Thursday, September 11, 2008

Does Financial Success of Adviser = Capabilities?

One of my usual past-time is to read Newspaper and Financial magazines. Financial Advisers from different companies are frequently invited to give their views on specific case studies. These article sometimes introduce the adviser before or after their views are posted. Many times, the sales achievement are more emphasized than their qualification and experiences. One particular sales achievement they always emphasize is the MDRT or the COT. They always emphasize this Adviser "XXX" achieved the MDRT XX years consecutively and Life member of the XXX club of the company, etc. When they put qualification, they sometimes actually only holds a AFP or AFC, etc despite they being XX years in the business.

Are Sales acheivement of an adviser so important to a client? Does an MDRT or COT adviser necessarily be better than one with none to shout about? We always see these advisers faces being published by major newspaper and their clients probably see them as more professional than those whose faces are not published.

I was being questioned by a prospect this morning. She wants to vet through my own financial plan including net worth, investment and insurance portfolio before allowing me to even meet her. She might be looking for a financially stable adviser or is looking for an adviser who are able to walk the talk.

I din replied her well and I think I may not have a chance to plan for her after my negative reply. I was quite reluctant to show her my financial plan because my first impression is that she is trying to guage my capabilities by my financial success and why does she think that she can see my financial plan better than I do? I also do not want to show others my financial plan because it is definitely not a model plan that I'll like to show anyone. I'm only few months old in this FA firm. I do term insurance and RSPs more than a typical advisers and anyone want to guess my monthly cash-flow? Will you demand your doctor to see his health report before you go for a health checkup? The emphasis should be the process and not the person.

If your adviser have a net worth of few million, a beautiful constructed investment portfolio of few hundred thousands and an insurance portfolio with several thousands of premiums per month, does it means that he is a better adviser? Maybe Yes? Maybe No? For me, I work for my love of this job and the meaning I found in it. I'm not working towards MDRTs or COTs, etc. I will earn a modest income as time passed and pls don't guage your adviser by their financial success and sales acheivements.


Khiat Han Hwee Adrian said...


Please read TanKin Lian's blog, there is a topic on this issue.
Many times I have been told that mdrt or cot are awards invented by the insurance industry as targets to aim. Over the years this had degenerated into some kind of 'lottery' for insurance agents' personal gain and all the time at the expense of the customers. As a result agents only sell high commission products to earn enough to qualify for these awards. The customers' needs are sidelined and sacrificed because of the greed.
The good fianncial planners don't look at the awards anymore because they are dubious awards that lead to nothing good but abusess and malpractices..Companies which emphasise sales use these awards as benchmarks for their salesmen.

Anonymous said...

If you are not as successful as other people, you have to look at yourself why you are not.

A sucessful adviser does not mean he must be selling high commission products. A MDRT or COT adviser does not mean he or she is not ethical. Don't anyhow point finger.

Anonymous said...

MDRT or COT advisers will definitely stray into malpractice area .
Tell me how do they qualify if they put the interest of the cleints first.None of the MDRT or COT qualiffiers put clients' interest first but theirs first and their interest is to make lot of money and to qualify for mdrt and cot.
No way insurance agents who are only 'fit' to sell insurance products will ever recommend term insurance simply because these agents don't care about the needs of their cleints.
Mr. 1.25AM, it is either you put cleints' interest first or yours first...of course if you are NOT qualified at all to do insurance planning let alone other planning, it is better you leave the industry
before more clients are hurt by you because you are not qualified, ie. if you care and have conscience.
All mdrt and cot are UNETHICAL. If they dare to bare waht they have done for their clients and be examined I bet you $100 to a dough nut that they have been unethical in their dealings.

soon kiat said...

Sorry, may i know what is MDRT and COT?

Khiat Han Hwee Adrian said...

Hi Soon Kiat,

You may like to do a google search for the word MDRT. It stands for Million Dollar Round Table. COT stands for Court of Table. It is achieved by those who earns a targetted amount of insurance commission for each year.

Anonymous said...

It is your problem if you cannot acheive financial success. You choose not to be one and don't blame other people who achieved mdrt. Agents who don't do well are more prone to malpractice because they are more desperate for money.

Anonymous said...

12.00am, people who do well are likely malpractitioners, especailly those mdrt .You may be one of them if you sell revosave and vivolife together.

Anonymous said...

Anonymous 12:06, you are simply bias against those who did well. Those who acheived mdrt get it because they got their business strategy right and they worked very hard towards it.

Wealth Journey said...

I think the prospect just wants to see whether you are walking the talk. There are so many advisors out there asking people to buy and buy but you see they are poorer than you and their investment portfolio is in a total mess.

So, you can show her your portfolio and insurance policies but maybe cover the value of your portfolio.

This way, you can show her what you recommend to her is mostly what you are doing ,,, but she wont know ur networth.

But I agree that financially successful does not mean the advisor is ethical. It just means the advisor has closed more deals (could be ethically or unethically).

Anonymous said...

Skill of cheating is considered a learned skill. Many insurance companies train their agents the various art of cheating, from emotional exploitation, misleading and misrepresenting and cover up. Once you are good in all these you will be sure to become top producers and mdrt.
They specailise in selling whole life and endowment products or any product that carries high commission.
These products are the only products that can help them qualify for mdrt and help make more commission. MDRT is a about commission and how much you earned to qualify. Cot and TOT require more commission to be earned.
You can see the focus. For them it is waste of time to sell term or to do analysis. If they analyse they may not be able to recommend whole life products because the customers can't afford such big amount. Of course there are worse cheats who would dare tell their customers they need not buy all their needs at one go. They can buy some first and as and when they have money buy some more but buy only whole life and from them only when they 'review'. To insurance cheats 'review' means buying more WL only.Surprisingly the customers agree to this strategy but unknown to them they are going around with a time bomb.
These are the ways the successful mdrt , cot and tot cheats operate.
Oh yes, they work very hard to cheat too.This is the only credit I can think positively for these mdrt, cot tot cheats.They are the scumbags of society in a noble job.
Characteristics of cheat insurance agent.(apply to mdrt, cot ,tot agents)
1. unqualified
2. incompetent
3. dishonest
4. without conscience
5. well dressed
6. sweet talk
7. good looking
8.willing to do anything
9. lack knowledge
10. bullshitter
If sept 15 2008, 10.18am is unconvinced please do check the 'successful'agents you know against the above.


Anonymous said...

Sept.13 2008 1.25AM,
I bet you $100 to a dough nut that these mdrt and cot product pushers sold ONLY whole life and endowment products. Successful at the expense of their customers.
Tell me how to be a mdrt by selling terms.How to achieve mdrt by helping your customers? By dumping whole life and endowment on them to achieve their goals? Don't kid us..
MAS is coming after them anyway soon.