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.

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