The following report from Monday’s ST deserves the widest possible publicity because it shows how buyers of life insurance here have been deprived of the opportunity to buy less expensive life insurance: they could have saved as much as $20,000 when buying a $1m life plan.
FUNDSUPERMART’S move to sell insurance products on its online platform at a 50 per cent rebate off the lifetime commission sparked some unhappiness among industry players who saw it as a price war tactic.
Four days after launching it on April 30, Fundsupermart took down the offer, and has stopped selling insurance products since.
On its insurance webpage, which has been removed, Fund- supermart said it was introducing the distribution of protection products as a value-added service to its customers.
“More importantly, clients who are on the search for transparency on the commissions they pay for purchasing insurance can find this here,” it added.
There were also two examples stating that the 50 per cent commission rebate translates into savings of $2,000 for a $1 million term plan. For the same sum assured, the savings for a whole life plan could be more than $20,000.
The calculations were aggregated across three insurance providers, based on the profile of a 40-year-old, non-smoking male.
The Straits Times understands that Fundsupermart initially intended to continue with this model but later revised it to a one-month promotion, before pulling the plug completely.
A check with Tokio Marine, NTUC Income and Manulife, whose products Fundsupermart was distributing, found that individual financial advisory firms are free to employ different business models.
According to the report, financial advisers (what insurance sales persons call themselves,nowadays, for various reasons) bitched to Fundsupermart: The Association of Financial Advisers (Singapore) said in an e-mail statement that when the advertisement was published on Fundsupermart’s website, the association expressed its members’ concern to Fundsupermart, “noting that the tone and language used in its postings could be detrimental to the reputation and professionalism of other financial advisers”. [Err wondering what reputation and professionalism? What can be lower than the reputation and professionalism of life insc sales persons? Used car dealers? Juz kidding leh.
The industry body, representing nearly half of the financial advisory firms here, added: “We are glad that it has taken our views into consideration and has decided to withdraw the advertisement.
Hopefully some human rights or other kay poh activists will kick up a fuss, though I’m not holding my breath: They focus on things like ISA, capital punishment, FT workers rights and other things fashionable with ang moh social activists, not with the concerns of median S’porean wager earners.
So here’s hoping Tan Kin Lian of Fisca will organise a protest or write to the press to highlight the loss of this scheme; or for Uncle Leong to get Mrs Chiam to ask in parliament that the the competition authorities investigate whether there was undue pressure to remove the offer. Note that the agents’ trade union emphasised that “All financial advisers are free to offer their competitive deals to their customers. We believe that in such an environment, consumers will ultimately benefit in terms of both quality of advice and pricing.” Ya right, so how come no one offers to give such big rebates, and why the bitch to Fundsupermart when it cut its commission rates?
Doesn’t smell right, does it?
Meanwhile, three cheers to ST for highlighting this issue.