The Real Costs of Fractional (Modal) Premiums

[DHK]

I could be wrong, but not all states recognize that license.

And other states allow fee based analysis with a normal agents license.

Just as with producer licensing is a state-by-state issuance, so is an analyst license. However, I admit that I haven't done a state-by-state search for such licensing. I know it exists in TX and CA for sure.

But he sells policies too. He is the insurance equivalent of a "hybrid firm". At least most state insurance regs that cover fee based agents prohibit double dipping.

And that would be where the language in the engagement letter needs to be specific as to when the duties of the analyst end, and when his duties as an agent would begin.

Once the analysis is done, is there a new recommendation to fit the client's needs where compensation is paid by the insurance company? Some kind of language like this MAY be in the engagement agreement (I would think) and show that the recommendation may be handled by any appropriately licensed individual, and not necessarily by Michael himself.

I'm not a compliance expert, but such language would make sense to me in the engagement agreement. Lots of standards to juggle.

 

[scagnt83]

An insurance analyst works for the client:

Life and Disability Insurance Analyst



The mere act of receiving a fee is what creates the fiduciary responsibility because the contract now has consideration.

Consideration legal definition of consideration


I doubt that the standards in TX are much different.

Where in any of that are those analysts to a defined legal fiduciary standard?

All that says is that they cant double dip. Nothing new and not a Fiduciary. (you know all of this so I dont follow I guess is what im saying)

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Just as with producer licensing is a state-by-state issuance, so is an analyst license. However, I admit that I haven't done a state-by-state search for such licensing. I know it exists in TX and CA for sure.

States make allowances for licensed that they regulate within that state. Do they allow licenses or services that do not exist and are not regulated within that state? I honestly do not know.

 

[DHK]

I think the confusion is that you're looking for state or federal mandates of a fiduciary standard, when the standard is truly between the licensed analyst and the paying client.

Perhaps the fiduciary standard is merely implied on a state or federal level, but it certainly should be specific in the engagement agreement whose loyalty you are advising under, since they paid a fee for the analysis under the engagement agreement/contract.

Without an agreement with consideration, there is NO "fiduciary standard" being enforced because he is not HIRED as a fiduciary consultant for his work. (However, he is PROMOTING himself at the higher standard, but we're looking purely at legal liabilities, not just perception of expertise.)

No contract + no fee = no fiduciary relationship.

(That's my layman's train of thought on this.)

 

[scagnt83]

If by "not a real thing" you mean, has not been existence before me, I think you are right. But now that I have declared myself in this capacity, that statement is no longer true.

..............................................


The fiduciary obligation is not established by statute, but instead by contract.

Like i said. Its not a real thing.

Some contract you made up does not make you a Fiduciary. State or Federal regulations and licensing makes you a Fiduciary.



But it certainly does hold you to a higher standard and exposure from a liability standpoint if you get sued.

And that fact that it does not exist and is not a regulated title would only work against you in that situation. It easily could be argued that you market that title with the "appearance" of being a legally regulated title. That my friend is illegal and you could lose your license over it.


Giving the appearance that you have a certain capacity that is state or federally regulated when you do not have it is illegal. And not a good thing if the sh*t hits the fan for you.

 

[MichaelBurton]

Well, if I were to put together a fiduciary agreement - or some kind of engagement agreement, it would have to be in CONSIDERATION of something = money.

That means I would have to have the appropriate licenses as needed (insurance analyst for insurance policy analysis; Series 65 for securities analysis). It could also mean having a separate business entity as you NEVER want checks made payable to a producer's name directly.

Then you would need to hire an attorney to draft the agreement as to your responsibilities and when the engagement agreement ends and the duties have been fulfilled under the agreement.

Lots of time and money to do that properly. I'm sure you've done that, but that's not for everyone on this board.

www.youtube.com/watch?v=RiDuxsn8Wrs

You bet your ass it was! LOL! Which is why I pop off when someone implies it is a marketing gimmick!

BTW, the consideration for my contract CAN be money; but, it doesn't require it. I do require an exclusive right to represent, which is similar to the contract that establishes a fiduciary relationship in real estate. The exclusive right to represent is considered valid legal consideration. Or at least that's what my attorney said.

Scag, the contract is carefully drawn up to where I will never double-dip the client.

 

[scagnt83]

I think the confusion is that you're looking for state or federal mandates of a fiduciary standard, when the standard is truly between the licensed analyst and the paying client.

Perhaps the fiduciary standard is merely implied on a state or federal level, but it certainly should be specific in the engagement agreement whose loyalty you are advising under, since they paid a fee for the analysis under the engagement agreement/contract.

The term Fiduciary is a legal term. It is a regulated term by state and federal regulators. Calling yourself a Fiduciary, contract or no contract, does not make you a Fiduciary in the eyes of the law.

It might cause you to be held to a higher standard in a court of law if you happen to get sued. But it does not make you a LEGAL Fiduciary in the eyes of the US Government.

It is also illegal to imply that you have a state or federally regulated title when you do not....

 

[DHK]

Why does a fiduciary standard HAVE to come from a federal or state regulator?

Want a laugh? Realtors are fiduciaries.

http://www.realtor.org/sites/default/files/handouts-and-brochures/2014/nar-fiduciary-duty-032213.pdf

A real estate broker who becomes an agent of a seller or buyer, either intentionally through the execution of a written agreement, or unintentionally by a course of conduct, will be deemed to be a fiduciary. Fiduciary duties are the highest duties known to the law. Classic examples of fiduciaries are trustees, executors, and guardians. As a fiduciary, a real estate broker will be held under the law to owe certain specific duties to his principal, in addition to any duties or obligations set forth in a listing agreement or other contract of employment.

 

[scagnt83]

Why does a fiduciary standard HAVE to come from a federal or state regulator?

Want a laugh? Realtors are fiduciaries.

http://www.realtor.org/sites/default/files/handouts-and-brochures/2014/nar-fiduciary-duty-032213.pdf

They are Fiduciaries because the law says they are....

Giving yourself the title of "Fiduciary" is a legally regulated term.


Our new friend could say he uses a "Fiduciary like analysis process" or something like that. But there is no legal basis or authority for him to call himself a named Fiduciary of the client.

 

[DHK]

The National Association of Realtors has as much law behind them as the CFP board of standards - and THEY assert that CFPs are also fiduciaries, REGARDLESS of their other licensing.

There is nothing in California that requires a real estate agent to be a Realtor (professional association member).

Requirements to Apply for a Real Estate Salesperson License - CalBRE

California Bureau of Real Estate

 

[MichaelBurton]

Like i said. Its not a real thing.

Some contract you made up does not make you a Fiduciary. State or Federal regulations and licensing makes you a Fiduciary.



But it certainly does hold you to a higher standard and exposure from a liability standpoint if you get sued.

And that fact that it does not exist and is not a regulated title would only work against you in that situation. It easily could be argued that you market that title with the "appearance" of being a legally regulated title. That my friend is illegal and you could lose your license over it.


Giving the appearance that you have a certain capacity that is state or federally regulated when you do not have it is illegal. And not a good thing if the sh*t hits the fan for you.

I really don't know what else to say, Scag. This isn't a gimmick. And I've counted the costs of the risk. It's the way I feel most comfortable operating in the business, where I can be at peace with myself.

It's not for you, great. I get it. Let's agree to move on, man.

Life is too short for this. And the freaking table I originally posted on this god-forsaken thread was never meant to stir this up.

Like one of the other posters said, it is nothing more than a "ahh, ok" thing. But, for crying out loud, why not just say that? You know, "Ahh, ok, interesting." Or, "Hmm, never saw it like that before."

It was just a window into a fragment of the life insurance transaction.

Not a mechanism to drive a sale or, god forbid, twist someone out of a decent policy.

Holy ****, these back-links have NOT been worth it!

Good night, folks.