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Client fees likely more than advisers think

Thursday, July 31, 2014

In a recent article Ron Carson, chief executive of Carson Wealth Management and founder of Peak Advisor Alliance said, “Advisers have to list their fees, but they have to do an even better job than that, we need to sit down with clients and compare the cost of different portfolios, putting it all out there. Clients care about total costs [and]…this is going to become a bigger and bigger issue because the next generation is much smarter and savvier about getting information,” he said. “Advisers need to be providing it to them proactively.”

Some advisers already see the value in offering more complete cost information to clients. In a different article, Jeff Wildes of Wildes Financial Strategies said, “It may not be the conventional wisdom, but a client made more aware of fees or commission payments is a more loyal client, you can overpay whether you are paying fees or commissions.”

Advisers need to accurately know what their clients are paying for different investment strategies and share those details with clients so they see the differences. Veralytic does the same for life insurance. Investments and life insurance share similar reporting systems where costs can be buried in prospectus documents and easily overlooked. To add to the consumers confusion, agents/brokers (too) often use illustrations of HYPOTHETICAL policy performance to compete, comparing illustrations can be "misleading" and is "strictly prohibited" by the chief regulatory body of the financial services industry, and are "fundamentally inappropriate" according to a study by the chief actuarial body of the life insurance industry, and "are subject to a high degree of fluctuation" and thus not reliable for determining the suitability of a given policy according to the U.S. Office of the Comptroller of the Currency.

Clients don’t know what they are actually paying for cost of insurance charges (COIs), fixed administrations expenses (FAEs), cash value based “wrap fees” (M&Es), and premium loads or what they are actually getting in the performance of invested assets underlying policy cash values.

Veralytic is the only patented, objective and rules-based research tool that goes beyond the overly-simplistic comparisons of illustrations of hypothetical policy values that can be considered “misleading” and “inappropriate” by both financial and insurance industry authorities. Veralytic’s independent research reports provide a facts-based solution that is both compliant with industry regulations and established case law.

Veralytic is simply the fastest, easiest, and most comprehensive and cost-effective way to independently verify to clients and their advisors whether or not the pricing and performance of existing or proposed life insurance is in their best interest. Only Veralytic is accepted for independent client representation, endorsed by the New York Bankers Association (NYBA) and compliant with industry regulations and established case law.

Use the Veralytic Reports to determine the appropriateness of pricing, the reasonableness of performance expectations for invested assets underlying policy cash values, and overall suitability for your (client’s) policies based on the 5 factors of suitability. Click here and get up to 3 Veralyticresearch reports under our NO-Risk trial subscription.

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