A majority of financial advisors do not describe their life insurance sales and advice as successful or very successful, according to a recent survey.
Saybrus Partners, Inc., released results of a survey of 131 broker-dealer registered reps, registered investment advisors and dually registered advisers who attended the recent INSITE 2013 conference.
The survey found that more than half (52%) of financial advisors do not describe their efforts to provide life insurance and related life insurance-based advice to their clients as “successful” or “very successful.”
Additionally, 44% of those polled said that over the last three years, no more than 10% of their current portfolio of clients had proactively asked them about approaches to life insurance that may be appropriate for them. Only 14% said more than half had proactively inquired about life insurance.
Additionally, more than two thirds (70%) said they do provide life insurance to their clients “when appropriate.”
“This survey shows that financial advisors have an opportunity to fill a gap and educate their clients about the potential role of life insurance,” said Kevin Kimbrough, national sales manager for Saybrus Partners. “Though most advisors work to incorporate life insurance into their clients’ financial plans, they are not as successful as they could be.
Kimbrough said that while clients typically don’t ask about life insurance, financial advisors are uniquely positioned to offer guidance. They can help ensure their clients have enough life insurance to address basic income replacement, as well as wealth transfer, succession planning, supplemental retirement savings or other needs, he suggested.
Life insurance can be complex for advisors
When asked what was the most complicated part of understanding and selling life insurance solutions, the poll found:
- More than a third (37%) said, “the variety of different types of policies and riders and how they fit specific client needs.”
- A quarter of advisors cited “the abundance of paperwork required to sell and issue a policy.”
- 13% cited “frequent product development changes.”
- Other aspects noted were: “regulatory changes” (9%), “understanding combination products that address multiple needs (e.g., LTC)” (8%), and “leveraging policies for uses other than protection of heirs/income (e.g., succession planning for business owners)” (8%).
Among the 30% of advisors who do not regularly provide life insurance to their clients, almost half (49%) said “selling life insurance detracts attention away from their practice,” and nearly one out of five (17%) said they don’t sell it because “life insurance is too complicated.”
The findings are consistent with Saybrus’ 2012 survey.