Should Insurance Agents become an IFA in Malaysia

Why Insurance Agents Should Consider Becoming an Independent Financial Advisor in Malaysia

There’s no doubt that the insurance industry is a crowded one. With so many insurance agents competing for customers, it can be tough to make your mark. However, there’s still room for those willing to make the switch to financial advising.

As an Independent Financial Advisor (IFA) in Malaysia, you’ll enjoy a number of advantages over your competitors. Here are just a few:

  1. You’ll have a clear edge in comprehensive planning for clients.
  2. You’ll have access to a wide range of products and services.
  3. You’ll enjoy a high degree of independence.
  4. You’ll be able to build long-term relationships with clients.
  5. You’ll benefit from excellent earning potential.

Table of Contents

Clear Edge in Comprehensive Advisory for Clients

As an IFA in Malaysia, you’ll have a clear edge over your competitors. Unlike being an insurance agent, you’ll provide not just insurance planning but also financial planning in general (you may charge a fee for financial planning too). This means you’ll have a clear understanding of the client’s financial position before offering them products and services.

With the popularity of the internet, clients are getting more and more sophisticated.

Being an IFA, you’ll be able to offer your clients a level of specialization that’s simply not possible with by only being an insurance agent. Whether it’s life insurance, general insurance, or investment products, clients need to have a thorough understanding of the products and services that need.

Collaboration Among Colleagues

If you are worried that you may be overwhelmed by the amount of financial knowledge you need to master to become an IFA, worry not!

It is very common, and even encouraged to work with your team to help a client solve their financial challenges!

As an insurance agent, you have an in depth understanding on risk management, you may work with a colleague with an investment background to help your client plan for their retirement with the high possible return while covering any possible risk.

This also opens up opportunities for you to work on ultra-high-net-worth clients that may have complicated financial needs.

Access to a Wide Range of Products and Services

Have you been rejected because your client wants to “compare other insurance first”?

Being an IFA means that you have one less rejection to worry about.

In fact, you can turn this into your strength!

Tell this to your clients: “After becoming an IFA, I now have access to all major insurance plans in Malaysia, I can help you save your time by doing all the comparison.”

No matter which product your client chooses, AIA, Allianz, Great Eastern or Prudential, you have them all.

Moreover, as mentioned above, you may want to expand your area of service to further add value to your clients.

Previously, as an insurance agent, I was only providing insurance advice. Now, I can offer not just insurance, but also investment and holistic financial planning advice.

These are all the companies that I am able to provide my recommendation (correct as of 17 March 2022):


  1. AIA
  2. Allianz
  3. AmMetLife
  4. Etiqa Life
  5. Gibraltar BSN
  6. Great Eastern
  7. Hong Leong Assurance
  8. Manulife Insurance
  9. MCIS Insurance
  10. Prudential
  11. Tokio Marine Life Insurance
  12. Zurich Life Insurance
  1. AIA Public Takaful
  2. Etiqa Family Takaful
  3. Takaful Malaysia
  4. Takaful Ikhlas
  1. AIA General
  2. Allianz General
  3. AXA Affin General
  4. Chubb Insurance
  5. Great Eastern General
  6. Lonpac Insurance
  7. Liberty Insurance
  8. MPI Generali
  9. Pacific Insurance
  10. QBE Insurance
  11. Tokio Marine Insurance
  12. Tune Insurance
  1. iFAST
  2. Kenanga
  3. Phillip Mutual
  1. RHB Trustees
  2. Rockwills
  1. Funding Societies
  2. Sinegy
  3. FinSource
  4. ManagedCare


Stop up-selling insurance after insurance, which may not necessarily benefit your client. Offer your client a real solid advice by looking into other areas of finances, which is only possible if you are an Independent Financial Advisor.

Enjoy a High Degree of Independence

As mentioned above, clients are getting more and more sophisticated.

It is easy for a client to smell if you are genuinely interested to help them solve their financial challenges or just for sales.

As an insurance agent, you are an agent for the insurance company. 100% of your commission is derived from the insurance company.

As such, you do not have much option if there is a dispute between your client and your principal (i.e. your company).

However, as an IFA, I have the option to choose a company with a better client service and claims process. I can’t tell you enough how much time is saved when a company has a great back-end service for advisors.

Having more options is great for business too

As an IFA, you can offer a wide range of services. These include:

  • Life insurance
  • General insurance
  • Unit Trust / PRS
  • Offshore investments
  • Estate Planning

You’ll also be able to offer the services of a financial planner, like a budgeting and cash flow planning, financial planning, and investment advice.

This also increases your client’s lifetime value, which I will cover in the last point of this article.


Build long-term relationships with clients

The financial advisory industry in Malaysia is heavily based on the referral basis. The strategy of being a success in this industry is to build a strong relationship with your clients.

As an IFA, you spend more time with your clients to cover multiple financial aspects and have a better understanding with them.

Because of this, you can provide more tailored financial advice that is not only to benefit your client but also to make them feel comfortable and feel like they are getting genuine advice from a person that they can trust.

Having a strong relationship with clients, they are more likely to recommend you to their friends and family members.

If you would curious to learn what is the job scope of an IFA, I have written an extensive article on “What Financial Advisors Actually Do?“.


Benefit From Excellent Earning Potential

The commission structure of an insurance agent in Malaysia is quite straight forward. Based on the number of policies that you have sold, you will be entitled for 6 years of commission.

However, as an IFA, you have much more options. Here are a few income streams you potentially can earn being an IFA:

  • 6 years commission from life insurance policy implementation (similar to insurance agent)
  • Product comparison fee (yes, we are allowed to charge a fee for policy review and product comparison)
  • Financial Planning Fee (usually recurring in nature)
  • Investment upfront commission (whenever client invest)
  • Investment wrap fee (perpetual income, as long as client stay invested)
  • General Insurance (perpetual commission as long as client renews)
  • Group Insurance (perpetual commission as long as client renews)
  • Estate Planning Fee
  • Other Referral Fee

As you can see, there are multiple ways you can make a living being an independent financial advisor in Malaysia.

Moreover, you are able to stretch your client’s lifetime value.

Client’s lifetime value (CLV) is the total worth to a business of a customer over the whole period of their relationship.

Maximising your client’s lifetime value is important because the cost and time needed to acquire a new client is harder and more expensive than maintaining your relationship with existing clients.

So increase your CLV is an under-rated way to grow your business and you can also help your client with their financial challenges.



FAQ: Will I lose my  renewal commission if I switch over to be an independent financial advisor?

In case you are wondering, no, according to Bank Negara, insurance companies shall pay renewal commission to its former tied agents and former agency leaders who have become a financial adviser’s representative.

IFA entitles to renewal commission

This means even if you left your insurance company, you will still receive your renewal commission as long as your client renews their policy.


How to become an IFA

I have wrote an entire article on how to become an IFA, however, here’s a summary:

  1. Get professionally qualified
  2. Join a financial advisory firm
  3. Continuous learning and adapt

Sounds simple? Because it is! However, I would encourage you read my full article on How to become an Independent Financial Advisor for more information.


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