Insurance activist Lai Yan-cheong: sales tactics are wrong

A member of Hong Kong's first anti-insurance product activist group, Lai Yan-cheong, used to work as an insurance agent in the US. He moved to California in 1992 and found work selling insurance to corporate clients.

Returning home in 2005 he worked at AXA promoting pensions through direct selling from 2006 to 2010.

He said he "soon realised the standard of application procedures, client approaches, management is pretty loose" in Hong Kong compared to the US.

Lai left AXA to join insurance broker Centaline but felt disillusioned by the sales tactics. "Advisers only tell their clients part of the story," he said.

While at Centaline he started a Facebook page to educate consumers about ILAS products.

"The entire ecosystem of the agent model is wrong," he said. "It is too easy to be licensed. That is why you have so many of them on the street."

He advocates making it harder to get licensed. Aiming to lead by example, he is now applying for a licence for his own brokerage. "I will focus on selling low-fee products," he said. "You can still make good clean money."

Instead of ILAS he will encourage clients to save via the voluntary section of their Mandatory Provident Fund plan. Unlike the mandatory part where contributions are locked up until retirement, money saved into the voluntary section of the MPF plan can be withdrawn at any time and the fees are much lower.

Another member of the group, 29-year-old Lindell Lucy, has been campaigning on behalf of his girlfriend for compensation from Convoy Financial Services. He claims Convoy's broker mis-sold his girlfriend a series of insurance policies.

Lucy wants commission-based products banned in Hong Kong, as has been done in Australia and Britain, and the introduction of an investor's licence.

"I believe individuals shouldn't be allowed to invest in any expensive, complex, or volatile financial products unless they have proven they can do it safely just like they have to pass an exam to get a driver's licence," he said. "This is a very reasonable idea that would only be opposed by greedy b******s who have made a career out of swindling people."

The group has now begun lobbying the government and regulators. Their message to the industry: watch out.