14-29 Ethics Many salespeople, especially those that sell financial products suc

Question

14-29 Ethics Many salespeople, especially those that sell financial products such as life insurance or annuities, earn their salary or a portion of their salary based on the product(s) they convince you to purchase. In addition, buyers are often uneducated about how the sellers make their money and about the product(s) themselves. What are the ethical obligations the seller has toward the buyer? Should the salesperson disclose how he or she earns his or her money? Is it ethical for a salesperson to try to sell the buyer a product that the salesperson receives a higher commission on? What responsibility does the buyer have in such situations?

Explanation / Answer

Answer:

1) Ethics are the moral obligations of an individual with respect to the truth, trust, integrity, equality and other frame of reference to value system. Generally, it tells us what is right or wrong in case of making a judgement or decision in day to day business negotiations.

Ethical obligations to the seller toward the buyer:

2) If, a sales person will disclose that how he earns money or commission then it will be a good think for the customers. They might support the sales people by considering their struggle and nature of the job. One more think, this will promote the transparent business deal from a sales man. Ultimately, he will achieve more target as well as his reward associated with performance.

3) In my view, when a sales person only sell those policies which has higher commission to him then it shows his greed. Greed is an unethical thing.   It might be a case that policy will not suited to profile of a customer but a sale will done. It might be a case, he will force or make an undue influence to win the business deal from a non –qualified customers. Surely, it will damage the image of the company as well as a customer with unhappy feelings.

4) A buyer must assure himself before purchasing any product. The terms & conditions must be carefully read by him so as to avoid any legal binding situation. He should use the following tactics,

1) Take any suggestion from authorise agents only.

2) In case of any financial purchase the documents and interest rates must be carefully read and then an acceptance should be done.

3) if, anyone has already purchase any policy then take a suggestion from that person.

4) Never purchase any policy instrument which crosses the limit of your budget or investment.

5) Never do any hurry while making a purchase of financial products.

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