“Things change, but they never stay that way.” Isn’t that something the baseball king of misspeaking, Yogi Berra, said?
Either way, there’s a kind of ridiculous wisdom there that can be applied to almost any situation. Things do change - and then they change again.
Financial advisors know this truth well. Stocks go up and down. Interest rate fluctuations make what was formerly a great investment into just a so-so one. Clients’ life circumstances change – children graduate college, retirement looms, and the need for long-term care arises.
These are the reasons routine portfolio reviews are absolutely essential. Whether we do them for our own finances or for clients, we all know how important it is to regularly take a look at where our money is, how our money is performing, and what we can do to make it perform even better.
When undertaking these portfolio reviews, many financial advisors, no matter how knowledgeable they might be, tend to overlook one important potential strategy: a life settlement.
Whether this is due to a lack of familiarity with the process, misconceptions about the ethics of selling one’s life insurance to institutional investors, or simply not realizing it could be an option for a client, financial advisors can greatly benefit both their clients and themselves by giving this option a serious look.
Life settlements are regulated, just like other financial transactions.
A common misconception about the life settlement industry is that this financial arena is like the Wild West – ripe with unsavory characters hawking questionable snake-oil remedies.
In truth, the life settlement industry has grown into an increasingly regulated space, with regulations in place to protect clients’ privacy and protect against unlicensed brokers and providers.
Working through a licensed life settlement broker, like Ashar, adds yet another layer of safety and regulation to the process and ensures transparency and compliance. Ashar Group holds itself to rigorous compliance standards and we hold licenses in most U.S. states as well as Puerto Rico (you can learn more about the importance we place on compliance here).
In addition, going through a broker can yield much, much higher returns on a life settlement than you could get otherwise - sometimes as much as 800 percent higher.
Life settlements can generate liquidity that clients didn’t know they had.
Many people don’t realize life insurance is personal property, like real estate, and there are options other than continuing to pay high premiums or lapsing the policy.
When these options are no longer desirable - and, most importantly, when a life settlement makes sense for your client - selling the policy on the Secondary Market can mean giving your client more financial freedom. It can mean a chance to boost their retirement accounts or a way to pay for expensive long-term care.
And for you, the advisor, it can mean increasing your Assets Under Management and growing your reputation and business.
Consider this question: what if your client came to you for advice on how to dispose of a life insurance policy they no longer needed? If you told them to simply lapse the policy, and they later discovered they could have sold it on the Secondary Market for a much greater sum, how would it affect their trust in your knowledge and judgment?
Ashar’s experience and expertise can guide you through the process.
If you’re worried that you don’t have the knowledge or resources to recommend a life settlement to a client, Ashar can help. We specialize in working with premier financial advisors and offer the resources you need to help you learn about the process and get started in this space.
If you think a life settlement might be a good choice for one of your clients, you can start by taking our quick, seven-question Policy Value Quiz. This will help you determine whether your client’s policy might qualify for a life settlement. If it looks like the policy might be a good candidate, contact us! We’d love to help you help your clients.