Differentiate Yourself from Other Financial Advisors

Given the continuous volatility and uncertainty in the financial markets, in clients’ retirement plans and life insurance portfolios, it has been decades since the last time financial services professionals could make such a big difference/impact in the financial lives of their clients. In some ways, it has been decades since it has been this good to be in the financial services business.

On the other hand, due to the current environment:

• clients are certainly more hesitant to make changes and they require more hand-holding,
• portfolio values have been reduced, which means that asset-based compensation has also been reduced
• client’s asset allocations have become more conservative, which can mean that compensation to the advisor can be further reduced because compensation paid on fixed-income portfolios is generally less than that paid on equities.

While it has been a long time since the financial services professional has been this needed, for a financial services professional to be successful the current environment requires more work and less pay … at least based on the prevailing paradigm. However, while the current environment begs for attention of clients’ investment portfolios and retirement plans, the life insurance portfolios of clients arguably need as much or more attention, and have for a long time.

Talk with your clients about their life insurance portfolios. Few if any know what they are actually paying for cost of insurance charges (COIs), fixed administrations expenses (FAEs), cash value based “wrap fees” (M&Es), and premium loads or what they are actually getting in the performance of invested assets underlying policy cash values. In addition, few of their financial advisors know what their clients are paying or what they are getting. Differentiate yourself from all the other financial advisors who are wringing their hands over the recent performance of their clients' investment portfolios. Actually measuring the performance of a life insurance portfolio allows financial advisors to bring good news to clients (which is sorely needed in the current environment).

Measuring the performance of a life insurance portfolio can lead to only two conclusions:

• that existing policy holdings are well-priced and performing well relative to peer-group alternatives which is good news, or
• that you can reduce policy/portfolio expenses or increase the performance of invested assets underlying policy cash values or both, which is also good news.

Given that findings from independent studies¹ indicate there can be as much as a 40% swing between best-available rates and terms and poorly-priced products, the opportunity to bring the good news of reduced policy expenses can be both significant and meaningful today (versus the promise of some future improvement in investment performance).

So use Confidential Policy Evaluator (CPE) Research Reports to offer new and complimentary portfolio management services that give you something to talk about other than the client’s investment portfolio while we all wait for them to turn around. Now is the time to differentiate yourself from the wealth managers who neglect that $3 Trillion in wealth found in the life insurance portfolios of clients and pick up new business that can make up for the decline in traditional investment advisors fee income.

Click here and get up to 3 Confidential Policy Evaluator (CPE) research reports under our NO-RISK trial subscription.

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