It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
By Linda Koco
Amy Florian was having dinner one evening at the home of a financial advisor. During the course of conversation, the advisor mentioned that he didn’t always know what to say to clients who had just suffered the loss of a loved one. He felt awkward and wanted her to coach him.
She was working in the field so she agreed to help. This triggered a sequence of events that ultimately led to Florian creating a business that, among other things, helps insurance and financial services professionals know what to say and do when working with the bereaved.
“When delivering a life insurance check to a client, insurance agents often think about the money first,” said Florian, who is chief executive officer of Corgenius, a grief consulting and training firm and grief resource based in Hoffman Estates, Ill.
“Many agents don’t go to the funeral service at all, or if they do, they attend only briefly. From then on, it’s all business,” she said in an interview.
“It’s all business” means the agents bring the check, express condolences and then launch into discussing what will happen next and ways the survivor can invest or use the money.
“I hear that in grief support groups all the time,” Florian said. “Survivors say, ‘The agent doesn’t understand what I am going through,” or ‘The agent is trying to get me to buy something, like an annuity.’”
These complaints come from widowers as well as widows, she noted, but added that the U.S. Census Bureau says that there are five times as many widows as widowers. For that reason, she often speaks of the bereaved as widows.
Strive to understand
Her work with agents and advisors, which began at that dinner party several years ago, puts understanding the client at the forefront. When an advisor is contacting new widows and widowers, “understand” is what the advisor needs to do.
“Seventy percent of widows switch advisors after their husband’s death,” she noted, citing a commonly cited statistic in financial circles.
When asked why they make the change to someone else, “many wives, now widows, say the advisor didn’t build a relationship with them then, or when their husband was still alive,” Florian said.
To help the client, and to preserve the account, advisors need to establish and build relationships with survivors, she said. That means being “relationship centric, client centric and people centric.”
Here are a few of her suggestions for doing that:
· Find out about the person. Ask, “What about you? What are you doing for yourself? What’s on your bucket list?”
· Build a good relationship with the couple before a death occurs. Then, when the first death occurs, there is a foundation upon which to build.
· See things from the survivor’s perspective. “Some agents are so happy to bring the check, that they think the client should now feel better because they have some money,” Florian said. “But agents need to address the person’s grief first, not the money. They need to realize that many grieving people can’t think or make decisions for several weeks or months or even a year. They will be in the ‘fog of grief’ for a while.”
· Suggest putting the money in the checking account for now. Many life insurance companies make such an account available, so “go ahead and recommend using it,” she said. “Let the client know that ’you can leave it there while you put the pieces of your life back together again.’”
· Encourage the person not to make any big decisions for a while. That includes requests for monetary gifts, even from the children. “Encourage the person to wait until he or she can make the right decisions later on — decisions that will maintain the legacy of the loved one.”
· Remember that people who are in grief recover at their own pace. The average recovery period is five to eight months, but a lot of that is based on circumstances, she said.
· When it’s time to make financial decisions, ask about close loved ones. Ask the survivor if he or she would like these loved ones to be included in on the meetings.
Florian said she speaks from experience. She began her own grief journey 30 years ago as a young widow with a seven-month old son. As she learned more about death and grief, she began helping other survivors who were attending grief support groups offered at health care and faith-based organizations. That led to seminars, articles, lectures, additional education (she has a master’s degree and is a fellow in thanatology, or grief studies) and later her business. She has been working with agent and advisor groups since 2008.
It is true that the insurance business is becoming more relationship-centric than a decade ago, Florian allowed. That’s good, she said, because today, most people can go online to get all or most of the factual information that agents used to provide at time of a death, in pre-internet days.
What grieving widows and widowers want and need — and can’t get online — is access to person who understands what they are going through. “Those are the advisors who get the business,” she said, referring to financial investments made with policy proceeds and other assets.
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda may be reached at [email protected].
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