Independence Day 2014, now two weeks past as I write this column, was a time for most Americans to relax and gather with family and friends. For the more serious-minded among our compatriots, July 4 was also a time to reflect on America’s place in the world: the nation’s good fortune; the advantages it affords to those who strive to get ahead; and, whether by design or happenstance, shortcomings that impede the advancement of individuals, businesses and industries.
For life insurance producers and financial services professionals, such pros and cons are particularly topical now because of the unprecedented pace of change in their community. Technology — mobile devices, electronic application processing, online social networks — are forcing advisors to revamp their practices, in part to keep pace with changing social customs and rising consumer expectations about the ease and speed with which business should be conducted.
The changes extend to products. In a low interest rate environment, carriers that once boasted generous guarantees for living benefits and product riders are scaling back their offerings to stay in the black. That’s driving life insurance sales professionals to ratchet up the quality and scope of services.
Also to consider is a legislative and regulatory environment ever in flux. The industry faces continuing threats from Congress to the tax-favored treatment of life insurance. New tax and practice rules imposed by the IRS and industry regulators — the SEC, FINRA and the states — are increasing the compliance burden on advisors.
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Not least among the industry’s worries are fiduciary standards under considerations at the Securities and Exchange Commission and Department of Labor that could significantly increase the cost of doing business for advisors, prompting those less able to adapt to fold their practices.