Make no mistakes. I do think that agents can play a great role in your life. A good agent for mutual funds, life insurance, real estate, travel, can really work wonders for your investment or travel.

Many of them are very good people with excellent knowledge of the product, customer (you) needs, planning, etc. and many of them have also played an important role in society.

However, being with an agent many a times reduces your choices and brings an element of bias. If for example an agent who sells ALL mutual funds, WILL sell you a bad fund – IF HE HAS TO GET SOMETHING from the fund house. Let us say he has a target to sell Rs. 10 crores of ‘insurance’ or ‘mutual funds’. He has already reached Rs. 9.5 crores. You have to invest Rs. 50L….It is too damn tempting for him to close this scheme with YOUR Cheque.

Apart from this, as an agent he can represent ONLY ONE life insurance company, but of course he can represent all mutual funds. Apart from this of course, he has a vested interest in keeping your money in a poorly performing fund over longer periods of time.

An agent can surely reduce your interaction time with the company – and help you get a duplicate, replace a torn policy, or generally be available in case you need to ask some question.

Interacting with the company is also not easy – you meet extremely difficult to handle kinda people, but some agents are also tough to deal with. So that does not matter too much…..


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  1. subraji, this is hurting. Ok, I will see that in my career as a distributor will not be committing such mistakes.Learnt what not to do an an adviser of mutual funds.


  2. I agree with you. Agents CAN do a lot. But why they don’t.

    Simple reasons.

    Mutual fund agents are not getting enough commission, even for their survival in the industry. Direct Plans from next month will shorten their customer database more. Most of the small investors in India are habitual of getting back a portion of commission of agent. (thanks to LIC of India agents). So, these investors are not ready to pay fees to agents.

    In life insurance, products are designed by the company – good or bad for the customer is a separate question. But in designing of a product, agent has no role. He has to sell those products. If he does not sell, he can not survive.

    The solution can be simple. Just remove all the charges like premium allocation, policy admin etc. and pay a percentage of fund value every year to agent as commission like companies are getting in the form of FMC. This way, agent will target to get more profit for the customer instead of more commission now.

    Lots of things can be changed. But can we expect anything from this Govt. I doubt so. They’re busy in right reforms in wrong time.

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