Advisors Who Prepare More Financial Plans Produce More Life Insurance Revenue

For decades banks and credit unions have struggled to profitably meet the life insurance needs of their clients.

Banks and credit unions have struggled for years to profitably meet the life insurance needs of their clients.

Now, the advent of the DoL Fiduciary Standard rule for retirement accounts creates more urgency to improve life insurance sales.  Many product lines are expected to experience fee compression, and a shift to advisory business could result in a short term dip in revenue, so firms are looking for ways to fill the revenue shortfall.

Advisors in banks and credit unions enjoy an advantage over other providers of financial advice because they have the support of the branch network and the client referrals branch staff generate. How valuable are these referrals? The market tells us how advisors value them.

Kehrer Bielan research estimates that 11% of US households have a written financial plan, but only 10% of those financial plans were obtained from a bank or credit union. This means only 1% of US households have obtained a financial plan where they bank.

In the wake of the Department of Labor Rule on the Fiduciary Standard, many banks with licensed or registered client-facing banking staff are considering dropping their “platform banker programs.”  These firms wonder how they will be able to implement the elements of a fiduciary standard with staff that turn over every 18 months on average, including ensuring that the investment advice offered is in the best interest of the customer, and providing an annual review of the client’s investment.