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LIFE Pol with icy price a tag

No fee-based practice.



Yes fee-based practice.

Expertise/Knowledge Size Of Accounts

Complexity e model h t e s U " of Financial that fits clients' Situations needs"

My Big Debate With Fees One agent describes the thought process involved while considering a break from her agency’s nearly half-century of commission-only tradition. By Juli McNeely


n struggling with a decision of whether to begin the process of exploring a fee-based practice, we had to start with the knowledge that serving our clients is our top priority – but we had to ask ourselves which business model does that best. Our agency was founded 45 years ago by my father, who recently retired. We have always operated in the independent channel and have been solely a commission-based firm. We have traditionally served “Main Street” clients who could be classified as middle income with varying amounts of assets. So, would changing our business model potentially threaten our ability to serve the very clients who helped us become who we are today? If you asked my father that ques-


tion, his answer would be emphatically, “Yes – don’t even consider it!” Change is not something any of us handle well, especially after 45 years of operating in a specific way. Commission-based selling has been how we have built our firm. It is what we know. It is what our clients know. In my 16 years in the financial services industry, one of the most significant things I’ve come to realize is that we all must continue to learn and adapt to the changing industry. Sometimes that means changing how we do things. At the very least, it means considering adjustments from time to time. The option to shift to a fee-based practice has been an internal debate of mine for a couple years. Recently, I began to explore the pros and cons more outwardly. Here are the highlights of my debate: Size Of Accounts: We service many smaller accounts and we realize that every potential investor must start somewhere. We have clients who invest $50100/month and we believe that these accounts are our “bread and butter.”

InsuranceNewsNet Magazine » January 2013

These accounts are not likely to be a good fit for a fee-based option – at least until they grow. However, they are not accounts we are willing to turn away, because we believe these clients need our advice the most. So I asked myself: Do we have any accounts that have grown in size over the years and might be a good fit for a fee-based environment? Complexity of Financial Situations: Many of our clients find themselves in more complex financial situations. Although we live in an “Information Era” and consumers can often research their options online, they continue to reach out to us for advice and guidance. They want someone to be their trusted advisor and financial consultant. They are not comfortable going it alone and sometimes are simply looking for someone to help assure them that they are on track. So I asked myself: Do we have clients who come to us often to get our assistance in navigating their complex financial situation (personal or business) and often simply want our advice?

January 2013  

Today's hostile environment of low interest rates, high market volatility and continuing regulatory pressure requires products with the flex...

January 2013  

Today's hostile environment of low interest rates, high market volatility and continuing regulatory pressure requires products with the flex...