Fiduciary Obligations

[policy doctor]

Perhaps some of you have read Daniel Solin tips on insurance; then again, maybe not. What piqued my interest was his advice to have client ask agent to sign a letter stating that agent will act as a fiduciary in dealings with client. Have any of you done this, or had a request for such? If you do, what about potential for future litigation on events beyond your control?

I know RE broker agents represent the seller and the buyer can choose a Buyers agent to represent his interests. Is insurance drifting into this arena?

Insurance Tip #1: Your agent does not have to act in your best interest - WalletPop Blog

 

[xrac]

One of the original fee-only CFPs is headed to prison for all manner of fraud and malfeasance:

http://www.fa-mag.com/fa-news/4374-fee- ... years.html

Do you think she got off lightly?

Amazing! That fee-only fidicuary thing gets people in trouble. Give me that good ole commission greed any old time.

 

[stormtracker]

By the sheer nature of our job, we are fiduciaries, among other things...

 

[moonlightandmargaritas]

What piqued my interest was his advice to have client ask agent to sign a letter stating that agent will act as a fiduciary in dealings with client. Have any of you done this, or had a request for such?

All you have to do is research the laws of agency. You are an agent of the insurance company. Period.

 

[Winter_123]

It is a dicey area that agents stumble into when they sometimes decide to start referring to themselves as a "financial planner." It some states you cannot do that without special licensing (securities or insurance advisor or consultant, whatever) But even in the states where any old agent can refer to themselves as a "financial planner" they can be held to a higher standard in litigation if that is what they represented. An agent merely needs to do basic suitability analysis and not be fraudulent. It is not his/her obligation to point out that other products or options might work better and to check those out provided that the option they represent is a reasonably good fit.

State laws and opinions vary of course.

It gets messy and things change from year to year. For a long time the certification to have was CFP, certified financial planner, if you were in securities. Then the SEC came out with the Merrill Rule that said that securities types were actually just salesmen and could not use the CFP designation unless they were actually licensed as a financial advisor. So that created a major mess. Everyone had busted their hump bigtime to ger their CFP and then couldnt use the designation. Then the courts or the SEC overturned the Merrill Rule. Around and around we go.

 

[Soonerman]

Whatever you do don't publish your skill level on stationery, business cards etc as "Expert" or "Specialist" because the day may come when the plaintiff's attorney asks why the client was exposed to a loss. Hasn't happen to me but it has to a friend of mine, no fault of his.