Premium financing - why banks always sell the same thing?

Premium financing, equity linked notes, dual currencies and universal life Have you wondered why banks always sell these same things to you?

This is Wilfred Ling. Whenever I get enquiries from customers who have dealt with the banks, they often feedback to me that they did not feel comfortable. They feedback to me saying that premium financing, equity linked notes, dual currencies and universal life are products that are not comfortable with.

What is meant by uncomfortable? My client said that they felt that they were being sold a product. So, what is meant by being sold a product? And what is the difference as compared to buying a product?

You see, generally people - like yourself - like to be in control. That is to say that you want to be in control of buying a product. To be sold a product means someone else is controlling you. And how could someone be perceived to be controlling you? You felt you are being controlled when you feel pressured or that you have not been understood.

However, is being uncomfortable really just a matter of lack of control, pressure and lack of understanding?

As a professional financial planner, I totally understand how you feel and I want to give you another perspective by giving you an analogy.

When you see a doctor, how would you feel if the doctor simply prescribed medication to you even before performing any physical examination? What happens if you are told to go for brain surgery without any investigation?

This was probably what you went through.

You see, when a product is recommended to you without understanding you, it is like a doctor who prescribes medication to you without any physical examination. It is dangerous and you should rightly be uncomfortable.

Professional financial practitioners will conduct a thorough fact finding process. Fact finding means is to understand your financial situation such as your cash flow and commitments. However, what most financial advisers like the banks often missed out are what we called soft facts.

Here is an example of what is soft facts: Let’s say you are a person who will often ask your close buddies for their opinions before making a decision. This implies that you will never make a decision on the spot. Hence, anyone one who pressures you to do so would be stepping on your toes.

So, what should you do when you are uncomfortable and pressured into buying insurance products with premium financing, equity linked notes, dual currencies and universal life ?

My advice to you is to seek professional financial advice instead of engaging someone who lacks the skill in fact finding and understanding you as a person. I am sure you agree with me that you have no desire to be recommended for brain surgery when there is no prior understanding of your situation.

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