Ask the expert: How to handle suitability forms?

The question was: What is the best way to handle suitability forms for annuity sales? They are more comprehensive than they used to be, so it takes more time and effort to fill them out. the process seems cumbersome. Any ideas? The answer is: As any advisor in our industry knows, suitability has become a big issue for regulators and consumer advocates in the past couple years. As a result, suitability forms have become more detailed and comprehensive for carriers needing to get more information on which to judge the suitability of the transaction and compliance with suitability standards. It is essential that carriers have a clear picture of a client’s assets and financial situation to ensure that the product selected is both appropriate for the client’s situation as well it being in line with their financial goals. Of course, good financial advisors and agents are used to doing just that as a part of their assessment, and should use the opportunity to gather the additional information as a part of the sales process as well as the product selection process. Rather than viewing the suitability information as intrusive or bureaucratic paperwork, we suggest taking a different approach than the typical process. Many agents or advisors complete the suitability form at the end of the application process after the application itself as well as all of the disclosures have been filled out. We suggest to our producers that it be filled out first, as a part of the fact finding and needs analysis process. That way, it becomes part and parcel of that process and assists our producers to evaluate and verify upfront that the product they are recommending is the right one for this particular client. After all, depending on the way the clients answers these questions, how can you put them in a product until you know if it is suitable or not? In short, don’t view the suitability form as just another irritating form that needs to be completed. Use the suitability form to build your client’s trust that you are using the information appropriately in order to recommend products suitable for their particular situation. Van Lumbard
President
Ann Arbor Annuity Exchange
Ann Arbor, MI
www.annuity-exchange.com
[email protected]