Monday, March 2, 2009

Are agents your friends?

Now-a-days I am able to see agents for everything. we will see about the finance agents here. Certainly, they will get some commission for being an agent, because they have knowledge.

From 1% for PPF account to big fat percentage of your premium amount in insurance policies. The maximum percentage is given for opening an ULIP account, if I am not wrong.

I have money. I want to save tax. The deadline is nearing and I get a call from *tax saving* agent. I am saved. Are you really saved?? -- Read on.
He explains about the benefits of the most *Hot* plan in the market and I am certainly excited to give the money to him in no-minute. I'd tell the *Hot* plan is *Hot* in the market, not because it is a great product, but because it is a great marketable product.

A great marketable product will have one or all of the following properties:
(1) A good percentage for agents every year(Most of the cases)
Why should one give you his valuable time/money for lesser gains? Think!!
(2) Alluring returns
You can easily see that this comes with high risks or only in paper.
(3) Extreme safety with less returns
Great stress on safety to such extent that you are contended with very small percentage of returns without any risk.

Lets see what you'd do if you were a agent. You know how much is my commission for every product. You know what are advantages and dis-advantages in each product. (Most of them actually doesn't even care about the products that they don't want to sell but are supposed to sell). So, you'd explain the great benefits of a marketable product which gives high commission rather than high returns to the investor.

There would be relatives and friends immediately after you joining the company. Just spend few minutes before you invest for years. Search about the product and your real requirement in the Internet (great source of information, Believe me!!!) and what ever you finalize, you put it through the agent/friend.

One more thing, now there is no Agent commission to be given by you, if you invest your money directly in any of the mutual fund company. Do you think your agent will ever tell this to you?