Here is a rejoinder from a FP…he/she does not want to be named.

Subra read your blog, it is good…really good and sums up the situation.

Let us look at it from the planner’s point of view. The client does not respect the planner enough (your argument that respect has to be earned is well taken). This leads to the planner having to argue for hours on end to explain why a new product from a new/ old fund or life insurance company is not necessary.

At least a doctor is not asked ‘hey doc I do not have diabetes, should i still eat this nice new green color medicine – the package looks nice?’ , but I have to answer such a question. Also when a client goes to the doc he is in pain. Agony if he is in a dentist’s chair! So respect is multiplied when the pain is reduced. However when I meet the client, he has just finished his dinner – and I am the pain!

Then as a planner I have to fight the nonsense that is available on the media (if you do not pay for content directly, the money is sucked out of you – Subra’s own axioms). So the media tells him what is good – he buys – and when it goes wrong he says ‘You did not say STRONGLY enough that I should not buy’. LOL. Damned if we do, damned if we do not.

Yes I agree with you a negative service like the one you proposed of saying ‘I will tell you if the product is suitable for you or not for a fee is not likely to work..because people will not pay.

In case of term insurance, I earn nothing – not because the commissions are poor, but because the ‘claw back’ will happen 🙂 it hurts sir, it hurts.

Do you honestly think people will pay Rs. 35,000 for a super negative mandate – keeping you out of harm’s way? I doubt…

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  1. just 35,000 to protect a life time’s earnings? pretty good value for money..
    errr.. is this one time or recurring?!!

  2. Suresh risk premium always looks high till you understand the risks. The damage people can do to their portfolios not heeding to Gandhiji’s 4th monkey is quite high. And like Kumbhakarna tells Ravana – the risk cover has to be bought before the risk is perceived by the insurance company. Also once the seed is sown and the tree is visible you cannot say…’I withdraw the seed’ – the form of risk has already changed.

    And far more imporatantly when the ‘Golden Deer’ was spotted, did Lord Rama listen to Lakshmana? Well Lust is always greater than reason.

    When Vibheeshana advised Ravana did he get paid? Well you know the answer.

    I am an advisor. I rest my case. Thankfully advising is not my profession, training is.

  3. ‘Claw back’ is when a client throws away a life insurance policy some portion of the commission paid to the agent is taken back. This is a big dissuader – the agent puts in effort, the client takes the policy, then somebody asks him to give it up…so the original agent loses – the penalty for dropping a term insurance is NIL..soit is more rampant in a term insurance policy…

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