For financial planner Jillian C. Nel, earning dual licenses to offer both insurance and securities was originally little more than a career stepping stone, the means to escape from behind an administrative desk into a full-fledged advisory position at the large broker-dealer that employed her at the time.
“It was a matter of me needing the licenses to transition into the kind of role I wanted,” she explains.
Little did Nel imagine then just how meaningful being dual-licensed—she owns Series 7 and 66 securities licenses, as well as a general insurance lines license in Texas, along with a CFP designation—would become for her clients and her practice at Legacy Asset Management, a Houston firm she joined in 2011. “It has allowed me to be a much better steward and fiduciary for my clients,” she says.
That emphasis on stewardship has been a catalyst for generating the referrals on which Nel has relied in building a thriving book of business that now includes some 200 clients (mainly small business owners and mass affluent households) and about $50 million in assets under management.
From client service to competitive positioning to staying ahead of the compliance curve, the benefits of becoming dual-licensed are increasingly difficult to ignore, says Paul M. Mallett, senior vice president and chief operating officer at Postema Marketing, an insurance-focused independent marketing organization headquartered in Defiance, Ohio. “Strategically, if you’re planning to stay in the [insurance and financial advice] business, being dual-licensed is something you should be looking at.”
More advisors are doing exactly that, he says. “Today, the percentage [of dually licensed advisors with whom we work] is quite small. But I can tell you that anytime I do a webinar or post a blog on the subject, it generates a great amount of interest. A lot of people are considering it. And for good reason.”
Seeing a Bigger Picture
Perhaps the most compelling reason for being dually licensed, says Mallett, “is to expand your horizons and your offerings, so you’re really providing value to your clients. That’s what it’s all about.”
From a client perspective, that value often lies in an advisor’s ability to pull together and execute a comprehensive financial plan that involves products from both realms, says Jeffrey N. Tomaneng, a financial advisor with Lincoln Investment Planning in Waltham, Massachusetts, who holds Series 7, 24, 63 and 65 registrations along with life, health and variable insurance licenses, as well as a CFP designation. “When you have dual licenses, you are more likely to research and learn products. And when that happens, it makes it easier to coordinate a plan for a client, and to implement your recommendations.”
Armed with dual licenses, an advisor is better positioned to serve a broader range of clients and to address a wider spectrum of their needs, adds Hank N. Mulvihill, Jr., principal at Mulvihill Asset Management in Richardson, Texas, who owns a Series 65 securities license along with multiple state life and health insurance licenses, plus a CFP designation. “It’s valuable from the consumer point of view because, sure, we can help them with investible assets, but that’s not where most people’s needs start. There’s a whole bunch of business just sitting there that people need help with before they become more affluent.”
Insurance know-how is a vital complement to investment management expertise, Nel, Tomaneng and Mulvihill concur. “I didn’t feel like I could be a good risk manager if I didn’t have both licenses,” says Nel. “I think you have to have a level of education and expertise with insurance, because the number one way to manage risk is with insurance.”
According to Tomaneng, dually licensed advisors are better equipped to emphasize and explain “concepts over products”—that is, to create solutions that coordinate securities with insurance to deliver growth while managing risk.
Advisors who lack an insurance license may find their hands are tied when it comes to implementing certain concepts and strategies. “You can’t do multi-generational planning and some kinds of trusts without insurance,” Mulvihill says. “There are situations where you can’t solve problems any other way” than with life insurance.
That dual expertise often proves invaluable in uncovering the very specific needs of individual clients, then tailoring strategies to address those needs, says Tomaneng. For example, having noted that a client has a strong defined benefit pension plan to provide income during retirement, he can steer the client away from purchasing an expensive annuity living benefit rider and deploy those assets elsewhere. “Having both licenses allows me to do a lot for my middle-market clients that I wouldn’t be able to do with only one kind of license.”