Historically, life insurance and annuities were not every financial advisor’s favorite products to sell. They came with not-in-good-order (NIGO) challenges and workflow speedbumps. It was often easier to avoid selling them.
Things are changing.
Broker-dealers have long seen the value in advisors offering these products as part of a holistic financial plan. These products offer tax benefits, retirement income guarantees, hedges against loss, and protection of assets.
To make sales of complex insurance and annuity products simple for advisors, broker-dealers were among the first to adopt e-application solutions. Now, they are doing even more. They are investing in modern technology that removes more of the friction of selling life and annuities.
Good Timing
Based on current economic conditions, the time is right for advisors to offer life and annuities to their clients.
Fixed annuities thrive in a high and rising interest rate environment, while indexed and variable annuities help clients hedge against economic uncertainty—especially important for those close to retirement.
Life insurance has its own tax and asset protection benefits. Plus, all touchpoints advisors have with a client matters. The more ways advisors serve clients, the more likely they will stick with the advisor long-term.
Advisors know the benefits of selling life and annuities, but they are also aware of their challenges. What solutions are broker-dealers providing to overcome these challenges?
Problem Solving
Many broker-dealers have identified the barriers to selling more life insurance and annuities. They are finding ways to reduce this friction with technology.
Working in Multiple Systems
Forty percent of financial advisors say jumping between tools for different needs is a challenge in their existing technology setup. If a client expresses interest in different product lines, advisors must often log into a separate system.
On the surface, this gear-shifting may not seem like a big deal. In practice, it is a significant barrier. It slows the process down and wastes time—for both the advisor and the client.
Some insurance sales platforms solve this challenge in a couple of ways. For starters, single sign-on (SSO) compatibility makes it easy for advisors to jump between systems. Also, it prevents the advisor from reentering client data they already have, saving valuable selling time.
In addition, some of today’s top solutions—most notably the FireLight sales platform—offer APIs to streamline the process. Broker-dealers can embed FireLight’s capabilities into the system their advisors work in every day. No more friction. Problem solved.
Learning a New Platform
Advisors are familiar with the system they work in daily. They know where the light switches are. One of the barriers to selling life insurance and annuities is learning a new solution.
Advisors need a platform that is easy to navigate. One that offers guidance and guard rails that ensure compliance and prevent errors.
FireLight is a prime example. It uses wizard-like workflows to take advisors through the process step by step. It includes all carrier and distributor business and suitability rules and any broker-dealer required documents. If advisors miss any fields, the solution takes them right to the errors. And, it walks them through the electronic signing process.
Product Training and Complexity
Depending on the product, life insurance and annuities can be complex. Advisors may not be up to date with all required annuity-specific product training. Often, they will rely on an annuity specialist team, sometimes referred to as a concierge desk, to help with product proposals and applications. But, this can be a slow process and force advisors to repeat work.
Some broker-dealers have identified technology to make this process faster and easier.
Top sales platforms may include features that streamline concierge desk interaction. The FireLight sales platform, for example, offers a ticketing process. Advisors open a ticket and enter basic information about the client and what they are looking for. Then, they submit the ticket to the desk, which runs illustrations and sends them to the advisors. All from inside the platform.
In other words, there is no need for phone calls, snail mail, or even email. Advisors even have a defensible audit trail because the entire process is tracked digitally.
Fear of a Poor Client Experience
If advisors do not sell life insurance or annuity policies daily, they might be afraid the process could go poorly. Their fears are not unfounded. Sixty-five percent of financial advisors say they have lost business because their technology did not meet client expectations.
A poor sales experience can happen due to an advisor’s lack of familiarity with the products or process, but we have seen technology helps overcome this. Yet there’s another danger that can ruin a client’s experience: a not-in-good-order (NIGO) application.
NIGOs happen when one or more errors exist with the application. If an application is not in-good-order, it is returned for the error to be corrected. Clients have high expectations. They want quick and easy buying experiences. Their expectations do not include re-doing the application because of errors.
Advisors are right to be concerned about NIGOs. On average, more than 60% of annuity applications are deemed NIGO.
The good news: technology overcomes this challenge. In fact, Hexure’s FireLight sales platform averages in-good-order rates between 90% and 96%. One prominent carrier reported their NIGO rates dropping from 87% to 12% within just a few months of adopting FireLight.
This means advisors do not have to avoid life and annuities for fear of providing a bad experience. With FireLight, advisors are likely to provide the fastest and easiest life insurance or annuity sales process that the client has experienced.
Meeting the Challenge
Broker-dealers and financial advisors want to offer clients life insurance and annuities. The demand is there. The benefits for clients are there. The time is right. Broker-dealers are rising to the challenge of making life and annuity sales faster, easier and more streamlined with technology solutions. With FireLight, advisors can give clients a modern sales experience that meets their expectations.
Reprinted with permission from ThinkAdvisors.com June 2023 © 2023 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or [email protected].
