• Sat
  • Dec 20, 2014
  • Updated: 10:25pm

Insurance activist Lai Yan-cheong: sales tactics are wrong

PUBLISHED : Monday, 30 September, 2013, 12:00am
UPDATED : Monday, 30 September, 2013, 4:00am

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part where contributions are locked up until retirement, money saved into the voluntary section of the MPF plan can be withdrawn at any time and the fees are much lower.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.


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This article is now closed to comments

Danny Chiu
Could I have the link to the Facebook page please?
Lai Yan Cheong
Dear Ms. Rachel,
However, when trading funds or stock or ETF sounds too complicated for most people, MPF would be a simple choice.
There are currently 470 funds in the MPF platform. Please refer to the same statistics page 7.
I suggested you to get your self familiar with the relevant subject before you even entering into any debate.
Still, not much good for foreigners looking for Euro/GBP or other funds. And again, there has been much debate regarding the fees involved for the underlying funds
using a simple bank platform would be the much easier and cheaper option, but then of course there are no MPF advisory fees to be earned this way.
MPF is set up for locals to force people to save, not for expats looking for flexible short or long term savings that are portable and available in various currencies.
Lindell Lucy
On this point, I agree with Rachel. MPF is a bad deal. The fees are too high and the transparency too low. I wouldn't advise anyone to put extra money in MPF voluntarily. There are much better alternatives. That said, MPF is nowhere near as bad as ILAS. Nothing is as bad as ILAS.
SCMP has written many good articles on the problems with MPF. Just do a search on the SCMP website for "MPF".
Lai Yan Cheong
Dear Ms. Rachel,
Special Voluntary Contribution is not employment related. Please see the link below.
In page four of the official statistics, right at the very bottom gives you the definition of SVC.
It clearly stated that SVC is not employment related. SVC account holder can withdraw money anytime they wanted and not subjected to retirement.
I absolutely agreed with you that people shall choose to open account in bank to trade.
Interesting how Lai Yan-cheong recommend using the MPF, which has an extremely limited range of funds, is really only for locals and not expats, and locks up most of your money until retirement. Sure you can withdraw your voluntary contribution, subject to your employers approval (if employed at the time) but the mandatory portions is locked up for a very long time.
Why not just use the online brokerage services that are linked to most peoples bank accounts to trade local stocks and funds?


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