Heard In The Hallways: NAIFA Convention 2013

Question: Do you practice on a commission-only basis, fee-only basis, or commission and fee basis? Why?

Answer: “I am a financial planner, and I do both. I offer products that pay commission or I charge a fee for my service. I chose this business model 15 years ago because of the direction the industry was going (towards more products that are designed to be sold without commission). Before that, I was a commissioned agent for 15 years. Today, I am an insurance agent and an insurance broker. In Oklahoma, you need a separate license to be a broker; that’s pertinent because having the broker’s license allows me to waive commission on certain products. So, I am an agent/broker with insurance and securities licenses. I give my clients a choice on my compensation; it’s either/or. Either way, I want them to know how I get paid. My firm is a registered insurance advisor.”

–Jim D. Duncan, financial advisor, Benchmark Financial Group, Oklahoma City

Answer: “I am currently commission-only because I am not licensed to do fees. However, I am looking into getting licensed to allow me to charge fees, because we service clients a lot after the point of sale.  Because of increased numbers of market corrections that we are seeing and the market volatility, clients need more monitoring of accounts and more advice than in previous years. I think they would be better served if they could pay me on a fee basis.”

–Tammie Myers Sharp, financial specialist, Wealth Strategies Group, Greenwood Village, Colo.

Answer: “I practice on a commission-only basis because I am a multi-line agent for State Farm and it’s the only way I can earn compensation for selling products. We are not financial planners, so we don’t charge a fee for planning. I have been with State Farm for33 years so never was fee-based. We get ‘compensated’ in other ways as well -- by the referrals our clients send us, by their loyalty, and by the joy we get from helping people when they need us. It is such a pleasure and joy to deliver a big life insurance check to someone who has lost a loved one, and to provide comfort and support to those who need help  if, say, they are hurt in an auto accident or have a family member in the hospital. You don’t know how good it feels until you’ve done that.”

–Rick Chimento III, agent, State Farm, Springfield, Ohio