The practice of buying out agencies has been ongoing for several years in Singapore, as insurers race to grow their agencies amid intense rivalry, reports local newspaper the Straits Times.
It typically involves insurers and financial advice firms outbidding each other to woo high performers by offering sign-on deals and up-front payments and bonuses.
The practice is viewed dimly by financial experts, however, due to the potential mis-selling by agents who are under pressure to deliver sales targets.
The offer from AIA FA reportdly comes with upfront cash bonuses and a five-year ‘bond’ period where financial incentives can be clawed back if advisers fail to meet sales quotas.
"Customers are more financially savvy and expect more access to professional financial advice."
The founder of Advisors Alliance Group and GE’s senior executive director, Koon Chuan Tan, is understood to be making the move to AIA FA, having joined GE in July 1977.
Tan reportedly made the offer to his 400-stong team in August, with some opting not to make to move.
New kid on the block
AIA FA was launched on 31 August 2017, as part of AIA Singapore’s move to strengthen its distribution network.
It is being marketed as a financial advisory firm that complements the firm’s existing tied agency distribution channel.
AIA FA will offer AIA’s suite of life and selected accident and health plans from the fourth quarter of 2017. It may offer other solutions in future.
The new advice arm will be led by Tan Chuan How, a 19-year veteran who played a key role in growing and developing AIA Singapore’s tied agency distribution channel.
He has held several key roles at AIA Singapore including being head of recruitment, head of investment-linked policies business and, most recently, senior director of agencies at AIA Singapore.
“In today’s digital age, customers are more financially savvy and expect more access to professional financial advice. The new AIA FA is well-positioned to empower individuals with personalised and quality financial advice,” said Patrick Teow, chief executive of AIA Singapore.
