For the purposes of a story, let's assume that I heard from an investment advisor who read my article, “Choosing an advisor: Generate life insurance premiums or assets under management. The advisor told me that their firm identified with many of the points in the article fighting against offering permanent life insurance to their clients. However, on reflection, they are concerned that they may miss the opportunity to expand their repertoire of services and, therefore, their relationships with clients, to mitigate risks to their assets under management and, yes, to earn more money.

A Win-Win for customers and the firm

A well-funded life insurance policy gives its owner a variety of options to generate lifetime income that can allow advisors to stay on course with their investment portfolio. The advisor's firm has many clients who will experience a significant reduction in income (and an increase in tax rates) when one spouse dies. While long-term cash flow projections can be somewhat reassuring, their reliance on so many assumptions still leaves much uncertainty and cause for concern. Politics can address this lack, both empirically and emotionally. In turn, by supporting the survivor's finances, the survivor will have less need to withdraw the portfolio, meaning the advisor's AUM. It also means that the advisor will have a lot more to manage for the next generation. Having life insurance in place seems to make sense for both clients and the firm.

The interview process

So they ask, “Supposing we think we'd like to add permanent life insurance to our service offering, how should we go about it? How can we proceed in such a way that today's solution does not become tomorrow's problem? After getting more information about the firm, who they had talked to in the insurance business and so on, this is what I told them:

• Take your time! Two or three general brokerage agencies are competing for your business. It will take you some time to complete your due diligence.
• Before you contact the BGAs to start the discussion, have your lawyers and possibly your compliance people check them thoroughly. Also, check with the references each one has given you. And when you do, have a list of questions ready so you can cover all critical aspects of their relationship with BGA. A less conventional suggestion is to follow BGAs on social media to see if you like what they post. You may be impressed by their core messaging and thought leadership or disappointed by their overly aggressive push of a particular product or planning concept.
• Invite BGAs who screen favorably to make presentations at your firm. Tell them to build and complete their presentations according to the guidelines set out in “Guidelines for Advisors Interviewing Life Insurance Brokerage Firms. However, I would suggest that you don't limit the presentation product segment to bundle products, as I did in that article. Expand the discussion to products designed for the death benefit. Along these lines, ensure that BGA offers a full range of products to accommodate the full range of your customers' fitment requirements. That said, like many agents, you will struggle with the notion of pitching any product to your clients that you either don't understand or wouldn't buy with your own money. My articles on fitness, such as “Navigating the road to product suitability,” should come in handy here.
• Ask BGAs to spend a few minutes on lifetime settlements and how they will support the adviser in evaluating the merits of a settlement and then completing the transaction. See “Residence Life – Planning Considerations Beyond Supply.
• I assume that every BGA will identify at least some of their people who they will dedicate to your firm, not just for service, but for interacting with your clients in a sales fashion. Allow some time for the person interacting with customers to make the kind of presentation they would make in a real customer environment. When they do, remove the filters and ask lots of questions. Listen carefully to their words and pay attention to their body language. Will you put them in front of your customers?
• After the initial introductions, ask those who passed the audition to come back and personally take you through the fact-finding interview that they would get each prospect. Tell them that before the interview they should have a comprehensive personal financial planning orientation, not an estate planning orientation. The former will align well with your clients' interests and concerns, while estate planning will not. Furthermore, because a life insurance presentation based on comprehensive financial planning is much more nuanced and technically challenging than one based on estate planning, your request will be a good test of the skills and flexibility of the staff. BGA. See “Is your marketing message missing??” Have one of your most knowledgeable colleagues, perhaps the person who will manage the relationship with the BGA, sit in on this meeting.
• Then revise. Did the interviewer/salesperson ask the right questions and probe the right areas to develop an appropriate product recommendation? Did they address your goals, objectives, and limitations or just try to get you to see things on their terms? Did they answer your questions as they were posed, responsively and fully or did they take every question as an objection? Were they interviewing or selling? Over the years, I developed a list of statements or responses that, if I heard an agent say about me or a client, I knew we were done. This list is still useful today.

I feel that choosing an advisor for a BGA and, for that matter, their decision to proceed with this new endeavor will be based on extensive due diligence, but perhaps even more on gut feelings about how safe they are. those in the BGA organization and the quality of its people.