Are your clients’ most valuable possessions protected?
Bhupinder S. Anand, ACII, Dip PFS
To help clients understand what we can do for them as financial advisors, we guide them to identify their problems as well as to attempt to work out the solutions for themselves. If they can't get a satisfactory result, they will realize there’s a gap. That’s when we step in.
This is how the conversation might go: I ask a client, “What are your most valuable possessions?” After waiting for an answer, I usually hear about material things such as their home, investment funds or pension.
I then say the answer is actually, “Your life, your health, and a product of those two things — your ability to produce income. Would you agree that these are your most valuable possessions? Do you also agree it would make sense to financially protect your most valuable possessions in case they were lost or damaged?”
If they say “no,” then I have to decide if I want to continue the conversation with someone who feels their life and health aren’t valuable. More likely, though, they’ll say “yes.” Then I’ll have an opportunity to discuss how I can help them to do that.
My additional questions will then focus on getting them to describe the financial consequences of their death or disability and to quantify that loss by telling me what the source will be of their replacement funds. There usually aren’t enough funds to complete the need.
My final question then is, “How do you think the family will make up the shortfall?” There is only one answer left: “insurance.” And they are about to buy some from me right now!
Bhupinder Anand, of Gerrards Cross, England, has been an MDRT member since 1996 and is a Top of the Table qualifier.
This originally appeared in the MDRT Blog.