Adding H/L Insurance to RIA Firm

[Reign]

I am a little confused and tried reading as much as I can but need help.

I will outline my story and appreciate anyone who can help me navigate any part of this journey, or link me the proper thread.
Thank you in advance.

I own a RIA,(Financial Planning) firm.
CFP.
We focus on providing written financial plans and investment management.
Fee only.

Under another umbrella we have an accounting subsidiary. I am married to a CPA.

During our planning process we always identify their insurance levels. When their is a need we refer the work out. Mainly to Liberty Mutual. The agent we used recently retired and we were passed along to a new associate.

Very seldom did we ever get a referral back.
So now we are contemplating incorporating insurance in our practice.

We called Metlife direct and go through the process.
I have not renewed my H/L license since leaving Morgan Stanley.

Met-life suggested I call Millennium Brokerage Group, a GA I guess.

I spoke to them and have scheduled a follow up.
So here are my questions;

Is it worth the trouble?
I am guessing I would write 15-20 life insurance policies per year.
Another 10 or so LTC
How much income does that derive?

2)-who should I talk to get appointed?
A GA?, direct with someone else?

3) Is the income a one time thing or can I sell life insurance with recurring revenues?

I don't know what I don't know. What do I need to know?

I appreciate the time. Thank you.

 

[Norwayguy]

Well based on your original post it looks like you will have to get your life and health license back.

Is it worth the trouble only you can answer that. Selling 15-20 life policies of small term would not be very beneficial but based on the size of your clients if they are paying for written investment plans I would assume the size of the policies would be good sized. Most Term carriers pay first year commission only...there are some that pay renewals, if you sell whole life or UL they will provide a yearly renewal stream.

I haven't sold a LTC policy in some time, when I last sold them you typically had an option for all commission up front in year 1 with nothing else or a smaller FYC with renewals.

I would speak to the GA once you recieve your license it will be relativily easy to appoint with the carriers.

 

[bluemarlin08]

I work with a firm similar to yours. I split the commissions 50/50, I do all the wor and address their life, disability, health and LTC. Reading that you refer to Liberty Mutual is somewhat strange, they are not leaders in any of the fields of insurance I mentioned above. I would suggest you find an experienced agent that is independent and can address the insurance areas with vast expertise, you still need to get licensed.

 

[b61mack]

Where do you live. I recommend you get your license back, but find a good indy insurance agent to work with, and split the commission. you are not doing your clients any good by sending them to liberty mutual.

 

[Reign]

Where do you live. I recommend you get your license back, but find a good indy insurance agent to work with, and split the commission. you are not doing your clients any good by sending them to liberty mutual.

Maryland,

Curious as to why you recommend using an agent versus going with a GA.

 

[b61mack]

You need a license, to legally be able to split the commission. for only 20 deals a year, you are better off using an indy. using a GA is ok, to get contracts,

 

[njh_lfg]

I too run an RIA, if you pick up your insurance license you will no longer be fee only. Additionally, if your insurance license is not active you might be non-compliant (most states do not allow you to charge a fee and recommend insurance coverage limits without being licensed). I would check into that.

 

[Reign]

I too run an RIA, if you pick up your insurance license you will no longer be fee only. Additionally, if your insurance license is not active you might be non-compliant (most states do not allow you to charge a fee and recommend insurance coverage limits without being licensed). I would check into that.

Thank you NJH,

Our outside compliance vendor recommended we do the same thing we did with the accounting side. We created a separate S-Corp for the accounting and a disclosure statement for mutual clients. He suggested also creating a new entity for the insurance side.

I wish insurance could be sold fee only but the model doesn't work on this side.

I should clarify I am fee only on the investment management but charge an hourly rate on the written plans and consulting.

But I will need to explore this further.

 

[njh_lfg]

I am set up the same way.

You might also want to evaluate using a no-load insurance product. This would allow you to be considered fee only.

Regardless of disclosure if you somehow receive compensation (even flow thru another entity) you cannot call yourself fee only (especially if you use NAPFA).