Should Life Insurance Agents Become Financial Planners?

[insurehound]

Just curious what you guys and gals thought of a recent email I received from a GA:

"Rather than resist the shift to the financial advisor, embrace it. This can look any number of ways, and two that occur to me are obtaining the CFP designation, or aligning with CFP's as centers of influence much in the way we have viewed CPA's historically. The public really has no idea what a Chartered Life Underwriter is, nor do they care to learn. We have been out-marketed by the CFP organization, and it's time to accept it. Maybe joining the local CFP chapter is a good first step."

 

[Full Throttle]

What the email forgot to mention is that even though more people recognize a CFP than a CLU designation, the majority could care less about either one. It's for your knowledge, the marketing appeal is fairly limited.

That being said, most "financial advisors" are not financial advisors, they are investment advisors. When it comes to insurance, many are just a clueless as many insurance advisors are about investments.

You can do a lot for people by asking more questions about their situation. Some will wan that help, some will not. You can do a good job with it if you have a knowlege base deep enough to know what you are doing. That being said, financial planning is different than picking investments. Most investment advisors don't even pick investments, they hire a 3rd party manager and collect an assets based fee for the planning.

 

[insurehound]

Full Throttle, I couldn't agree with you more.

 

[xrac]

You could not pay me to acquire a CFP designation. Who needs another regulatory entity to pay fees to and to report to. I definitely won't do it voluntarily.

 

[DHK]

You want to "align" with someone who has a greater 'fiduciary' standard than you do?

And will torpedo your permanent life insurance proposal?

And recommend to buy term insurance and save the difference with them?

This is an email from someone who just doesn't know any better, or had been reading the kool-aid magazines for far too long. (Probably both).

I wouldn't be trying to create competition for myself where none existed before.

 

[Golfnut2112]

You could not pay me to acquire a CFP designation. Who needs another regulatory entity to pay fees to and to report to. I definitely won't do it voluntarily.

In a previous post you said I must know more about golf than insurance, after reading your post I'm sure I forgot more about insurance than you know.

Back to the OP, I have both the CLU and CFP, and for me the CFP is more important. I deal mainly in the middle to upper middle market and it really never comes into play, however about once or twice a year I come across someone who is very wealthy and they usually ask about your credentials. And that usually happens only on the investment side. If I was looking for an accountant and asked if he was a CPA and he gave me the response xrac gave you I would get the hell out of there!!

 

[Pangaea]

You want to "align" with someone who has a greater 'fiduciary' standard than you do?

And will torpedo your permanent life insurance proposal?

And recommend to buy term insurance and save the difference with them?

This is an email from someone who just doesn't know any better, or had been reading the kool-aid magazines for far too long. (Probably both).

I wouldn't be trying to create competition for myself where none existed before.

I like it, why let them out of your sight? Be their steward and let them depend on and trust in you. Reminds me of how in the mortgage biz they call real estate attorneys "deal killers".

 

[VolAgent]

In a previous post you said I must know more about golf than insurance, after reading your post I'm sure I forgot more about insurance than you know.

Back to the OP, I have both the CLU and CFP, and for me the CFP is more important. I deal mainly in the middle to upper middle market and it really never comes into play, however about once or twice a year I come across someone who is very wealthy and they usually ask about your credentials. And that usually happens only on the investment side. If I was looking for an accountant and asked if he was a CPA and he gave me the response xrac gave you I would get the hell out of there!!

Don't ever compare the CFP to the CPA. One actually means something, the other is marketing hype.

 

[xrac]

In a previous post you said I must know more about golf than insurance, after reading your post I'm sure I forgot more about insurance than you know.

Back to the OP, I have both the CLU and CFP, and for me the CFP is more important. I deal mainly in the middle to upper middle market and it really never comes into play, however about once or twice a year I come across someone who is very wealthy and they usually ask about your credentials. And that usually happens only on the investment side. If I was looking for an accountant and asked if he was a CPA and he gave me the response xrac gave you I would get the hell out of there!!

Professional designations do not impress me and I do not think they impress most people. I am an excellent test taker and I have held professional designations in nonfinancial fields. Because someone holds a CFP doesn't mean they know what they are doing.

The difference in a CPA designation and other designations is that in the accounting field CPA is pretty clear cut. In the financial field as you have pointed out there are a confusing number of designations: CFP, ChFC, CIMA, RFP, CFA, CWM, CAM, and MFP to name a few. There is nothing wrong with the education that goes into any of these. There is something wrong with the organization that overseees the CFP in my opinion.

Is FPA Membership Declining Because Of Its Fiduciary Views, Or In Spite Of Them? - kitces.com | Nerd's Eye View

 

[Johnnymc]

My FMO can beat up your IMO.