Insurance Agent vs Financial Advisor

[OldRookie]

I have been studying for my exams to become a registered rep selling securities, but I have begun to wonder if insurance would not be a better route to go. I see at least three advantages for insurance:

1. Larger base of potential clients. Everyone needs insurance. Not everyone has money to invest. Both require a lot of energy prospecting, but I am guessing selling securites requires more cold calling.

2. Regular income from existing clients. Most insurance customers renew their policies. There do not seem to be a lot of trailing commissions in the securities business, so not much income from existing clients unless you are constantly changing their investments.

3. Less online competition. Full service financial advisors can not compete with online stock commissions around $10, but when I have requested an online quote from Geico it has always been higher than quotes from local agents!

Any thoughts anyone?

 

[gradyinsurance]

You overlooked one big advantage of being an insurance agent as opposed to being a SEC registered investment rep. Lack of federal regulation. The SEC as well as your Broker-Dealer, will make your life one long, almost neverending, stream of filling out compliance reports, filing compliance reports, making sure that your advertisments are in compliance, etc. IMO, insurance has less restrictive regs (you only have to report to your state's Department of Insurance), and is easier to break into than securities.

That having been said, I've never been securities licensed, so I only know about it from second-hand info. There are others on this board who are/were securities licensed, and can fill you in with the details.

Welcome to the board,

Dave

 

[Stonewall]

You overlooked one big advantage of being an insurance agent as opposed to being a SEC registered investment rep. Lack of federal regulation. The SEC as well as your Broker-Dealer, will make your life one long, almost neverending, stream of filling out compliance reports, filing compliance reports, making sure that your advertisments are in compliance, etc. IMO, insurance has less restrictive regs (you only have to report to your state's Department of Insurance), and is easier to break into than securities.

That having been said, I've never been securities licensed, so I only know about it from second-hand info. There are others on this board who are/were securities licensed, and can fill you in with the details.

Welcome to the board,

Dave

You are right!!! (Finally Series 7 free!!!!)

 

[xrac]

Here is a post from another topic:

I just read in an industry magazine that in the past two years nearly one-third of independent producers have dropped their series 6 licenses.

The number one reason: "overwhelming compliance complexity, yet all of the complexity is not giving the clients a better understanding of the product they are buying and a continuing loss of qualified producers.

In the report, many producers said the volume of investment business did not justify the additional requirements and expenses.

People do not meet the Broker Dealers minimum production requirements, they receive the letter cancelling their contract and then the producers just throw in the towel.

Studies have not been seen showing that low volume producers are the cause of litigation against broker-dealers."

I think for the past 20 years the main stream securities firms have tried to make it harder and harder for insurance producers to carry an S6 or S7.

 

[Soaringagent]

It's easier to start with insurance first and then get your Series 6 if you think that you will get a lot of business.

 

[OldRookie]

Thanks all for the feedback. It is amazing how much regulation the reg rep has to deal with.

 

[xrac]

Thanks all for the feedback. It is amazing how much regulation the reg rep has to deal with.

Ten Reasons to Give Up Your Securities License

:.:.: Advisor Freedom Blog - Ten Reasons to Give Up Your Securities License:.:.:

 

[haugman]

Insurance is less paperwork and more money in the long term!

 

[2112Greg]

I have 7 and 66 licenses.

I think they expired in November of last year, but haven't cared enough to find out for sure.

 

[wfs]

Securities license free since 2000. Compliance nightmare. More aggravation than mortgages (yup, I used to do those too). Fixed life insurance only for me.

I used to sell variable insurance, but it doesn't look like there's a great market for that anyway right now.