Insurance Professionals working alongside Financial Planners

[Matt McCulley]

I'm a Financial Planner and needed to start offloading my insurance work to agents that I trust. Figuring this partnership out has been challenging but I ended up working with people that I know and trust in my state. Along the way, I figured out how to give my insurance partners a portion of the client AUM fee that I charge. Now we can both share in the profit for deeply serving a family (Which I happen to think is the best way).Now I'm moving into some other states and would love some advice on how to choose those partners?

1.What do you think makes the best agent characteristics (The ones I work with in my state are people that I know and trust already)
2. Where are the best places (independent owners or people on a downline?) to find agents to have legitimate conversations?​

Really appreciate all the help!

 

[DHK]

The number one characteristic you need to look out for (other than competence and ethical standards) is if their business model competes with yours in any way.

For example: I move money out of IRS qualified plans and fund a limited pay whole life insurance contract for retirement cash flow purposes. That makes my (perceived) business interests in conflict with yours. I would not make an ideal partner for your business.

I used to say that, depending on the expertise you need, that you should look for certain designations, such as CLU. However, that focus for insurance-only producers has waned in popularity and CLU isn't as robust as it once was. Insurance contacts have only gotten more complex and CLU hasn't kept up (and I'm a CLU graduate as of 2021).

If you want to make this a real focus, then I would attend NAIFA meetings near you and get into some conversations with the agents that attend. You already know that they are professional, seek continuing knowledge and education, and are involved in their professional association. You may want to also look at Society for Financial Services Professionals and National Association of Estate Planners and Councils. Both of those associations promote collaboration in working with other professionals.

Just my initial thoughts.

 

[DHK]

Along the way, I figured out how to give my insurance partners a portion of the client AUM fee that I charge. Now we can both share in the profit for deeply serving a family (Which I happen to think is the best way).

I hope you got them Series 65 licensed to be solicitors for your RIA firm. I'm not an attorney dealing with securities or RIA laws, but I think that's the best way for doing that long-term.

 

[Matt McCulley]

For example: I move money out of IRS qualified plans and fund a limited pay whole life insurance contract for retirement cash flow purposes. That makes my (perceived) business interests in conflict with yours. I would not make an ideal partner for your business.

I Think Finra issued a large fine and banned an insurance broker for doing this exact thing a couple of years ago. Maybe I'm misunderstanding you.

 

[DHK]

I Think Finra issued a large fine and banned an insurance broker for doing this exact thing a couple of years ago. Maybe I'm misunderstanding you.

FINRA doesn't regulate insurance agents, only those with broker dealer licensing (series 6 or 7).

Please post a link to the article regarding the regulatory action.

But there are misuses and improper implementations on all kinds of advice out there. I'm sure if I looked at that case, I'd see where the real issues are.

Also, if they are doing this as a "risk assessment" and evaluating a portfolio of securities risks... without proper licensing... that's a source of funds issue and giving advice without proper licensing and registration issue.

 

[NY independent]

It's going to be very difficult for you to vet insurance agents outside of your domiciled states. I would not share your fee with an insurance agent. I don't think it's a good look for you. We work on commission and profit sharing on a profitable book of business.You might be better off establishing a small office presence (think of it as a separate insurance division) in the states that you are interested in and hiring a licensed insurance agent as your employee, but I'm not talking about a greenhorn. From there they can bring in an aggregator for markets. You have full control.

 

[ValeRosso]

Man, I wish I were back in Georgia. I would have loved to partner with you! I've been trying to find something like this for a while now and no one wants to work with anyone anymore, I'm unsure why. I even tell people I wont talk about annuities or anything financial as to not step on their toes, but nothing.

In my opinion: Characteristics of a good insurance agent: has empathy, can relate to people of all walks of life from the indigent to the wealthy, a great listener (doesn't interrupt and truly listens to people) doing the right thing when no one is looking (hard to look for), willingness to help others, doesnt talk about commissions/keeps income private, has a hospitality background (it requires some of the biggest customer service ideals in any industry), sense of urgency. And of course the most important, honest, trustworthy, has integrity.

Where to find? Insurance forums
But seriously, I don't know. Like I said, Ive been trying to work along side finance guys and have had zero success so far on my own. Try networking groups? That might help.

 

[Tahoe Ray]

I work with several planners. I am a CFP but specialize only in insurance.

The sharing AUM fees part wouldn't be attractive to me. I get paid commissions for what I do and that's enough.

What is important is my relationships with my planners. We will debate client choices and go back and forth on the best options and then come to an agreement on what works for them (the client).

Just find someone who you can trust and is knowledgeable. Like Google always says: EEAT is king (experience, expertise, authoritativeness, trustworthiness).

 

[Markthebroker]

The number one characteristic you need to look out for (other than competence and ethical standards) is if their business model competes with yours in any way.

After that you want to make sure they have a freshly ironed cape and beautiful hair, of course.

 

[goillini52]

After that you want to make sure they have a freshly ironed cape and beautiful hair, of course.

Do you iron and dye your hair, or is that a toupee?