Life Insurance and annuity commissions banned in the UK and other countries starting next year
By Lew Nason
Insurance Pro Shop
By making the transition now from a salesperson to a financial services provider, you can double and triple you income now.
Two years ago, Ed Morrow wrote an article titled Would you like to work for free? In the article, he stated, "The Financial Services Authority (FSA) [in Britian] is to ban financial advisors from receiving commission for selling investment policies from 2012. The change will change radically the sale of financial policies." He went on to explain why. Well, it's happening, and it's not only in Britain. It may happen in the United States!
Are you prepared?
With the recent changes in Britain, Australia and other countries that will begin banning commissions on investments and cash value insurance products starting in 2013, I have been getting emails and calls from agents and advisors in those countries asking what they can do. How can they quickly make the transition from commissioned based product sales to fee-based planning? The problem is that for those agents who have been primarily product-driven, the transition to be financial services-driven will take some time. And most of those agents and advisors probably won’t survive the transition, because it's a complete change in marketing and sales philosophy, requiring additional training in marketing and sales, along with learning the fundamentals of financial planning. None of this can be learned overnight.
We don’t know if or when commissions on cash value insurance products will be banned in the United States; however, I encourage everyone to start positioning themselves for that eventuality.
If and when commissions are banned, it will be mandatory that you are already trained on the basics of financial planning and have positioned yourself as a trusted financial advisor in your local community. You will no longer be earning a commission from selling your cash value insurance and investment products. The only income you'll receive will be from collecting a fee for your financial services.
Accordingly, you need to get training in the basics of financial planning right now. You need to learn how to help people get out of debt, reduce their income taxes, fund a college education for their children, save for a tax free retirement and transfer their wealth. Then you'll want to constantly deliver your message about how you are helping people to your clients, friends, family, neighbors and prospects. You'll want to send them a monthly newsletter, offer them free reports, invite them to educational workshops, write articles for local newspapers, have a strong presence on the social media platforms and more.You'll want to let people know about the financial services you provide, not the products you sell.
Your message needs to be about how you are truly helping middle income families to spend, save, invest, insure and plan wisely for the future in order to achieve financial independence. This will help you the transition to becoming the most recognized, trusted, respected and sought after financial services professional in your local community.
Consider, if and when commissions are banned in the U.S., you will be in the same position as a lawyer, accountant, doctor and every other professional that only gets paid based on the services they render.
There is a definite up-side to making this transition now. Those agents and advisors who are truly focused on helping people are the current sales leaders in our industry. By making the transition now from a salesperson to a financial services provider, you can double and triple you income now. And, you'll be in position to go fee-based if and when that time comes.