For a majority of financial advisors, life insurance planning isnt all its cracked up to be.
Over half (52%) of advisors do not characterize the life insurance end of their practices as either successful or very successful, according to a Saybrus Partners survey released Tuesday. The chief stumbling blocks they cite are the number and complexity of the various policies and determining whether they fit a clients needs (37%) and too much paperwork (25%).
Of the 30% of survey participants who do not offer life insurance coverage, nearly half (49%) state that doing so would distract them from their core business, while 17% say selling life insurance is just too complicated.
Though most advisors work to incorporate life insurance into their clients financial plans, they are not as successful as they could be, said Kevin Kimbrough, Saybrus Partners national sales manager. From what we see they have an opportunity to grow and do a better job. The question is how do they gain that knowledge without diverting attention from the core of their business.
About 70% of the 131 financial advisors surveyed provide their clients with life insurance when its warranted, but they find that their clients rarely inquire about it.
During the last three years, 44% say that 10% or fewer of their current clients had asked about possible life insurance strategies.
According to Kimbrough, this shows that advisors have a larger role to play in informing their clients about life insurance policies and benefits.
While clients typically dont ask about life insurance, financial advisors are uniquely positioned to offer guidance, Kimbrough said in a statement. This survey shows that financial advisors have an opportunity to fill a gap and educate their clients about the potential role of life insurance.
But in order to help their clients, advisors must first gain the necessary skills. Given the complexity of life insurance policies and processes, that isnt always easy.
At the end of the day there are only a few solutions to the problem, said Kimbrough. One is for the advisor to become a student of that area of the business, to study up on life insurance, perhaps take some of the industry study courses, work closely with particular insurance companies on the information and resources they can provide, and really just invest the time in growing their knowledge base.
Learning by doing is the best course of action, Kimbrough said. Its more about a practical application than an academic study process.
The Saybrus survey was conducted during the 2013 INSITE conference in Hollywood, Fla., which was held from June 5 to June 7.
A life insurance partnership company, Saybrus Partners offers personalized insight, support, and recommendations to help financial advisors and institutions integrate life insurance into their businesses. It is a subsidiary of The Phoenix Companies, Inc.
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access