My colleagues and myself carry almost 95% of the life insurance, general insurance and unit trust available to the retail market.
There are reasons why although a product from one company may look cheaper n better but we choose not to recommend it especially for general insurance such as travel insurance or personal accident plans. I dare say commission is usually not the main reason cos the commission across companies are the same and it’s peanuts regardless what we choose.
One main reason is the ease of claims or the ease to speak to a human being after-sales service. As a financial adviser, our job do not end when you buy. On the contrary, our job starts when you buy because that’s why a claim is likely to happen. Neither the client nor financial adviser likes to make a claim from the minor issues such as travel delay to a major one such as death claim. As a financial advisers, we super-duper hate making claims cos the client is making one claim but we are assisting to make multiple claims from different clients. We really appreciate a company that pays out claims without asking too many questions. Once, a claim officer asked questions to & fro 6 email correspondences asking silly questions over a claim of $500 despite providing them with all document necessary for claims while another claim of same nature with another company made at the same time had paid out a week earlier! My 7th email to them was to tell them if they cannot afford to pay, just close the file and don’t pay. As these insurance companies are still our partners at the end of the day, we refrain from speaking bad about them and the best we can do is not to recommend that company’s product.
Recently, I did a review for a long time friend and suggest a change of personal accident from Company A to B. The friend decided to discuss with his insurance agent from Company A who sold him the plan and later told me he will stick with it. I asked him why and the reply was ” The agent said Company A is easier to claim.” My reply was,” I am able to do both Company A & B on top of many others. I had claim from both company A, B & the few others to know who is easier to claim. Have your insurance agent tried to claim from Company B before?? If not, how is he suppose to know Company A is easier?” I could had counter-proposed to say I am able to sell Company A’s product too. Why not place it under me but I choose not to cos I don’t deal with difficult claims. I leave the choice to him.
I trust my fellow Independent Financial Advisors to do the same as me cos we have the choice to choose the better solution for our clients.