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Anonymous

27 Sep 2019

Insurance

Should I pursue a career as a real estate salesperson or an insurance agent?

Hi! I used to work as a project manager for a couple of years in a creative agency, but I would now like to try a role in sales as I enjoy connecting with people and I’m looking to try something new. I can’t quite decide if I should go for the real estate exams or insurance? I thought of trying them both but apparently you can’t keep two licenses. Thanks!

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Fergus Tan

25 Sep 2019

Senior Partner at Vision Advisory Management

Yup, you're right in that you can't have 2 licenses.
The 2 markets are really quite different, and within the markets, there is also segmentation.

In the real estate space...

You basically transact in property. The 2 biggest types would be new launches and resale. In the space of new launches, you can either spend time at the show flat, or you can go out to give flyers, form networks with other agents to co-broke, or to look towards managing a team. In the financial planning context, it's like roadshows.
For the resale market, there are different areas of specialisation. Broadly speaking, rental and sale transactions. Rental is like your bread and butter. You can do multiple cases in a month easily, but you get approx 1 month of commission, so it can be $500 to 5k per transaction. In the case of sales, they are likely to be lumpier... Ie, you get a transaction done every 2 weeks if you are super good, or maybe 1-2 months. A $1mil property would potentially net you 1-2% of commission, or $10-20k.

So from here, you can see that real estate tend to be lumpier, but the payoff is good. The 2 other unique factors are that 1) Most agents are on the open listing. That is, you can work really hard for 1 month to promote a property, but another agent gets the deal done. You get nothing. 2) Real estate is more about just marketing and promoting. You can't really change the terms much. Some people on the buyer representation might do home staging, more complex negotiation, etc. But more or less, you don't do much planning per se. More of how many people can you reach and how fast.

There are some groups that may focus on investment property, where you do the planning and all that. There are also groups who focus on non-residential, like commercial or industrial. In those cases, the work is totally different. Most of the time, it can even be a pure office hour kind of work.

Financial planning as a whole consists of many areas also. You have tied agencies like prudential, great eastern, etc.. You have boutique FAs, usually smaller than 100 pax, who tend to have their own chacter, and you have the larger FAs like Finexis, PIAS, Manulife FA, just to name a few.
In financial planning, there are also many ways of doing it. Some agencies may do a lot of cold markets. So you would see the roadshow gang, the street prospectors, the door knockers. Usually, the growth path for this group is to do volume cases a year and then second year rinse and repeat. Third year, become a manager and teach them to do the same. The problem is you don't get growth in a skillset that much.

Some might do more warm market/referral style business. In this case, it is possible that a financial planner only have less than 100 regular clients, and they would consistently buy policies from the same person over the years.

Lastly, you also have the niche groups. Some are fee-only planners, where they are almost like trainers but they do it on private consultation. There are also some who deal with a certain focus like estate planning etc.

The first biggest difference is the earnings cycle.

In financial planning, it is physically possible to do 3 cases a week. So income can be consistent. In property, doing 1 case a month is more likely.

In financial planning, disregarding the roadshow folks, you are more likely to build a deeper relationship with a client/prospect. You are likely to be good at rapport building and getting referrals. In the case of property, realistically people will change agent regularly and that's even if you transact more than 3-5 times in your lifetime. Referrals are tough, simply because if someone wants to sell a house and they ask for trustable agents, there will be tons of agents referred to them.

Lastly, the business is different. Property is more passive. You can do a lot, but it is more buyer-driven. When someone has a need, they will search out. Financial planning is more active. You are more likely to be actively promoting yourself and asking people to meet up. Of course, towards the latter years, you might have more passive referrals, but more often than not, the property is bought, insurance/investment is sold.

You would have to ask yourself what kind of person are you like, and which product you are more likely to resonate with. There will be a similar proportion of people making good money, so it really boils down to personality.

PS: Joining a good team is very important. I can't stress that enough.

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Lim Boon Tat

21 Sep 2019

Mathematics at Cambridge University

Let’s view this from a “complexity” point of view. For any transaction to take place, you need a seller, a product, and a willing buyer.

For properties, you will need to secure a seller (word of mouth, flyers, advertisements), arrive at a reasonable selling price, and then go hunt for a buyer (advertisements on propertyguru perhaps). This process has many more stages, but the ticket size of each transaction is high. For each property, it’s likely you will have to study in-depth on how to sell it (unless you specialize in specific estates: which is what some agents do).

For insurance, you basically already have a set of well-regulated products ready for a sale (and plenty of “case-studies” of your colleagues successfully selling the EXACT same product at EXACTLY the same price-point).

Let me know what you think.

Cedric Jamie Soh

20 Sep 2019

Director at Seniorcare.com.sg

What's your age and end-goal?

Sales-related jobs are great in income and can be quite stressful an...

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