New Certification For Life Insurance Agents Reflects Changing Needs

By Cyril Tuohy

InsuranceNewsNet

You’ve had a great run, Life Underwriter Training Council Fellow (LUTCF). Now step aside, there’s a new designation in town: the Financial Services Certified Professional (FSCP).

The demise of the long-standing LUTCF designation for the broader FSCP designation reflects not only lower demand for the LUTCF but a shift in the broadening of what life insurance agents and advisors sell in today’s marketplace, said Dr. Larry Barton, president of The American College of Financial Services.

Barton said that agents’ and advisors’ work now extends far beyond selling life insurance. The Bryn Mawr, Pa.-based American College announced the FSCP designation last month.

“The single biggest challenge with the LUTCF we faced was an enrollment decline in the past five years, and we did lots of soul-searching and feedback and the ‘LU’ piece was not well understood and causing a mixed reaction in the marketplace,” Barton, said in an interview with InsuranceNewsNet.

Response to the FSCP, which has been targeted at independent advisors, wealth managers, insurance specialists, registered representatives and other financial professionals, has been “overwhelming,” Barton also said.

The life insurance-sponsored American College confers both designations and is responsible for training generations of underwriters and distributors. It issues the LUTCF designation in conjunction with the National Association of Insurance and Financial Advisors (NAIFA).

Barton said that the organization “didn’t expect the overwhelming response because many people had been told over the years to become LUTCFs.”  But he said that the FSCP is better suited to a world with multiple product lines sold through channels: the telephone, the Internet and even social media. The LUTCF had become outdated, Barton said. “It (LUTCF) looked like your grandfather’s program and was not considered to be cutting edge,” he said.

The FSCP, whose formal launch date is Jan. 1, 2014, will include much of what was required of the LUTCF, but with more content demanded by the latest generations of agents.

A major component of the FSCP will be an ethics module, Barton said. Ethical considerations faced by new agents will become more complicated as the cognitive abilities of 78 million aging baby boomers decline.

For instance, take a 78-year-old prospect with early stage Alzheimer’s disease. Should an agent sell a product suitable to a prospect whose comprehension is clouded by this debilitating disease?

What if a client’s impaired judgment leads him or her to buy $3 million worth of coverage when all they need is $300,000, and what if that commission-based advisor’s incentive is to sell the client $3 million worth of coverage?

Agents are supposed to ensure that potential clients understand the products that they may purchase. In cases of impaired comprehension, agents may want to raise the matter with a spouse, the client’s adult children or even the client’s doctor.

These kinds of ethical questions weren’t as commonplace when the LUTCF designation was first issued in 1984.

FSCP holders will have to satisfy the ethics-related continuing education (CE) requirement every two years to continue using the FSCP designation. FSCP courses will also address social media use, health care reform and financial planning in specific situations like divorce, according to The American College.

The FSCP is designed to be a rigorous program that covers the holistic, comprehensive long-term needs of clients rather than focusing more narrowly on “selling product,” The American College said .

Barton said the cost to the advisor of obtaining the FSCP designation is about $290 per course, about the same as the LUTCF. A total of 10 courses must be completed to obtain the FSCP designation. The first FSCPs will be granted next year.

Those who already hold the LUTCF designation will need to take a “completer” program to earn their FSCP, or they may continue to use their LUTCF credential.  Students taking LUTCF courses now can earn credits toward the FSCP before formally enrolling in the FSCP program beginning Jan. 1, or they may complete the LUTCF under the current rules.

No new students will be accepted for LUTCF training after Jan. 1, 2014. Students enrolled before Dec. 31, will have to earn their LUTCF within 18 months after which time The American College will cease to issue the certification.

Current LUTCF designees – there are approximately 68,000 of them -- are welcome to use the letters after their name for as long as they want. Advisors, however, must choose between using either the LUTCF designation or the FSCP designation. They cannot use both, The American College said.

Agents and financial advisors covet professional designations because they allow designees to differentiate themselves from their peers. That’s an advantage that often translates into more sales.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].