According to The New Paper in Singapore, those people in the financial services industry – the insurance agents and the unit trust consultants – are seeing their monthly income drop by as much as 30 percent as their customers are fighting shy of making new investments as the global markets continue to reel. Big pay cut for agents despite longer hours, that’s what the headline says. Before you continue to the story, I have to say that it’s not only Singapore that’s facing this challenge. It’s also very clear that people in Malaysia are concerned about how the economy is shaping up. The future remains uncertain. Anyway, here’s the story:
MENTION ‘unit trust’ and ‘insurance products’ now and most people are likely to shake their heads.
With the public avoiding such products in the current global financial fallout, it is not surprising that those who sell these items are taking hefty pay-cuts. Bank executives and insurance agents told The New Paper on Sunday that they have seen their monthly income drop by as much as 30 per cent.
A 28-year-old relationship manager who works in a foreign bank said that 60 per cent of her clients had stopped investing with her. This immediately caused her monthly pay of over $10,000 to drop by as much as $5,000. She said: ‘This crisis is worse than when the tech bubble burst in 2000 and tech stock prices took a plunge.’
Another relationship manager at a foreign bank, who wished to be known only as Goh, has seen 10 of his customers terminating their investments since Merrill Lynch’s collapse. Goh, 26, who has taken a $300 pay cut on his basic salary, said: ‘It is harder to do business these days. There is so much fear in the market, people keep getting edgier.’ One of his customers, he said, has split her $100,000 in savings among five banks as a precautionary measure. Despite this, he considers himself lucky as other managers have been sacked for failing to meet their targets.
Goh, who said that a relationship manager typically has a $1 million monthly sales target, added: ‘We are constantly pressured for numbers, such that there is a fine line between keeping to our morals and meeting targets.’ He said that, for example, in trying to meet sales volume, some in the industry may not provide customers with certain details or the full picture when they are selling financial products.
Kenneth Liu, 28, a relationship manager at a foreign bank, agreed that times are ‘very bad’. ‘It is difficult to even retain customers who make deposits at the bank.’ However, he has not suffered a drop in his income, because he is making up for the loss in revenue by focusing on other bank services such as loans and personal deposits. He is also working a few hours longer each day to keep earning the same commission as before.
Another business analyst at a foreign bank, who gave her name only as Miss Yeo, reckoned that her chances of getting a permanent position with the bank – she is on a temporary contract – were slim given the uncertain economy. The repercussions are not only felt by bank employees, but also property agents and insurance agents.
Jerlyn Ong, 23, an insurance agent with Prudential, has seen her income fall from $2,200 to $1,800 just over the last month, despite putting an extra five hours at work every day to meet her sales target of eight policies a month. She said: ‘These are really bad times. It’s very hard for us to sell products as even big companies like AIG can be in trouble. My colleagues have many clients going to them to pull out their policies, because everyone is saying that it is not safe to put their money in insurance.’
A veteran insurance agent, who wished to be known only as Tan, is more sanguine. Tan, 58, said: ‘Buying insurance is a must. People must prepare for disasters and mishaps. With so much uncertainty in the market, it is even more important for them to buy insurance.’
Property agents are also reporting ‘more cautious’ investors. Just this week, it was reported that private home prices in Singapore fell between July and September, the first time in over four years. PropNex’s director Mohamed Ismail said that many property investors are waiting to see how the situation in the US is going to affect Singapore. Ismail said that business at his company has taken an overall dip of 30 per cent compared to last year, with condominiums in the Orchard Road area down by 50 per cent in transactions.
But there are opportunities aplenty to do well during bad times too. Goh said: ‘I’ve received so many calls from worried customers who tell me that their relationship manager is not contactable. Now is the time when I want to put in that extra bit of effort to retain my customers. It is times like these when I can build trust with them, so that they can also trust me with big investments in the good times.’
This article first appeared in The New Paper on 5 Oct 2008.