Hornmerchant's BLOG

There are two types of self-serving Insurance intermediaries – Online Portals and Insurance “Salesmen”. Each of these are broadly of two types again. Two types of Online Portals are – Aggregators, earning referral fees and Brokers earning commissions. Online portals are too focused on conversions and quick sales than understanding the customer needs, educating the customer etc.; well online portals are not built for that kind of high-touch & personalized engagements. Then, two types of Salesmen are – Sales Staff of Banks or Sales Executives, earning incentives, lured by pay hikes/promotions and Individual Insurance agents earning commissions, lured by foreign trips etc. These salesmen too are too focused on achieving their personal sales numbers than what is best for the customers. A disclaimer to clear any smallest doubt – No, I don’t mean all of them are same; not all are bad. Then there are media houses, bloggers, vloggers, influencers earning th r ough ads or/and referral f...

It is well established that separation of 'Financial Advice' and 'Financial Product Sales' is a great idea to avoid conflict of interest. Mixing both, that means advice from a product seller, may not always be unbiased. Paying fees for advice only, (where adviser gets paid by the client only and won't earn any commission or remuneration for the products he /she recommends) indeed is a great idea logically. Sometimes (rather most of the times!) we humans don't behave logically. I see three types of people: Majority - reactive people,  who need to be chased to do get them buy and renew their Insurance policies or start and keep the SIP going;  Minority - people who get the financial plan and advice by paying fees and then get too busy with their work that it keeps them postponing the implementation of plan / advice for eternity;   Rarity - proactive people who plan and implement meticulously. Financial Advisers add little value to the rare proactiv...