There are many people who prefer buying mutual funds, medical and life insurance and many financial products through an agent. Normal reasons why people use an agent are as follows:
- He helps with filling up the form
- He knows what is happening in the industry and will be able to give some useful advice
- He will co-ordinate with the fund house or the insurance company – and most clients find that pretty painful.
- He will handle the claim if it comes to such a situation
- He is authorised and qualified so he must be adding some value in the transaction
- His services are FREE!! HA HA
- He might actually share his commission, will he not?
- He chases, comes home, does all the paper work, reminds…what more can I want? LOL
All this is perhaps true, but let us look at the risks:
- He might give a sub optimal product based on his limited understanding
- Most agents do not understand insurance – medical, life or even simple risks
- The agent may go out of business soon – and you will again be looking for a new guy/gal
- The agent may die before you do…:-)
- If the agent switches loyalty, he may not service the older products he has sold…
- He may fight with the main company – and put your product in a jeopardy!
so be careful in buying a financial product…
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