Choose your financial product carefully

Dear Mr Tan,
I have been curious about the development of banking industry and insurance industry for the past decade. Since the two industries evolve and expand their line of business, I can see the overlapping of the products offered by the two industries. I can choose an insurance company or a bank if I want to buy investment fund, securities bond or even insurance.

What are the main differences between these two industries? Maybe in terms of operational aspect, insurance companies tend to stick with agent-based customer management. However, I don't see much different in terms of investment product offering.

What do you think the competitive edge for both banks and insurance companies, in terms of service diversity, service level, financial power, reliability?

REPLY
It is more important for you to know if the product is designed to give good value to the customers. Unfortunately, many financial institutions design products to have big profit margin for their institutions, often at the expense of the customer. They pay high commission to their agents and distributors. The customer gets a poor deal, after deducing the expenses and profit margins.

It is better for the customer to invest directly in stocks and bonds, especially in low cost, diversified funds. Read my views in www.tankinlian.com/faq