SINGAPORE - New kid on the block AIA Financial Advisers (AIA FA) is on a hiring spree for agents, with Great Eastern (GE) the latest casualty in the ongoing poaching battle among insurers. Sources said the buyout offer from AIA FA for GE's 300 plus agents - who operate under the so-called Advisors Alliance Group (AA) - amounted to S$100 million.
It is believed that AA's founder and GE's senior executive director, Mr Tan Koon Chuan, is himself leaving GE for AIA FA. An insurance veteran, he joined GE 40 years ago in July 1977.
Last month, Mr Tan shared details of the buyout offer from AIA FA with his 400 agents. It comes with upfront cash bonuses and a five-year "bond" period where the monetary incentives could be clawed back if their sales quotas were not met. It is believed that more than 300 GE agents have decided to cross over to AIA FA while some declined.
When contacted, AIA FA's chief executive, Mr Tan Chuan How, said: "AIA FA adopts sound recruitment practices to protect consumers' interests and strongly advocates that packages offered to experienced representatives should be commensurate with each individual's qualifications, track record and experience."
AIA FA's Mr Tan said that it has been receiving strong interest from "a diverse range of candidates" who are keen to join AIA FA.
"This includes our own AIA tied agency, professionals within the financial industry and career switchers new to our industry," he added.
GE said that "some agents recently tendered their resignations". However, it declined to comment where they moved to.
"Our priority is to ensure that our affected policyholders' interests remain protected as we continue to deliver the best service and trusted professional advice. We will continue to invest in our strong established distribution channels to further grow our business," it said.
The practice of buying out agencies has been ongoing for several years as insurers race to drive growth by expanding their agency force amid intense rivalry. It typically involves insurers and FA firms trying to outbid each other to woo high performers and their teams over by offering higher and more tempting sign-on deals with up-front lump sum payments and bonuses.
Financial experts do not view this as a positive practice as it may result in potential mis-selling by the agents who are under pressure to deliver their sales targets. When that happens, consumers will be the ones who get the short end of the stick.
A wholly-owned subsidiary of AIA Singapore, AIA FA will begin operations in the fourth quarter of this year. It is set up to expand AIA's distribution channels and complement its large agency force. AIA FA will offer AIA's suite of life and selected accident and health plans at the start and may introduce other solutions to complement existing product offerings to customers in the future.
Other players including Aviva, GE and Manulife have set up their affiliated financial advisory firms as a means to cater to consumers' preference for choice. However, not all of these financial advisory firms allow their representatives to offer third-party products.
The exodus of 300 plus GE agents to AIA will dwarf last year's mass resignation of 250 agents at Peter Tan Organisation (PTO), the biggest group of agency units at Prudential Singapore. Led by PTO's founder Peter Tan, the group was poached by Aviva.
