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Million Dollar Round Table (MDRT): What Does It Mean For Agents To Get In?

Is an MDRT agent necessarily better than a non-MDRT agent?

The Million Dollar Round Table, also known as the MDRT, is a global association that recognises top performing life insurance agents and financial advisors around the world.

Members who qualify for the MDRT are typically held in high regard by their peers and are seen as the top achievers in the life insurance and financial services space. As a global association, the prestige offered by the MDRT is not lost among life insurance agents and financial advisors in Singapore.

Every year, thousands of finance professionals in Singapore strive to qualify for the MDRT. But what exactly does it represent?

How Do Insurance Agents And Finacial Advisors Qualify For The Million Dollar Round Table (MDRT)?

The MDRT has global standards that have to be met in order for finance professionals to qualify. According to MDRT, Singapore agents are required to achieve S$72,400 of first-year commission for 2023 in order to qualify as a member for the MDRT. There are also higher tiers as well such as Court of the Table (S$217,200 in first-year commission for 2023) and Top of the Table (S$434,400 in first-year commission for 2023). It’s worth noting that the commission required to qualify as an MDRT member in 2023 (S$72,400) is actually lower than what it was in 2017 (S$124,100) when we first published this article. In fact, the commission requirements for the three categories have been trending lower over the past three years.

Here are the requirements as published by MDRT for 2023

Year Qualifier Member Court of the Table Top of the Table
2023 Commission S$72,400 S$217,200 S$434,400
Income S$125,400 S$376,200 S$752,400
Premium S$217,200 S$651,600 S$1,303,200
2022 Commission S$79,000 S$237,000 S$474,000
Income S$136,800 S$410,400 S$820,800
Premium S$237,000 S$711,000 S$1,422,000
2021 Commission S$69,900 S$209,700 S$419,400
Income S$121,000 S$363,000 S$726,000
Premium S$209,700 S$629,100 S$1,258,200
2020 Commission S$110,800 S$332,400 S$664,800
Income S$191,900 S$575,700 S$1,151,400
Premium S$332,400 S$997,200 S$1,994,400

In addition, members are also expected to meet ethical standards in order to be part of the MDRT.

There is a common perception among sceptics that MDRT members are simply those who are good at selling products that give high commissions. These include Investment-Linked Policies (ILPs) and Endowment Plans. The logic here is simple. Selling these products that have higher premiums tends to lead to higher commissions, which in turn makes it more likely for agents to qualify for MDRT membership. MDRT membership is after all, largely based on achieving commission targets.

While this puts MDRT members in a negative light, there are a few other ways consumers can look at MDRT members and their achievements. Here are two factors that are worth considering.

#1 MDRT members are likely to be those who have more referral customers

Finding people on the street to sell them insurance and investment products is a tedious way of getting new clients. If you meet an MDRT member, there is a good chance that you met that individual through a referral, rather than as someone who was canvassing on the street.

As with all businesses, word-of-mouth referral is always the best form of marketing. This also applies to the financial advisory business where trust is an important commodity. All things being equal, an MDRT member is more likely to have a larger share of referral business, which could be a testimony to the quality of service that he or she provides. Do note though that this could also be a generalisation on our part and may not always be the case.

Read Also: Conflict Of Interest In The Financial Sector And Why It Should Matter To Us

#2 Clients with higher net worth

Higher net worth individuals tend to require higher insurance coverage, and thus, may purchase insurance policies that provide higher coverage with higher premiums. Their life coverage can easily exceed $1 million and they may also purchase other investment products with hefty premiums being paid.

Look at it this way: the same agent who provides the same quality of advice to two individuals that have differing net worth will stand to make a different level of commission. The sales advice to an individual who makes $30,000 per annum may translate to a commission of $1,000. However, the same high quality advice to an individual who makes $300,000 per annum could translate into a commission of $10,000.

That’s why most agents are likely to spend more time with high networth individuals, or young individuals who they think will become financially successful in the future. These individuals may also have more complex requirements that require more in-depth advice and expertise. Time and energy invested into advising these people are more likely to translate into higher expected earnings in the future.

This may not sound fair but it’s just the way the world works, especially with the commission based system that we are operating in. Once you understand how the MDRT works, you can gain a better appreciation of what it represents.

An agent who qualifies for the MDRT is a top achiever in his area of work and is likely to be highly sought after by insurance companies due to his or her portfolio of clients. That, however does not automatically mean that the person is necessarily better for you, compared to another agent who is not part of the MDRT.

So while agents may carry MDRT membership as a badge of honour on their name cards, our recommendation is to go with someone whom you can trust, and who puts your needs ahead of their own sales target, regardless of whether or not they have MDRT.

Read Also: Insurance Agent Vs Independent Financial Advisor Vs Personal Banker: What Is The Difference?

This article was first published on 24 July 2017 and has been updated to provide the latest information.