To serve the growing fiduciary movement, a relatively new service model has sprung up: Outsourced Insurance Desks (OIDs). OIDs help RIA firms broaden their holistic offerings to include annuities and insurance regardless of whether the IARs at the firm are insurance licensed or registered with FINRA.

They also help RIA firms manage risk in two distinct ways: 1) various client risks may be transferred to insurance companies, and 2) transactional risk is transferred to the OID as agency of record on all policies.

Here are three steps for onboarding an outsourced insurance desk (OID).

Step 1: due diligence

Talk to outsourced insurance desks about the services and solutions they offer. If you haven’t considered annuities or insurance in your client offerings because you don’t think they fit the fiduciary model, you may not be aware of the tremendous innovation of the last 5 – 10 years.

Commission-free annuities and even variable universal life insurance solutions have been built to fit the fiduciary model. They are billable, easily connected to portfolio management systems, and simple to use.

Learn how each OID’s solutions can be integrated, how they connect to your preferred technologies, if they own their own broker-dealer, and if they charge additional fees to you or your clients to work with them.

LIMRA’s “2020 Insurance Barometer Study” indicated that 54% of Americans are covered by life insurance policies. And the Insured Retirement Institute’s 2017 study “The Language of Retirement” concluded that nearly half (48%) of American investors currently own or previously owned annuities.

Odds are many of your clients and prospects have been sold an annuity or insurance policy by someone (other than you) who probably doesn’t have an eye on their whole plan.

Step 2: discovery and review

Once you’ve selected an OID partner, work with their experts to identify clients who may benefit from particular advisory solutions. For example, your OID partners can help you:

  1. Locate lifetime income solutions with longevity and sequence of return risk protections for clients in their “fragile decade”, or
  2. Uncover the best multi-year guaranteed annuity (MYGA) rates for conservative investors, or
  3. Identify business owners in need of key-person insurance.

As you work through this discovery process, ask clients/prospects if they have annuities or insurance policies for review.

One of the key benefits of partnering with an OID is their expertise. As I said above, there’s a chance your clients have annuities and/or insurance policies you may not know about; an OID can review existing client policies to help determine if they are still serving their  needs, if costs may be lowered, if coverage may be dropped, if a simple change in agent of record can bring that account back into full view, and/or if the policies may be suitable for a 1035 exchange to fully-billable advisory solutions.

Step 3: apply and connect

Once specific client cases have been identified, licensed and registered experts at the OID can make client recommendations, explain the proposed course of action, handle paperwork, and manage suitability. This frees up your time and resources. Once the policy(s) fund, you may then be added to the contract as advisor of record, and data connections established to feed policy info into your portfolio management system.

By offering your clients annuity and insurance solutions, you can differentiate yourself from competitors, grow your AUM, and provide true holistic advice. And working with an OID can ensure compliance with RegBI and other regulations.

If you think an OID might be the right fit for your practice, book a meeting with our advisor solutions team to learn more.