Insurance companies are beginning to give fee-only advisors, and their clients, the kind of lower-cost policies they've long sought.

    I wasn't surprised when I received 12 e-mails in response to my August column (A New Life for Insurance). What surprised me was that only one was negative (though my editor tells me that he received a few negative notes, as well). Still, the response suggests that the way financial advisors view their clients' life insurance needs is changing. Rapidly.

I've been writing about insurance for more than 20 years. Consumers are usually happy to hear my advice, financial service professionals less so. I try to write about how consumers can get necessary insurance coverage without paying for a new Cadillac for the salesman. Not surprisingly, the salesmen usually squeal. They call my editor and write letters and e-mails advising him that I am a thief because I know nothing about insurance and I don't understand the capitalist system.

And they always write to say that if I think commissions are high, I should just try selling life insurance policies sometime. They don't exactly walk out the door by themselves. That's precisely my point. In what other business could salesmen say their product is so difficult to sell that we demand a very high commission? I can't think of another offhand. In most cases, the tough-to-sell products just wither away. Who wants them?  Fortunately, that's just what's beginning to happen to those policies that don't walk out the door.

One reader wrote: "If insurance companies depend on fee-based advisors for their business, the industry will crash." What an interesting comment. Actually, I'm not an industry lobbyist. It's the consumers that concern me. Americans need life insurance and they need a place to buy it at a reasonable price. The product is necessary. The mainstream industry delivery system is not.

I have yet to hear a reasonable defense of the delivery system. Insurance executives don't offer one. Many at the highest levels complain that they're stuck with it. The defense of the system always comes from salesmen and it is always this: Insurance is hard to sell. One e-mailer wrote: "It is incongruous to live in a capitalist society and expect the salesperson not to be paid."

People should be paid for value added. Pushing expensive products down peoples' throats is not value added. In so many cases that I've seen, insurance salesmen have been paid huge commissions for pushing inappropriate products on unsuspecting customers. A couple of examples: a life insurance policy in lieu of a college fund or retirement fund. Or annuities for an IRA. This same correspondent says he read my column on annuities, which was "way off the mark," and that his clients have been getting 8% to 16% in index annuities "with no market risk."  More details, please.

But let's get back to the good news, which is that so many readers of Financial Advisor agree that their clients should be able to get insurance coverage without paying ridiculously high commissions. This movement has been pushing through the high end of the market for some time, where advisors to the wealthy rewrite insurance policies to squeeze out excess expenses and commissions. But few options have been available for the masses.

That is beginning to change, as I noted in August, as companies such as TIAA-CREF and Ameritas design products for use with fee-only planners and as consultants such as Brian Peterson of Next-Gen Advisor work as fiduciaries to help financial advisors and their clients find the best policies. Now that the mold's been broken, I expect to see new players running into the stadium from all the gates.

Herb Sturdivant, an advisor in Charlotte, N.C., who has been working in the financial services business since 1983, wrote to ask, "Where can I find these new life insurance products you discussed? I am looking forward to your referral." Unfortunately, I won't be able to give any referrals because I'm a reporter, not an insurance consultant. One thing I believe I can do is help those of you interested in new products and new distribution systems keep in touch with what's going on.

As a start, I'll offer some thoughts from the e-mails that came in.

Scott Witt wrote to introduce himself. He is an actuary and fee-only advisor based in the Milwaukee area. Witt worked in the actuarial department of Northwestern Mutual for more than ten years, "so I am intimately familiar with the inner workings of the insurance industry." He also worked with Peter Katt, an independent consultant, for a couple of years.

"I thought you might be interested in a recent demonstration I did that involved a prominent no-load policy used by many financial advisors. I have no vested interest in the decisions my clients make, but it is interesting to note how poorly the no-load product fares in this particular analysis." Yes. And that is a topic for another column. No doubt some agents will jump on that analysis as a reason to stick with what we've got: high-commission products.

But that makes no sense. What it says instead is that there's lots more work to be done on transparency in life insurance products. We can celebrate that the work has at least begun.

Another person who wrote to me, Michael C. Valdez, is a principal with Business Exit Planners in Tampa, Fla., a firm that, among other things, designs road maps for business owners who need exit strategies. As part of the strategies, he uses key-person insurance, as well as coverage for estate planning and charitable giving needs, and the company encourages each client to choose where to have the plan implemented. He operates with a CPA, an attorney and a clinical psychologist (who is also a CPA, CLU, and a registered employee benefits consultant).

I also received this note: "Your article was very timely for our fee-only wealth management firm," wrote Ron Rhoades, director of research and chief compliance officer for Joseph Capital Management LLC in Hernando, Fla., "as we are re-exploring the life insurance marketplace with a view to recommending life insurance (but, to avoid conflicts of interest, not selling any products). I am aware that life insurance agents will likely pummel you with hate mail and call you all kinds of names."

Rhoades also says that life insurance agents don't want to understand that most life insurance issues could be solved if clients bought a term policy of 20 years, more or less, depending on the needs, and then converted it to a permanent form of insurance at some later time. His firm has a saying regarding salespeople who sell VAs, EIAs and "other highly expensive products (with no consideration of tax consequences, fees and costs, etc.)"-either they "Just don't know," or "They just don't care."

Finally, Rhoades sums up, in a much more elegant manner than I could have done:

"Disintermediation is a powerful force, and if we can get the SEC to stop interfering in the process (such as their past effort to negate fiduciary duties in fee-based brokerage accounts), the world will continue to evolve to a 'purchaser's representative' fiduciary and advisory model, not a 'manufacturer's representative' product sales model." I say: Bravo! And he concludes: "Thank you for your continued writings, which promote just such a future." And thank you, Mr. Rhoades.

I also received a couple of e-mails from people who asked to talk about these issues privately and not for publication. Interesting, isn't it? One surprise e-mail came from Gay Yellen, who along with her husband Don Reiser ran the marketing arm of Ameritas Life with such enthusiasm for many years. Reiser came across the August column on insurance in Financial Advisor, and they wanted to touch base and update me on their retirement, which they are very much enjoying.

Yellen just finished writing a novel. Reiser divides his time between charity work, photography and consulting. So I wonder what Reiser thinks of recent developments in the insurance industry after spending so many years pushing for greater transparency and lower expenses. And, of course, I wonder what the rest of you think as well.

Let's not let this one go. We can all learn something.

Mary Rowland can be reached at [email protected]. She has been a business and personal finance journalist for 30 years, a half dozen of them as a weekly columnist for the Sunday New York Times. She wrote a column called Practice Points for Bloomberg Wealth Manager for six years. She speaks regularly about money and values. Her six books include two written for financial advisors: Best Practices and In Search of the Perfect Model.