Consumers continue to search for advisors who can provide unbiased counsel in a fee-engagement venue that is free of conflict. Yet, only a few firms are providing such services. The unwillingness of the financial services industry to properly identify the variety of client assets and their related risk issues creates much of the confusion in trying to adopt an overall fiduciary standard.

Our mission is to fill this gaping “black hole” and to serve a need in the evolving Financial Planning / Fee-Advisory industry by providing standards of excellence and a process that complies with the principles of Fiduciary Responsibility.

The basic foundation of financial planning is that of risk management. Embedded in the process is managing the risk of assets. Assets represent more than just equities. A residence is an asset, the ability to produce income is an asset, a business is an asset, and the list goes on. Risk Management Planning is a collaborative process in which all risks should be properly identified so that the client, through resolve planning and discussion, can determine how best to manage each risk.

Although fiduciary responsibility should be all-encompassing to financial planning, the industry has confined the issue to that of giving investment advice. However, if we drill deeper into the functionality of total asset management, isn’t there a broader responsibility to the risk management issue? It may be the risk of not having enough capital for retirement, it may be the risk of losing capital that has already been accumulated, it may be the risk of disability or any change in health that may affect the ability to provide income, or it may also be the risk of death. What about the risk of business value reduction due to the lack of business succession planning? What about the risk of estate depreciation due to tax liability? A Risk Analysis Statement should disclose those issues that have to be addressed.

Too often, the focus of discussion is on “product” without an understanding of the risk and all associated elements of the risk. From a fiduciary viewpoint, this makes the decision extremely difficult as to what policy style and premium design would best resolve the risk. Therefore, the result is not in the client’s best interest.

  1. Selling a product does not constitute risk management, nor does it fulfill the fiduciary duties of an advisor. Not having the tools and capacity to provide an unbiased assessment of non-equity risk will make it impossible to provide clearly defined options to resolve and manage those risks.
  2. Buying a product and being unaware of a risk does not remove that risk or make it disappear.

Financial Planning is a functional engagement of a sustained relationship between the advisor and the client. This relationship encompasses the development and monitoring of asset strategies and risk management in a coordinated and synchronized fashion. Regardless of how a firm may promote itself in creating a certain image, the fact remains that lack of full disclosure, both to the product and the process, does not promote the client's best interest.

One of the primary components of the financial planning process involves the use of life insurance. Whether the need is for income replacement, estate taxes, asset protection and preservation, wealth transfer, charitable objectives, or all of the various elements of business planning - life insurance is a primary tool for identified risk management issues and/or asset management.

The practice of financial planning and fee-advisory services require the use and development of any number of strategies that could be beneficial to the overall success of a particular client. How can existing, needed, or proposed life insurance be analyzed and designed with a methodology and format that is applicable to fiduciary standards of responsibility?

Our firm has focused on these issues and developed the defining qualities that can bring life insurance and annuity planning into the same fiduciary environment, with policy design and implementation, that fee-advisory firms have established with equity asset management. Our Life Analyzer is a proprietary software system that can reverse engineer and "scrub" policy illustrations, allowing for a transparent analysis of cost and capital efficiencies.

In addition, although our experience has evolved out of the commission insurance culture, we can present these services without the bias of commission influence. In many cases, the use of fully disclosed no-load insurance is the vehicle of choice. It serves as a standard for policy comparisons, and often provides the greatest cost and capital efficiencies for the client. However, a commission-based policy may be best suited, depending on the policy style, table-rating offer, and the particular circumstances of the client.

Therefore, in either situation, the client we service can take comfort in the fact that the summaries and recommendations put forth will be for their BEST interest, validated by full disclosure and transparency.

There is an old adage that says “You get what you pay for”. Well, in our experience over the last 15 plus years of doing insurance policy and risk analysis, the statistics are that 87% of in-force policies were problematic. In these cases, the client needed a risk management plan. Instead, they paid the MAXIMUM amount of compensation for the product and received MINIMUM amount of risk management planning. They did NOT get what they paid for.

If we can be of service to you or should you have any questions, please do not hesitate to contact us directly at (586) 745-7037.