Insurable Interest Canadian Insurance Blog

What You Need to Know Robert Merton said retirement security is a function of income, not assets. In the new Retirement Security Rule, the Labor Department avoids mentioning retirement income. The author believes the wording reflects how department officials think. When the Labor Department wrote the document it used to describe its new Retirement Security Rule, department officials embraced the worldview of registered securities sales representatives and other investment advisors. Not the worldview of insurance agents, and certainly not the worldview of retirement income distribution planners. Investment advisors, insurance agents and income planners differ markedly in terms of perspectives, philosophies, product preferences, licensure, methodologies and priorities. In many ways, their worldviews are as incompatible as freshwater fish and saltwater fish. Nothing in the new DOL rule will support financial professional diversity in any meaningful sense. What’s Missing The DOL analysis of the new rule is 153,943 words long. That’s equal to the total word count of two average novels. But something important is missing: Not once in this mighty text do DOL officials use the two-word term “retirement income,” outside of references to the Employee Retirement Income Security Act, one direct quote from a Labor Department advisory opinion, and references...

What You Need to Know Most clients are in a hurry. Selling a life insurance policy can take months. The author says the firms in the life settlement sector can do better. In the early 1990s, as the life settlement industry was just beginning to emerge, United Parcel Service introduced its iconic slogan, “Moving at the Speed of Business.” This phrase, though initially aimed at securing more commercial shipping work, inadvertently captured the essence of the business landscape at the time — an environment where speed was becoming increasingly critical. Fast forward to today, and the urgency for businesses to operate swiftly has only intensified. However, it appears that a segment of the financial services sector, notably the life insurance settlement industry, has lagged, operating more at “the speed of molasses” than at the pace of contemporary business. The Need for Speed and Efficiency In today’s fast-paced world, businesses across various sectors have adapted to meet the demands for speed and efficiency. From instant online quotes for health, life and commercial insurance to the rapid responses expected in sectors like banking and automobile sales, speed and efficiency have become the benchmarks. Yet, the life insurance settlement industry, now roughly 35...

Fichtner said the political impasse is leading Americans towards an automatic across-the-board benefit cuts of over 20% when the Old-Age and Survivors Insurance trust fund runs dry. “Only pragmatic, bipartisan policymaking can prevent these cuts,” Fichtner said. Nancy Altman, president of Social Security Works, echoed that warning in her own written statement, though she highlighted some bright points in the new projection. “Due to robust job growth, low unemployment and rising wages, more people than ever are contributing to Social Security and earning its needed protections,” Altman said. “As a result, Social Security can pay all promised benefits until 2035, one year longer than projected in last year’s report, and 83% of benefits thereafter, also an improvement over last year — even if Congress takes no action whatsoever.” Other data in the new report shows the asset reserves of the combined trust funds declined by $41 billion in 2023 to a total of $2.788 trillion. The total annual cost of the program is projected to exceed total annual income in 2024 and remain higher throughout the 75-year projection period. Total costs began to be higher than total income in 2021, while Social Security’s cost has exceeded its non-interest income since 2010. Image: Adobe Stock

Data published early this year by Cerulli Associates shows “complex” and concierge-style services that cater to specific client needs are becoming increasingly important for advisors seeking to compete for ultra-high-net-worth clients. Access to such services outweighs personal relationship factors when it comes to bringing clients on board, according to Cerulli’s study. At the same time, 35% of high-net-worth individuals polled said they had begun a relationship with their primary advisory provider because of either the services or the client experience on offer, up from 28% who said this in 2017. Valerie Wong Fountain, head of family office resources partner and platform management at Morgan Stanley, told ThinkAdvisor in a recent interview that these findings match closely with her recent experience on the job. In fact, Wong Fountain’s role includes leading the firm’s division dedicated to this need, Signature Access Lifestyle Advisory, and she argued that the strategic importance of her team’s work for Morgan Stanley’s overall success in the UHNW space shouldn’t be underestimated. Wong Fountain described Signature Access as a bridge between Morgan Stanley’s financial planning services and a well-connected network of professionals and third-party service providers who specialize in the distinct needs of this client base. These range from support with...