Broker is incentivized to sell insurance products that are more costly to clients than other alternatives.
Broker is incentivized to sell products that have features that are not needed by the client.
Broker is incentivized to sell products that minimize client flexibility (penalties, taxes, restricted product offerings).
Questions Wealth Owners Should Ask to Surface Conflicts
What insurance companies do you represent and what percent of your compensation comes from each? Has this been constant over the last 5 years and do you anticipate it changing in the next 5 years? If so, why?
Do you receive compensation from other lines of insurance or from other investment products? If so, please list percentages from each.
Do you provide proprietary products designed exclusively for the affluent and not available to the general public? How are they different? Pricing (initial and ongoing)? Design Flexibility?
What criterion was used to steer your recommendation to this carrier and product?
What gives you confidence that this product is soundly priced and can live up to financial projections?
What can change about this product in the future and how would that impact its ongoing performance? By purchasing this product, what limitations apply to my ability to make future changes as my situation changes?
When using a variable universal life product, how do you determine asset allocation of the cash value and what criterion is used for selection of individual sub-account investment alternatives? How often is the portfolio reviewed? Does the product have automatic rebalancing? If so, how often is that done? If not, how is it done?
What specialized education/experience do you have that qualifies you to represent the affluent on insurance?
Given that most planning arrangements have long time horizons and may require decades of monitoring and adjustments to keep pace with insurance products and industry changes, tax law changes and personal changes (all of which will occur):
Describe your ongoing monitoring process.
Describe your staffing and team structure.
Describe your business succession plan.
What are the types of fees I am paying in this insurance