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Spitting into the Winds of Change

Friday, April 17, 2015

Recently in a report from KPMG "Investing in the Future",  "...Trust is increasingly binary in nature. It is given instinctively but can be removed immediately if abused. This poses a particular challenge for the financial services industry, in which trust remains at an all-time low.  Whereas in the past technological innovation and advancements often resulted in companies increasing the complexity of products and services, consumer demand is now clearly favoring transparency and simplicity. This is particularly true in the financial services industry as it grapples to restore trust, recover post-crisis and respond to a raft of regulatory changes designed to improve transparency."

Megatrends are the drivers of change and this article by KPMG these megatrends are all revolving around the client. While megatrends present challenges, they also bring unprecedented opportunities. One such megatrend that has recently been in the media is the fiduciary rules from the Department of Labor and SEC.  In another article by Blaine Aikin "Fiduciary Foes are Splitting into the Wind" he says that megatrends will demand that advisers align themselves with clients and "all that the new regulations would do is codify what the megatrends of capitalism, technology and social values have already started. Those who are fighting for a “right” to continue to disguise sales activities as advice are spitting into the winds of change. The bygone era that offered advantages to sales-centric businesses was based on conditions that no longer exist or will soon disappear."

Transparency ensures accountability. Can you account to clients 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? Given findings from independent studies[1] indicate there can be as much as 80% difference between best-available rates and terms and poorly-priced products, the opportunity to bring reduced policy expenses and/or improved performance of invested assets underlying policy cash values can be both significant and meaningful today.

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.  Get up to 3 Veralytic research reports under our NO-Risk trial subscription.


[1]Tillinghast Towers Perrin study referenced in the May 2003 issue of Trust & Estates, CASCO survey reported in the April 1999 issue of Trust & Estates magazine, and research from database.

re: Spitting into the Winds of Change

Friday, April 17, 2015 Scot Thomas

Well done and timely article and wish the mainstream media would pick this one up and give it play time.

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