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Partnering with other advisors

Matt Pais

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Thomas specializes in handling insurance for fee-only RIAs.

HERE'S SOMETHING you don’t hear many MDRT members say: “It’s really important to make sure the advisor knows the client is their client, not my client.”

In fact, Kurt M. Thomas, CFP, CLU, is not a financial advisor himself. The three-year MDRT member from Cleveland, Ohio, describes himself as an insurance consultant, focusing his business on providing insurance solutions (including life, long-term care and disability insurance) for clients of fee-based investment advisors who cannot accept commissions.

“It’s a value-added service for the fee-only advisor to have a true insurance specialist as part of their team,” he said. “If not, they could lose their client, who might go to another financial planner who can offer insurance.”

These situations often occur when advisors are working with medical cases involving a history of heart attack, stroke or cancer. It can also occur with clients who have basic insurance needs or require a policy review. Or sometimes an advisor can provide insurance but does not specialize in it. For example, a property and casualty agent might work with business owners who have buy-sell or key person needs that exist outside of their core competencies.

It’s a value-added service for the fee-only advisor to have a true insurance specialist as part of their team.

Thomas, who works for the company his grandfather founded in 1971 (where his dad and uncle are now principals), said that this team approach hinges on several core elements, all of which establish trust:

Collaboration. After providing comprehensive financial planning to their client, the advisor will reach out to Thomas (usually via an email introduction, including the client as well) with the person’s insurance needs.

More often than not, Thomas merely has to execute the advisor’s recommendation, matching the insurance to the need and not introducing anything new. (This can be done electronically, over the phone or, most frequently, in person.)

He is never seen as competition because he doesn’t do any investment advice or financial planning, and the referring advisor determines if they want to sit in on meetings.

Communication. No matter what the interaction, Thomas always communicates what happened with the client to the advisor who referred him. So even if he merely left a voicemail about wanting to update a client on underwriting status, he’ll make sure to email the advisor about when he called and what he said.

“I want the advisor to be up to date on everything, so they know they can trust me,” he said. He does adjust how much he shares depending on the advisor’s expressed interests, though; some just say, “Kurt, take care of it.”

Referrals. Thomas will ask the advisors he works with if he can mention their names as a reference for the work he does. That way, if he reaches out to a new advisor, his existing partners can speak on his behalf.

Because of the small-town nature of the Cleveland area and the longevity of the agency, however, Thomas said many advisors already know about what he does, so initial calls are warmer than the standard cold call.

Networking. Thomas also expands his opportunities to connect through a number of industry professional groups. He is a trustee for the Cleveland-Akron Society of Financial Service Professionals and a member of the Financial Planning Association.

He was also recently accepted to the Risk Appraisal Forum, in which a selected group of general agents from around the U.S. meet twice annually with carrier underwriters and medical directors to talk about advancements in underwriting.

Transparency and follow-through. Thomas says his work does not involve a great deal of compliance issues, though he is happy to disclose his compensation to the client if the advisor asks him to.

He also offers policy reviews on an annual basis, often sending policy details to the advisor who will then review them with the client. Sometimes the client will call him directly to ask questions or change beneficiary information, but his ongoing role may be more behind the scenes moving forward.

Thomas recognized that this approach is not necessarily new. But while he said there is more than enough business to go around among the people who offer services like this, he knows the importance of being proactive to make connections.

After all, when he started working for the family business in 2012, his dad gave him a laminated card from his wallet, which his father had given to him. On it, the card contained only a simple reminder: If you want to sell life insurance, you have to actually go out and do it.

Contact: Kurt M. Thomas kurt@jlthomasco.com

 

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