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 regards 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. In fact, once of the most common question asked among insurance agents and financial advisors in Singapore is, “how much more do you need to hit MDRT”. This question certainly shows how important the MDRT is for finance professionals in Singapore.
How Do Insurance Agents And Finacial Advisors Qualify For The MDRT?
The MDRT have global standards that have to be met in order for finance professionals to qualify. According to MDRT, Singapore agents are required to achieve S$124,100 of first year commission for 2017 in order to qualify for the MDRT. In addition, MDRT 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 in 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 tend to lead to higher commission, 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.
#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 are a tedious way of getting new clients. If you meet an MDRT member, there is a good chance that you met the individual through way of an introduction, rather than for you to have met the person on the street.
As with all businesses, word-of-mouth referral is always the best form of marketing. This applies as well to the financial advisory business where trust is an important commodity. An MDRT member is more likely to have a larger share of referral business, which could be a testimony to the quality service that he or she provides. Do note though that is a generalisation and may not always be the case.
#2 Clients with higher net worth
Higher net worth individuals tend to buy more expensive financial products. Their term life coverage can easily exceed $1 million or more while whole life insurance plans and other investment products they buy can see hefty premiums being paid.
Look at it this way, the same agent who provides the same quality advice to two individuals that have differing net worth will stand to make different level of commission. Quality sales advice to an individual who makes $30,000 per annum may translate to a commission of $1,000. The same high quality advice to an individual who makes $300,000 per annum could translate into a commission of $15,000.
That’s the reason 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. Time and energy invested into advising these people are more likely to translate into higher expected earnings for the future, as compared to advising an individual who is less well off.
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 likely to be highly sought after by insurance companies due to his or her portfolio 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.
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