When working with a client do you:
- Never Talk about insurance
- Only Talk about insurance if asked
- Always recommend the exact same insurance types for each client no matter client needs
- Take the client’s needs and concerns into account, research and find the right product
- 90 day wait 5 year benefit
- 90 day wait 5year own occur and paid to 65
- No di offered
The results were very interesting. It is long suspected that advisors either don’t recommend insurance products or if they do they do it in a cookie cutter approach, but to look at the results of what is recommended was interesting. In the below charts you will see the first one depicts the percentage of 1,000 advisors on how they recommend insurance and then what life product they use. The Disability question was very surprising. 98% said they don’t recommend any disability insurance at all so that chart was not included.
As you can see a majority don’t even recommend an insurance product. Why is this a big problem? According to the FPA, 95% of all advising clients are underfunded in their insurance and die or are disabled without adequate protection for the family (FPA, 2012). While not all advisors are Certified Financial Planners, the leading authority on financial planning and case design is the College of Financial Planning. They state that in the 6 areas of financial planning:
- Cash Reserves
- Adequate Protection
- Investment Planning
- Retirement Planning
- Estate Planning
- Tax Planning
There are many answers, the simple answer is it is the right thing to do. Our job as advisors is to help our clients plan for unforeseen events. The main reason we don’t offer or recommend is knowledge. Not knowing what is the right product or how to find the right opportunities keeps us away from it. Also in fear of our clients getting upset about talking about insurance we also shy away as well. What happens though if something happens and they are protected? We’re held liable because we didn’t do our due diligence. SO we can endure a little pain now or a lot of pain later, which would you rather do?
How to do it?
Once you’ve decided to do it, then the next step is to set up a practice where you cover all six areas. There are a few simple steps to take to make sure you always do it right:
- Set up a review checklist
- Have an advisory board to run different ideas past people
- Team up with an insurance expert
- Take classes to learn more
Our clients need help and advice but too many advisors and agents don’t offer all the resources our clients need or if they do they offer a cookie cutter approach. Analyze your practice and identify what you want to get done and how to build a better practice.
Rodney Mogen, is the president of solveurpuzzles, a business focused company. Helping financial advisors and insurance agents solve their case troubles and issues. Rodney is also a small business advisor focused on developing financial strategies for small business owners and helping them develop their own strategy and ideas to grow, sell, develop the way they want. He is focused on creating proper financial strategies for Advisors and business owners to assist them in their day to day duties by solving their financial puzzles. Rodney is also the Director of Financial Strategy for The Evans Group. Check out more information at www.solvurpuzzles.com and the financial strategy work for The Evans Group at www.financialselectservices.com.