Life insurance is an important part of a client’s financial future – but does that mean advisors should be the ones to sell it?
Three industry insiders give their views on this contentious issue.
Jason M. Pereira, Senior financial consultant, Woodgate Financial & IPC Investment Corp.:
“There are insurance products that provide investment opportunities, specifically universal life and whole life products, that are very effective tax investment tools. If you do not have access to that, you’re limiting the options you can offer clients.
On top of the tax sheltering aspects of life policies, there are also the seg funds that advisors won’t have access to. Noninsurance-licensed advisors also don’t have access to annuities, which become very valuable for retirees.
I think advisors should at least be licensed and aware of what’s going on. If they don’t want to sell the products themselves because they don’t understand the process, team up with someone else.”
Heather Phillips, Vice president of business development, Sterling Mutuals:
“I think it’s a very good idea, because it is a complimentary licence. There are two sides to the financial services business: the wealth side (mutual funds, ETFs, stocks and bonds) and the risk management side (life insurance products).
Segregated funds can be considered a life insurance product and a wealth product. If a client wants to invest in mutual funds, has no tolerance for volatility and wants their principal guaranteed, then segregated funds may meet the client’s objectives. When you are a certified financial planner, you have an obligation to talk about [both] wealth products and insurance products with your client.”
Ken MacCoy, Principal, RitePartner Financial Services:
“If you specialize in financial planning, then you’re only concerned with one regulatory body and continuing education requirements for one licence. But who is taking care of your client’s risk planning?
If you are committed to taking care of all of your client’s planning, you need to be dual-licensed. Dual licensing allows you to offer your client more products and services, making you much more versatile in a competitive market. However, it also means more regulatory concerns and CE requirements.
I recommend specializing in financial planning and partnering with an independent risk planning specialist, such as myself. It’s a win-win for all.”
Jason M. Pereira, Senior financial consultant, Woodgate Financial & IPC Investment Corp.:“There are insurance products that provide investment opportunities, specifically universal life and whole life products, that are very effective tax investment tools. If you do not have access to that, you’re limiting the options you can offer clients.
On top of the tax sheltering aspects of life policies, there are also the seg funds that advisors won’t have access to. Noninsurance-licensed advisors also don’t have access to annuities, which become very valuable for retirees.
I think advisors should at least be licensed and aware of what’s going on. If they don’t want to sell the products themselves because they don’t understand the process, team up with someone else.”
Heather Phillips, Vice president of business development, Sterling Mutuals:“I think it’s a very good idea, because it is a complimentary licence. There are two sides to the financial services business: the wealth side (mutual funds, ETFs, stocks and bonds) and the risk management side (life insurance products).
Segregated funds can be considered a life insurance product and a wealth product. If a client wants to invest in mutual funds, has no tolerance for volatility and wants their principal guaranteed, then segregated funds may meet the client’s objectives. When you are a certified financial planner, you have an obligation to talk about [both] wealth products and insurance products with your client.”
Ken MacCoy, Principal, RitePartner Financial Services:“If you specialize in financial planning, then you’re only concerned with one regulatory body and continuing education requirements for one licence. But who is taking care of your client’s risk planning?
If you are committed to taking care of all of your client’s planning, you need to be dual-licensed. Dual licensing allows you to offer your client more products and services, making you much more versatile in a competitive market. However, it also means more regulatory concerns and CE requirements.
I recommend specializing in financial planning and partnering with an independent risk planning specialist, such as myself. It’s a win-win for all.”
