Embrace the Fiduciary in You with THEInsuranceAdvisor.COM
As the debate continues in Congress on the Fiduciary Standard, survey results were released in December by the SEI Advisor Network. “In the poll more than half the brokers and 86% of the advisors said they believe that all financial professionals who give investment and financial advice should be required to meet the fiduciary standard. Further the survey found that a majority of brokers (61%) and a significant majority of Registered Investment Advisors (RIA) (89%) were against being permitted to ask clients to waive the fiduciary standard.”
The Committee for the Fiduciary Standard adopts five (5) fundamental principles to be an essential part of the pro investor platform:
- Put the client’s best interest first
- Act with prudence; that is, with the skill, care, diligence, and good judgment of a professional
- Do not mislead clients; provide conspicuous, full and fair disclosure of all important facts;
- Avoid conflicts of interest; and
- Fully disclose and fairly manage, in the client’s favor, unavoidable conflicts.
You can help fulfill your fiduciary duty to your life insurance clients, by reviewing your (client’s) life insurance policy with THEInsuranceAdvisor.COM.
The biggest controversy — and the subject of industry debate — is whether brokers would be required to adhere to the identical principles-based standard of care that RIAs are held to under the Investment Advisers Act of 1940 or to a weaker fiduciary standard.
Currently brokers are held only to a rules-based suitability standard. The fiduciary standard of care is widely viewed as more stringent than the suitability standard. “The suitability standard focuses on sales conduct. It requires the representative to sell the most appropriate product for the client [from among those products that the representative is licensed to sell and without disclosing any sales limitations]. The fiduciary standard requires the representative to act solely in the interest of the client without regard to the financial or other interest of the broker, dealer, or advisor providing the advice.”
The life insurance industry of yesteryear started with a small number of insurers/products in search of a sale from a large number of prospects/clients (i.e. product centric). The future of the life insurance business will instead start with a large number of insurers/products and match the right insurer/product for each individual client situation (i.e. client centric).
With permanent life insurance, suitability depends on a number of factors, and the lowest premium may not always offer the best value. The desirability of permanent life insurance products depends principally upon the following five (5) factors:
- Financial Strength and Claims-Paying Ability
- Cost Competitiveness
- Pricing Stability
- Cash Value Liquidity
- Historical Performance of invested assets underlying policy cash values
All 5 factors contribute to the appropriateness of permanent life insurance policies, and no single factor is sufficient to determine desirability. CPE research reports measure all 5 factors for any policy holding against benchmark averages for peer-group products.
Our patented process uncovers the “real cost” of your (client’s) life insurance policies. THEInsuranceAdvisor.COM subscribers bring to all prospects and clients the independent research necessary to know which insurers and which products offer the best available rates and terms (BART) from the universe of products and for each individual client situation.
Use the Confidential Policy Evaluator (CPE) Research Reports to determine the appropriateness of pricing, the reasonableness of performance expectations for invested assets underlying policy cash values, and overall suitability for your clients' policies based on the 5 factors of suitability. Click here and get up to 3 Confidential Policy Evaluator (CPE) research reports under our NO-RISK trial subscription.
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