One of the challenges we’ve had with being a fee-only financial advisory firm is that we cannot take care of our clients’ insurance needs ourselves, because insurance nearly always pays a commission and we’ve vowed to keep commission-related conflicts of interest out of our business model.
While we don’t believe all commissions are “evil”, or that a person can’t choose to act in a client’s best interest when putting a product in front of them, commissions will always pose a possible compromise to our objectivity as your advisor.
The dilemma is, insurance is crucial to a successful financial plan. However, life insurance (and annuities) are expensive, complicated products that we have seen misrepresented and sold inappropriately so often, it’s almost comical. You can never completely trust you’ve got the best possible product for you, when it’s sold by agents who live on commission and have to “make the sale”, at any cost.
Also, insurance companies and their sales reps are not stringently regulated and the industry is a powerful one (successfully lobbying against the recent Department of Labor Fiduciary Rule, for instance); it’s literally a matter of caveat emptor (“let the buyer beware”).
We’ve wrestled with this dilemma for years: do we bring insurance sales in-house to control your experience as a client, or do we refer you to an insurance company (or specific agent), that we can trust to do only what you need, and then walk away from bigger commissions?
Thankfully, we found a solution to that problem. We are proud to have two insurance partners our clients can reach out to with confidence:
Ladder is a new term insurance firm whose agents work on salary and the company charges no additional fees. They sell only term life insurance (nearly always the correct choice for our younger clients), and allow you to “step up” and “step down” your coverage as you need for your circumstances. We love this idea, because it goes along with our financial planning philosophy of working in “LifeCycles”.
For more complicated insurance needs, we recommend LLIS, who have a variety of insurance companies and product lines to work with. Like Ladder, LLIS agents work on a salary, and the company shops your insurance needs out to several companies in order to secure the best price.
And best of all, both companies are created to work with us as your financial planner. Both allow us as your advisor to assist in your product selection and oversee your experience.
(And you can rest easy knowing that neither one gives us any commission, referral fee, or other form of compensation when working with our clients.)