come their end product can be easily sold any Ah Kaw with 3rd grade in SPM who can pass that no brainer FMUTM exam? Unit trust looks like a simple product, but in actual fact it is not. Is is an investment tool. Don;t make this product like kacang putih, practically anyone who wants to sell, CAN sell!
The regulators must do something to ensure the non-deserving people do not reach to the level they don't deserve. They must do a check on the knowledge competency of agents AND also the number of years of experience of those who aspire to promote, only then a better (not perfect) quality control can be ensured.
4) Minimum qualification for wannabes must be higher. Right now: SPM grade 3, 21 years and above. No wonder a lot of rubbish out there. To a certain extent, almost no difference with direct selling agents. Some on...wake up! Make it a minimum diploma and 26 years and above! This is not a toy we are selling!
5) High penalty should be imposed on unlicensed people who get involved in unit trust sales. Those who have yet to sit for their exam, those who managed to fail their exam, those who are underaged, those who are just too lazy to sit for the exam....you name it...use your imagination. These people exist. The regulators should go out and nab these culprits! Fine them to the max, and throw them to jail too! And don't let those who collaborate go away! Catch them too, they are in fact, more guilt! We are not selling cookies here!
6) Unit trust investors should have a centralised account, so that the churning activities between UTMCS by unethical group of agents can be detected. Heck, this might be wishful thinking as right now, even act of churning between funds in the same company go unpunished!
7) The regulators should check on the overseas trips offered by UTMCs as incentives for agents. These posh and expensive trips are one of the attractions for people to join the industry as agents, and without a doubt one of the main reasons why unethical practice occur. I'm not saying that deserving people should not be incentivised accordingly, but in most cases agents benefit more than investors themselves. The short term gains are all for the agents, but investors have to wait for "middle to long term" to see theirs.
The way I see it, wish lists are made out of hopes and dreams. For this wish list, I can continue to hope and dream on....
05 January 2008
Switch Here, Switch There...A Financial Genius @ Work
I just had an interesting conversation with a friend of mine who is a unit trust agent. This friend of mine (let's refer to her as Nana) was in one of the UTMC's office yesterday, minding her own business and making cold calls to prospect. She overheard 2 other agents (one identified as a high ranked agent) calling their clients to talk about a fund which will be launched next week.
The interesting part was these 2 agents were suggesting to their clients to switch out from an Islamic China Fund to this new fund, suggested ratio is take 70% out and just keep 30% in.
While it looks like the agents are servicing their clients well, what is actually happening is most likely a churning attempt. During the initial offer period of a brand new fund, switching transaction is not allowed except for switching from money market or bond funds into the new fund.
The term "switching" is used by some unethical agents to sugar coat their actions. But instead of doing a switching transaction, what is done is they get the customers to redeem their existing fundl, then buy back into another fund. That is defined as churning, not switching.
Nana then overheard the agents trying to justify and pitch up their proposal by giving some bombastic reasons like market in China not now doing well, the market is uncertain, this new fund is far better and whatever crap.
Now, just think about this. The China fund was launched probably 1 month ago or so, and I'm sure the sales pitch for this fund was about the enormous potential of China etc etc like it's a sure bet to make money. There are also some idiot agents who go around and tell their prospects and clients to invest in the new China fund as newly launched funds are "cheap and undervalued." Whatever reason there is, some might be even unthinkable. As long as the sales is concluded.
Then faster than a speeding bullet, or even Superman for that matter, all the bullishness about China just vanished into thin air and the ever concerned agent is now worry about the clients' exposure to the China market. Or precisely Greater China market. Yeah, only 1 month ago it seems like China is heading to heaven, now it's falling in to hell. And like a knight in shining armour, the bloody agent comes to the rescue and customers are advised to maintain a minimal position in the China fund, redeem 70% and go to this new fund. It's a better bet, a better fund..diversify! Don't put your eggs in one basket! And do it now before it's too late....
The poor client, touched by the concern shown by the agents and just blown away by wisdom of the financial genius, just agree to the proposal and say "Do what you've got to do. I trust you 100%." So innocent ones might even compare stories and make a recommendation : "My agent sooo clever, his service is very good. He switched my fund here and there, he understand things better. He'll do anything, I just sign and leave everything to him. Buy from him laa!"
And the churning process is completed! And to put cherry on the icing, he gets referred to another prospect!
Sad but true. It happens. Some of you agents out there might be offended by this story...DON'T! The way I see it, if you are offended, then you are most either an incompetent agent with a severe lack of understanding or an intelligent agent who condone the sinful act of churning.
It is a noble act if the market is really crashing down. But as at today, 5th January 2008, I have not read anything that imply any stock market or economy is crashing down. A lot of hearsay, but apart from those rubbish nothing concrete. Ups and downs of the atock market around the world is routine, some take profit, some take position and some wait for opportunity at the sideline.
But this is unit trust! The fund manager can take defensive position if they feel it's time to do so. And the very basic is it's not a tool for speculation, or even short term gains.
The act of churning is one natural way for some unethical agents to recycle their clients money. It's like they have to do it, because they need to qualify for that overseas trip, to pay for that BMW, the posh condo and to earn that year end bonus apart from that fat monthly commission. And not forgetting the personal glory...the applause and the chance to share their sucess story in the weekly or monthly agency meeting.
If churning is bad, now how come some customers can bodoh bodoh kena tipu? Now, in a bull market (like the one we are in now), things might move very fast. It's possible to see fantastic returns within a short span of time. Some customers are just happy to make money. No matter how much. A 4% gain for a RM10 million investment is RM400k; now that's a lot of money. But in reality if they hold it a little bit longer in a bull market, 20% nett returns are possible; and that is RM2 million gain. And due to the churning, for each new (not switching) entry into a fund the client will be charged between 5% - 6.5% (depends on when the transaction too place). And this charge eat into the returns of the customer, and let's say the customer lets his money to be rolled by the agent 3 times in a year and makes 10% nett returns, he actually paid more around 15% - 18% cumulatively in sales charge, and the agent makes at least 10% in commission assuming the commission rate is 3% flat (in reality, it's higher than that!).
Some fool might say...well at worst, it's a win win situation, the customer makes 10% and we make 10% for our service. The customer still make higher than average returns...bla bla bla! Well, the way I see it, the customer put his money at stake and at risk to make the 10%. The bloody agent deprived him of making another 10% or so by churning his money and all he lost is his saliva!
The interesting part was these 2 agents were suggesting to their clients to switch out from an Islamic China Fund to this new fund, suggested ratio is take 70% out and just keep 30% in.
While it looks like the agents are servicing their clients well, what is actually happening is most likely a churning attempt. During the initial offer period of a brand new fund, switching transaction is not allowed except for switching from money market or bond funds into the new fund.
The term "switching" is used by some unethical agents to sugar coat their actions. But instead of doing a switching transaction, what is done is they get the customers to redeem their existing fundl, then buy back into another fund. That is defined as churning, not switching.
Nana then overheard the agents trying to justify and pitch up their proposal by giving some bombastic reasons like market in China not now doing well, the market is uncertain, this new fund is far better and whatever crap.
Now, just think about this. The China fund was launched probably 1 month ago or so, and I'm sure the sales pitch for this fund was about the enormous potential of China etc etc like it's a sure bet to make money. There are also some idiot agents who go around and tell their prospects and clients to invest in the new China fund as newly launched funds are "cheap and undervalued." Whatever reason there is, some might be even unthinkable. As long as the sales is concluded.
Then faster than a speeding bullet, or even Superman for that matter, all the bullishness about China just vanished into thin air and the ever concerned agent is now worry about the clients' exposure to the China market. Or precisely Greater China market. Yeah, only 1 month ago it seems like China is heading to heaven, now it's falling in to hell. And like a knight in shining armour, the bloody agent comes to the rescue and customers are advised to maintain a minimal position in the China fund, redeem 70% and go to this new fund. It's a better bet, a better fund..diversify! Don't put your eggs in one basket! And do it now before it's too late....
The poor client, touched by the concern shown by the agents and just blown away by wisdom of the financial genius, just agree to the proposal and say "Do what you've got to do. I trust you 100%." So innocent ones might even compare stories and make a recommendation : "My agent sooo clever, his service is very good. He switched my fund here and there, he understand things better. He'll do anything, I just sign and leave everything to him. Buy from him laa!"
And the churning process is completed! And to put cherry on the icing, he gets referred to another prospect!
Sad but true. It happens. Some of you agents out there might be offended by this story...DON'T! The way I see it, if you are offended, then you are most either an incompetent agent with a severe lack of understanding or an intelligent agent who condone the sinful act of churning.
It is a noble act if the market is really crashing down. But as at today, 5th January 2008, I have not read anything that imply any stock market or economy is crashing down. A lot of hearsay, but apart from those rubbish nothing concrete. Ups and downs of the atock market around the world is routine, some take profit, some take position and some wait for opportunity at the sideline.
But this is unit trust! The fund manager can take defensive position if they feel it's time to do so. And the very basic is it's not a tool for speculation, or even short term gains.
The act of churning is one natural way for some unethical agents to recycle their clients money. It's like they have to do it, because they need to qualify for that overseas trip, to pay for that BMW, the posh condo and to earn that year end bonus apart from that fat monthly commission. And not forgetting the personal glory...the applause and the chance to share their sucess story in the weekly or monthly agency meeting.
If churning is bad, now how come some customers can bodoh bodoh kena tipu? Now, in a bull market (like the one we are in now), things might move very fast. It's possible to see fantastic returns within a short span of time. Some customers are just happy to make money. No matter how much. A 4% gain for a RM10 million investment is RM400k; now that's a lot of money. But in reality if they hold it a little bit longer in a bull market, 20% nett returns are possible; and that is RM2 million gain. And due to the churning, for each new (not switching) entry into a fund the client will be charged between 5% - 6.5% (depends on when the transaction too place). And this charge eat into the returns of the customer, and let's say the customer lets his money to be rolled by the agent 3 times in a year and makes 10% nett returns, he actually paid more around 15% - 18% cumulatively in sales charge, and the agent makes at least 10% in commission assuming the commission rate is 3% flat (in reality, it's higher than that!).
Some fool might say...well at worst, it's a win win situation, the customer makes 10% and we make 10% for our service. The customer still make higher than average returns...bla bla bla! Well, the way I see it, the customer put his money at stake and at risk to make the 10%. The bloody agent deprived him of making another 10% or so by churning his money and all he lost is his saliva!
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