Adding P&C Insurance Services to My Financial Planning Firm.

[BiggitySwat]

Hey folks,

As some of you may know from my other posts, I am marketing myself as a "full service" financial planner. I have Life + Health on the insurance side and the Series 7 & 66 on the securities side.

Many of my trusted clients have been talking to me about car, homeowners', and hurricane insurance. I do not have a P&C license, so I've been having to refer these cases out to a P&C broker. This broker is well-meaning but has yet to refer me back any clients.

So, after some soul searching, I decided that I should probably get the P&C license to "not leave money" on the table. The question is: what is the next step after getting the P&C license?

I have an FMO/IMO for Life/LTC/DI/MedSupp insurance and fixed/indexed annuities; I have an independent broker-dealer for all securities. In P&C, do I sell car and home insurance through an FMO like on the Life side?

Or do I just call Progressive (for example) and talk to them about getting contracted directly with the carrier?

Some help would be nice, thanks!

 

[sman]

I've been considering the same thing. My guy has referred me one small group case over the last couple of years. I've sent probably somewhere in the neighborhood of $40-$50k in premium his way. He did send me a $10 Wal-Mart gift card though.

As far as using an FMO for P&C, I don't believe it works that way. And the good carriers generally won't contract with an inexperienced newbie on P&C. Many require you to have a book of business before they will contract with you. Your best bet is to actually partner up with someone or even buy an agency (if you can find one for sale).

Hey folks,

As some of you may know from my other posts, I am marketing myself as a "full service" financial planner. I have Life + Health on the insurance side and the Series 7 & 66 on the securities side.

Many of my trusted clients have been talking to me about car, homeowners', and hurricane insurance. I do not have a P&C license, so I've been having to refer these cases out to a P&C broker. This broker is well-meaning but has yet to refer me back any clients.

So, after some soul searching, I decided that I should probably get the P&C license to "not leave money" on the table. The question is: what is the next step after getting the P&C license?

I have an FMO/IMO for Life/LTC/DI/MedSupp insurance and fixed/indexed annuities; I have an independent broker-dealer for all securities. In P&C, do I sell car and home insurance through an FMO like on the Life side?

Or do I just call Progressive (for example) and talk to them about getting contracted directly with the carrier?

Some help would be nice, thanks!

 

[djs]

The easy thing to do is to find a local agency that does not offer financial services to their clients.

Sign on as a producer for them. Make sure they understand that this is a limited gig for you, to help your clients out.

Doing it this way solves many headaches and expenses. They will cover your P&C E&O (pretty pricey), should provide you with the tools you'll need (again, pretty pricey), and they may even give you access to some of their higher net worth clients.

The other option is to use a company like superior access (sais.com), though I'm told it is no longer $25 a month or Insurance Noodle (insurancenoodle.com) and write your clients through them to any of the markets they have.

Problem is, then you have to provide your own E&O (starts around $3500 a year), find a way to run MVRs, CLUE reports, etc. It can make it almost not worth it, unless you have a substantial book of business for financial stuff.

Dan

 

[Norwayguy]

I'm not sure if it would work this way in your state but couldn't you get the license and split the cases with the broker your refering to now....That would get your feet wet and you wouldn't have to worry about being a novice to your clients in the area.

 

[chakote]

This is an interesting thread. I have a management consulting business (i.e. rent a CFO so to speak) that assists small to mid size companies raise money, assist in cost and general accounting, etc... and have received requests for risk management services that include insurance products. I too looked at the possibility of licensing and subsequently acquiring an agency that can be run by experienced people but the number of agencies for sale in my area (Central California) is well, zilch.

 

[CFP83]

Anyone who is experienced in the financial advising/planning world has probably had these same thoughts regarding P&C. We constantly send our clients to an agent to get these needs taken care of but somehow never have the favor returned!

I understand completely the idea of wanting to be full service and not leave any money on the table.....but you have to ask yourself at what cost? How would you feel if your optometrist also wanted to handle your root canal as well? How about your mechanic telling you he would like to handle all your lawncare needs as well? My first reaction to these would be "Isn't your primary business going well, is this why your picking up other bags of tricks?"

I really like the idea of getting licensed and then getting an agreement with an existing agent in town to split the comp. This way your being the clients quarterback by referring the P&C business out to somone in your "network of specialist" just like you would if it were a legal or accounting matter, but still getting some comp.

 

[SalemInsuranceGuy]

Anyone who is experienced in the financial advising/planning world has probably had these same thoughts regarding P&C. We constantly send our clients to an agent to get these needs taken care of but somehow never have the favor returned!

I understand completely the idea of wanting to be full service and not leave any money on the table.....but you have to ask yourself at what cost? How would you feel if your optometrist also wanted to handle your root canal as well? How about your mechanic telling you he would like to handle all your lawncare needs as well? My first reaction to these would be "Isn't your primary business going well, is this why your picking up other bags of tricks?"

I really like the idea of getting licensed and then getting an agreement with an existing agent in town to split the comp. This way your being the clients quarterback by referring the P&C business out to somone in your "network of specialist" just like you would if it were a legal or accounting matter, but still getting some comp.

I agree with your posting. In the past I tried to be a jack of all trades (Life, Accident, Health, Annuities, Mutual Funds, Registered Investment Advisor, Legal Service Plans, AFLAC, you name it I was going to sell it just like the big boys but with only me in my little one man shop. I ended up being a master of none. It was so hard to keep up on all the companies and plans especially when selling in multiple states.

I've also thought about getting the P&C license, but after reading about the expenses and all the time consuming stuff I can honestly just say no thanks. Not to mention clients making claims and calling you for every little fender bender.

I've decided now just to mainly specialize in term insurance. Sure I'll still write a few final expense plans here and there and a few annutiies. But for the most part I want to be known as the term specialist. Know my 10 companies inside and out to the point where I can almost quote rates off the top of my head. Ok I went overboard on that, but you get the point.

 

[moeasadi]

I am on the otherhand P& C broker , but also Series 7/66 licnsed . I am only doing P&C . It's impossible to do all and be successfull.

 

[hexp23]

Just out of curiosity, why is it impossible? Because you are a one man shop, or its not not feasible to collect enough commissions to pay licensed/educated staff?

Thank you

 

[greenie681]

I know this is a old post but i am very curious to see what has happened since. I am going to add P&C Insurance to my business as well, but I am not doing all the work myself. I have partnered with a P&C agent who is independent, who will handle everything as I will funnel him leads and other business.

We will be partners and this way I will be able to continue building and growing my business and from this point on my and all my other agents and offices will be able to now say to their clients yes we do offer P&C insurance and we just might be able to help you save some money in that department as well.

As I said I have not yet merged the P&C insurance yet because I am still trying to learn about the best way to get started is? Buy an agency or work with one? What to expect? What commission levels are acceptable? Is one P&C agent enough to start up with until this machine gets up and running or do i need more? This is where I am curious to see how this has worked out for others and what they did or didn't do.