Insurance companies keen to grab client details of independent financial advisors

Insurance agencies are providing incentives to IFAs to get your contact details—everything from emails to cell phone numbers

You trust them with your money, you have faith in them as they will guide you to the right financial path, you believe in them as they are completely independent and loyal to their clients. These of course are your independent financial advisors (IFAs). However, we now learn that some of these IFAs are being wooed by insurance companies to part with your contact details.
Companies like Reliance, HDFC Life Insurance, SBI Life Insurance, Aviva Life insurance, Birla Sun Life Insurance and other insurance majors are understood to be inducing IFAs with incentives to get contact details of clients. These are either meant to locate new customers for unit-linked insurance plans (ULIPs) or, simply to poach customers from other insurers.
An IFA gets paid for his co-operation in providing other details of a competitor’s clients to an insurance company. All your details, right from your telephone numbers to email IDs, even residential addresses, are also provided to the insurance company.

This is all part of a desperate attempt by insurance companies to keep selling ULIPs after a very public brawl between the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA) brought ULIPs sales down to a trickle. Thanks to that imbroglio, many ULIP customers are worried about their investments and are having second thoughts of continuing with premium payments for a product plagued by high default rates. Insurers are trying to reach out to existing and potential customers to dispel doubts and fears.
Secondly, insurance companies need to find other ways to bring in new customers. It is not clear whether they can launch new ULIP products before the courts pick the winner of the SEBI-IRDA fight; so they have to sell more to their existing customer base and need to interact with them directly. Or they have to incentivise IFAs to lure investors from other insurance companies.
“Insurance companies have often come to us to either sell their ULIPs or ask for our contact list in order to create a greater database to sell them directly to the clients,” said a certified financial planner who wished to remain anonymous. He calls this “a routine affair.”

These deals are obviously not done transparently. “There is no paper trail or a black-and-white agreement,” says Neeraj Bahal, a certified financial planner (CFP), from Fasttrack Investments. Usually, an executive from an insurance company would meet an IFA and tell him about a chance for him to make some money by parting with his clients’ details for a fee. Depending on the deal, the IFA will either part with the data which the insurer uses to contact a potential customer; or, in some cases, the insurance executive will actually accompany the IFA to client meetings to sell a product. This enhances the credibility of the insurance product being sold.
We learn that many IFAs who sold mutual fund products are tempted by the kickbacks from insurance companies after their business was hit by SEBI's ban on entry loads. "Since mutual fund commissions were dwindling and distributors were affected, it created an opportunity for the sales of ULIPs,” said Harish Mohan, managing director, Time Financials (Chennai).

Some distributors have a different perspective. Jayant Vidwans, president of the Society of Financial Planners said, "Sharing of data with various organisations is not wrong.”
Not all IFAs are jumping in to grab the money. “If he is a serious advisor then he shouldn’t be selling his clients’ details. He shouldn’t do that as this is his bread and butter,” says Sumeet Vaid, founder and managing director, Freedom Financial Planners.
The function of an IFA is to provide the best possible financial option for his clients. However, when an IFA’s conduct is influenced by incentives, he becomes just like any other insurance agent and clients’ interests are compromised.



Srikanth Matrubai

6 years ago

What more can you expect from these Insurance companies who continue to milk the investors money dry, especially when they are backed by a "rubber stamp' IRDA chairman??

The IRDA chairman is more interested in protecting the interests of the Insurance companies rather than the investors


6 years ago

Its not so common thing,as I hv never been approached by any ins co for data sharing.But at the same time ifa's who are no more interested in distribution of mf,can only be lured by this.Serious ppl are not going to entertain ins ppl.

naveen mishra

6 years ago

Yes it is true that insurance companies are luring IFA of mutual funds companies to share their data with them.


6 years ago

Realy this is shocking news. aisa agent and company ko to hamesha ke band kar dena jaruri hai, taki aur koi company aisa kuch kare nahi


6 years ago

Insurance Co. bashing has been the new story (after Ipl) in print & electronoc media for the last few months. Be it commissions on Ulips, Regulatory fights etc. & so now its data collections. Weird you have nothing to write about now that u are writing about things which have been prevalent for ages in all industries in some form or other. Grow up & write responsibly.


6 years ago

Seriously, are you guys living in the same planet as we are living? What's this sanctimonious take on the data collection drive by the insurance companies? Every body and their uncles are doing this from a long long time. Data from banks, housing finance companies, credit cards etc., are on sale from a very long time and if you have woken up just now to write this piece of STORY, then I sort of pity you guys!!!

And I dont get this holier than thou attitude when it comes to insurance agents/advisors and mutual fund distributors. Aren't colas, Pepsi or Coke, bad for health? Isn't eating junk food like KFC chicken or McDonald's burger bad for health? Doing insane stunts on two wheelers which may cause life threatening accidents? Last time I checked, all these categories were advertised on national media and they were advertised big time. Does it mean they are wrong???

I think you should seriously rethink on your strategy of writing on insurance and mutual fund advisors. You have milked your cow dry, any more weaning will be pointless!


6 years ago

Shocking story. It's disgusting that top rung companies are resorting to such malpractices.

Completely agree with what Sumeet has to say. I am amazed with Jayant Vidwans' (president of the Society of Financial Planners) view that it is okay to share data. Being a CFP myself, it is shameful to hear fellow planners agree with this malpractice.

Selling your client's data for short-term personal gains shows complete lack of ethics and client's privacy.

CFPs should be the first people to condone such actions and not support them and bring disrepute to the profession.

Hemant Beniwal

6 years ago

Ganda hai par dhanda hai ye.....

A slippery slope

As we predicted, a fresh downturn may have started

The market recovered from its early low, taking a cue from European markets. The Sensex ended at 16,835, lower by 159 points (1%) while the Nifty shut at 5,060, down by 33 points (0.6%). Bourses plunged sharply in the early morning session on the back of weak Asian markets. The market traded range-bound till mid-morning when it touched an intraday low of 16,551. It staged a solid recovery in the afternoon session paring most of the early session’s loss.

Asian markets were down on Monday on concerns over the economic recovery of the eurozone and weak US earnings data, dampening investors’ appetite for risk. Key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by 0.77% to 5.07%.

US stocks were down on Friday (14th May) on weak earnings from retailers, Senate backing for limits on credit card fees and concerns over the sustainability of European public debt. The Dow was down 163 points (1.5%) to end at 10,620. The S&P 500 was down 21.76 points (1.8%) to 1,135.6. The Nasdaq was down 47.5 points (1.9%) to close at 2,347.

The World Trade Organisation (WTO) said that the Doha Trade talks should be pushed forward to help countries emerge from the global economic crisis. The International Monetary Fund (IMF) said that some countries should control their expenditure; however, large economies can wait till 2011. 

Gold prices are on a rise as investors, worried by the debt crisis in the eurozone, are taking refuge in the yellow metal. Purchase of gold-backed exchange traded funds has sent the yellow metal to a record high near $1,250 an ounce this month.

Back home, Foreign Institutional Investors (FIIs) were net sellers on Friday, offloading stocks worth Rs381 crore. Domestic Institutional Investors (DIIs) were net buyers of Rs164 crore. The rupee was down on the weak equity market and strengthening of the dollar against the euro.

Larsen & Toubro (L&T) (up 5%) has posted growth of 28% and 31% in sales and operating profit in the March quarter over the year-ago period. At the end of the March quarter its order book stood at Rs1 trillion. The board has recommended a dividend of Rs12.50 per share (in the previous year, it was Rs10.50 per share).

Reliance Industries (RIL) (down 2.6%) and SIBUR, Russia’s leading petrochemical company, have signed a memorandum of understanding (MoU) to set up a joint venture in India. This new joint venture will produce butyl rubber at RIL’s integrated petrochemical site at Jamnagar in Gujarat. As per the agreement, SIBUR will provide proprietary technology for butyl rubber polymerisation and its finishing while RIL will supply monomers and provide the JV with world-class infrastructure and utilities.

McNally Bharat Engineering Company (down 4%) has received orders for design, supply, erection and commissioning for a power project in Tripura for a total value of Rs9.91 crore. The scheduled time for completion of this project is 17 months. The second order is for another power project in Tripura for Rs17.27 crore. The scheduled time for completion is 18 months.

KSK Energy Ventures (up 2.4%) has announced the commencement of power generation from the first 135MW unit (out of four such units of 135MW each) of its 540MW coal-fired project in Maharashtra.


Industry ministry proposes 74% FDI in defence sector

Only 15% of India's defence equipment can be described as state-of-the-art and nearly 50% is suffering obsolescence, according to the Department of Industrial Policy and Promotion

The industry ministry today proposed foreign direct investment (FDI) up to 74% in the defence sector from the present 26%, stating urgent upgrade of equipment in the armed forces was needed as a bulk of them suffered from obsolescence, reports PTI.

The Department of Industrial Policy and Promotion (DIPP), however, said the hike in FDI need not mean any commitment on procuring from companies, which have set up the facilities in India.

"There need not be any commitment on procurement and these players will have to participate in the request for proposal (RFP) to technically qualify and also compete in the financial bid," DIPP said in a discussion paper.

It has sought views of different stakeholders till 31st July this year.

"Only 15% of India's defence equipment can be described as state-of-the-art and nearly 50% is suffering obsolescence...there is, therefore, an urgent need to enhance the deterrent and the operational capabilities of the armed forces...," the DIPP added

Since the entire issue has been placed in the public domain, the DIPP clarified that the suggested policy should not be construed as the firm views of the government.



Shadi Katyal

6 years ago

When one reads such statements one wonders if we do live in 21st century or still under some colonial rule.
If the Defence department will not buy any products of quality from such companies,. why should they invest in a nation where left hand desnot not know what right is doing.
Maybe there might not be any bribery which could be collected from abroad without bringing money into India.l
The nation if it wants to be self sufficient must bring in private sector and let them compete as is done in USA. Let the private companies do research and provide the best equipment instead of laying the conditions ahead.
We have spent or rather wasted on our fighter and tank and still have no product to name one. How long we going to live with cave mentality and not move ahead.
India unfortunately is being run not by patriotic people . What a shame.
Maybe we could have learnt from China experiment but than we feel so hurt if such ideas are given.
Will India be self sufficient by 22nd century???

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