The person who sells life insurance (and mutual funds too perhaps) is the most hated and maligned man perhaps in the BFSI space.

I have no clue why. Maybe because he is the link between the customer and the manufacturer. Please do remember the agent (variously called agent, advisor, licentiate consultant, certified consultant, etc.).

He delivers a product –

Made by the life insurance company (or mutual fund) which has been approved / certified / at least seen by the Regulator.

Run by Trustees / Directors / CEOs who are amongst the best paid Indians (true even in the world market perhaps, but we will stick to India)

Managed by a big team of managers – CEO / Chief Investment officer / COO / Sales team – very easy to find people who are in the salary package of US $ 100,000 – which means they are in the top 5% of Indian population. Or is it top 1% of Indian population? Not sure.

All the products are approved / certified by the Regulator – and most of the investment is made in bonds / equities issued by Government of India and by India’s top corporate.

Not too many IFAs are in the same category as the employees of these finance companies. Not more 10,000 perhaps can run their house holds with the income earned by distributing financial products. Most of them HAVE to do something else (over and above sales) to meet their family money requirements.

The journalists who criticize them earn much much more, are treated with far greater respect and have never been required to meet an aggressive customer. The journalists normally meet people from a position of strength, never from a position of weakness. In most cases the ‘clients’ feel obliged that somebody from the media is meeting them. So what if they are from the MSM and paid for doing the story?

The IFA meets the customer from a position of weakness. The customer benefits too – remember 8000 customers belonging to 900 IFA relationships earned about 20% in Franklin India Bluechip over a 20 year period. No bank, no national distributor did it. Not even Franklin Templeton took the trouble to publicize this. This is true, and it is disappointing that FT did not honor these people by mentioning their names in an ad. This is an awesome return that the customers have got, YES OF COURSE THANKS TO THE BOOM IN EQUITY MARKETS, but to have kept them in the same scheme for 20 years is AN AWESOME ACHIEVEMENT.

I know of only ONE journalist who tried his hand at becoming an IFA. Obviously quickly better sense prevailed and he has gone back to the media related work giving up this ‘profession’. I mean he is now in the 3rd profession of his life.

Let us face it. It is a free world and becoming an IFA is not very difficult. So become an IFA and sell some life insurance and mutual funds HONESTLY. No mis-selling, no wrong selling, no rebating, ….and see whether you earn anywhere near what you are earning today.

An insurance agent / mf agent gets paid an X amount of money – which is inclusive of his effort, the insults that he takes (from the customer, regulator, media, and the companies for whom he works). See if you like the WHOLE PACKAGE. You cannot pick and choose.

See if you can meet your life-style expenses. See if you can sell, see if you can keep your cool with some of the jerks that you meet. See if you can take the insults. Or the 1 hour waits. Or the ‘lets do it next Sunday…today we are busy’ after you have had a 3 hour journey to meet them. Or whether you can afford an office to meet your clients.

Feel it, then write.

Also remember 99% of the fees goes to the top 100 distributors. You may see some of them in Mercs, BMW, Audi. Sure. However seeing those distributors and saying ‘distribution is an awesome business’ is like like taking the income of Sachin Tendulkar and saying ‘Cricketers make tons of money’. Because if you say this, I could retort ‘look at the guy who does not make it to even the Ranji level’ – sadly THAT IS A HUGE POPULATION THERE!

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  1. and also that the rules are made by the regulators and manufacturers, and the agents are NEVER consulted even with regarad to rules IMPACTING them the most.

    the IFA numbers will soon dwindle and the gap between the best and the next rung will DRAMATICALLY increase…

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