The Role Of Financial Advisors in Insurance

January 20, 2023

David Donato and Dan Moore

Fundamentally, insurance strategies have been focused primarily on security and protection. Sophisticated advisors, however, know that insurance can be leveraged as a flexible, multi-purpose tool in the financial marketplace. Insurance policies are being used by individuals, their families, and their businesses in a variety of ways to provide not just protection and security, but also to act as vehicles that can facilitate both tax efficient wealth accumulation and wealth transfer.   

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The best financial planners are the ones who take a holistic approach to serving their clients. Yes, they’re looking to accumulate assets, but the picture expands beyond that, into longer-term wealth management goals like the efficient use of the wealth that’s already there, and how to incorporate broader estate planning goals to the client’s best benefit. 

Insurance plays a vital role in all of these areas:

  • Income/Wealth security and protection
  • Tax-efficient wealth utilization
  • Tax-efficient wealth transfer
  • Risk management structure and framework
  • Asset allocations

We live in a world of increasing specialization, and this is certainly true within financial services. All of us who have made a career here have seen the tools, best practices, and features expand greatly in recent decades, particularly in the past 15 years. 

You are the primary advisor, the one facing the client square in the eye, and you will always be acting as the quarterback of the client relationship – it is you who understands the client’s wants, goals, and values. 

As the quarterback, it’s your objective – and a key part of your own skillset – to deploy  the other financial professionals needed to meet that client’s goals and best uphold their values in the context of their overall financial plan.

Estate planners can provide excellent value by drawing up the proper trust, but insurance experts are also needed to determine how to best fund that trust, and how to correctly and most efficiently structure the insurance product within it. 

This is where the knowledge and experience of Leo Insurance can step in and provide immediate value for you and your client.

More than Just Transactions

We understand that many wealth managers, regardless of focus or title, are in some way licensed for insurance, meaning you technically have the ability to transact. Financial Advisors who are truly elite, the ones that really care about giving the best advice, these are the advisors who know they bring in an elite insurance specialist when it comes to most medically underwritten insurance contracts. 

Today’s insurance products involve a very high level of detail and specificity, as has become the case with most areas of wealth management. Similar to tax, legal, and investment knowledge, insurance has become siloed and specialized in the modern wealth management landscape. 

Take long-term care insurance, for example. We can attest to just how much long-term care insurance has changed over the past 10 years. A big part of the value that Leo Insurance provides in the long-term care space is experience with how flexible the products have become. In contrast to years past, the types of long-term care insurance products available now can fit many more financial situations. Previously, long-term care might have only been applicable to people in a narrow band of wealth, maybe between $250,000 and $500,000 in net worth. But now there are products that really speak to people across the entire wealth spectrum, including high net worth. 

Most financial advisors are focused on investing and wealth management and preservation, and “calling a play” for insurance expertise is the right move for these managers. Being an expert advisor is mostly about knowing what you’re an expert in, and when to call on the expertise of others. And in the high net worth and ultra-high net worth communities, you’ll be expected to have ready access to all the outside financial strategies they could need. That’s how you’ll solidify the relationship for yourself, and it’s what we’re best at here at Leo Insurance. 

Even the simplest item, such as a recommendation for a basic term life policy, today has a tremendous amount of nuance associated with it. What are its conversion features? Can this insurance carrier manage face amount deductions if requested by the client? What are the underwriting guidelines per carrier for the particular demographics and profile of my client? Do they have an accelerated program, so that if I transacted with Company X instead of Company Y, could I get my client approved in five days without an exam? 

The Right Tool for the Job

When situations arise with your clients, or when mitigating specific risks is a priority, it’s time for the quarterback to call a play for insurance expertise. In the case of disability insurance for example, while some individuals have a disability policy offered by or through their employer, there’s a lot of misunderstanding with regard to whether that coverage is sufficient. For example, employer-provided plans tend to have monthly caps that can be problematic for employees earning over $100k/year. And unlike individually owned long-term disability, group benefits can be fully taxable. These are obviously issues for clients and advisors to understand and navigate. 

Business owners also find themselves with intricate needs for customized insurance products to protect their business and business interests – not only if something happens to themselves, but if something happens to one of their partners. The utility of life insurance, key person insurance, and buy/sell agreements is vast, but so are the complexities of navigating transactions in these areas.

When having discussions with clients on these matters, it’s important to point out that not just permanent disruptions can be mitigated with insurance, but also temporary disruptions. A situation where the client or a business partner is unable to work for just a few months can still cause sizable disruptions to income streams, and result in drawdowns of existing assets.

Trust – Our Most Precious Commodity

Ensuring that your client has a fair and positive experience is key, and our partnerships with advisors are based on putting our best foot forward for the client at all times. We work with fiduciaries just like you, and our relationships with other advisors are built on trust, as are yours. We know that you’ve likely already developed that trust with your client, and any partnership you make is creating an extension of that trust you’ve earned for yourself. 

There’s so much that goes into ensuring a smooth experience for the client, and getting them the best possible outcome across a range of scenarios – the very scenarios you have come to know and discuss with your client. It’s about doing both the big things right and also the little things right, like responding promptly to queries, and solving potential issues before they ever grow into problems. Other advisors choose to work with Leo Insurance because we know that by doing these things well, we can provide you with seamless, bolstered resources for your client. We win when you win, which is as it should be.

Financial services have become ultra specialized in recent decades, and mastery of just one focus area is about all one person can manage on their own. Estate planners, financial planners, investment advisors, and legal advisors will all at some point need to lean upon dedicated insurance expertise, just as we need to lean on you for your own expertise. We pride ourselves on making tailored recommendations and solutions that integrate into your existing financial, wealth management, and estate plans. Together we can provide the best overall outcomes and truly fulfill our own roles as stewards for our clients. 


Disclosures and Definitions

The information provided is for educational purposes only. The views expressed here are those of the author and may not represent the views of Leo Wealth. Neither Leo Wealth nor the author makes any warranty or representation as to the accuracy, completeness, or reliability of this information. Please be advised that this content may contain errors, is subject to revision at all times, and should not be relied upon for any purpose. Under no circumstances shall Leo Wealth be liable to you or anyone else for damage stemming from the use or misuse of this information. Neither Leo Wealth or the author offers legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.