The age-old marriage vow, ’till death do us part,’ may serve as a fine expression of the permanence of the commitment between bride and groom. But as regards the pledge between advisor and client, the following modification may be in order: ’till value is no longer provided.’
The reason, producers would agree, is because the professional relationship effectively can live well past a client’s passing if the advisor secures the confidence of the client’s life insurance policy beneficiaries.
“The more that clients see us as valued advisors, the likelier their beneficiaries are to turn to us for help in managing death benefits proceeds or inherited assets,” says Todd Bramson, a senior associate with North Star Resource Group, Madison, Wis.
Aggregate death benefit proceeds are huge–and growing. U.S. insurers collectively paid $49.5 billion to policy beneficiaries in 2003, according to the National Association of Insurance Commissioners Annual Statement Database via National Underwriter Insurance Data Services/Highline Data. That’s up from $47.2 billion and $46.7 billion in 2002 and 2001, respectively.
How to keep these assets under management? An important first step, producers say, is to include beneficiaries–particularly spouses–in financial planning discussions with insured clients, both during the initial data gathering phase and when conducting follow-up reviews. Such broad-based talks take on added importance as clients edge into their retirement years, they add.
Derick Gant, president of Gant Investment Advisors, Toledo, Ohio, uses these reviews to acquaint beneficiaries with plan details and key documents to which they’re named parties, and to demonstrate the trust clients have vested in him. He seeks reaffirmation, too, of the insured’s faith in his ability to work with the beneficiary (usually a wife, he says) after the insured’s death.
“I tell clients, ‘you pick the person who you think will work best with your wife–someone who won’t condescend to her or talk over her head,’” says Gant.
Or leave her in the lurch. Ronnie Metcalf, a managing director for ING Financial Partners, Greenville, S.C., says that when life insurance policies are purchased independently of a comprehensive financial plan, beneficiaries frequently are at loss. Often, they’re uncertain about where to park proceeds or how to provide for other surviving family members.
ING connects with these prospective clients through “Successful Money Management” seminars at colleges and universities in Greenville. The two and one-half hour sessions, of which there are four, serve as a primer on investment vehicles and strategies.
The seminars typically attract from 85% to 90% of invited policy beneficiaries. A comparable percentage, says Metcalf, become long-term clients.