Dual licensed advisors face big obstacle

by Will Ashworth13 Jul 2015
A lot of talk involving CRM2 revolves around fee disclosure and performance reporting for clients. Many have predicted that a significant number of dual-licensed advisors will simply give up their securities licenses focusing on insurance where the regulatory oversight won’t be as intense.

It’s called “regulatory arbitrage” and dual-licensed advisors are very aware that it’s taking place. But that’s not the biggest obstacle to an advisor’s productivity and success, says one Ontario-based sales trainer.

“If you go back in time, people were either insurance agents or they were stock brokers,” Helena Smeenk Pritchard told WP. “Well, now everybody is a ‘financial advisor’ and the insurance agents got mutual fund licensed and the stock brokers got their life insurance license.”

That created the dual-licensed advisor which Smeenk Pritchard estimates is easily more than 50 per cent of the advisor population in Canada.

“The investment advisor who got their life insurance license did so to be able to legally sell segregated funds so that they had a rounded out product offering and they could legally split commissions. They didn’t get it for any particular love of the product,” said Smeenk Pritchard. “And then the stock market tanked in 2000. They realized as they were hiding from their clients having lost 40% of their income that maybe they should have done more with their insurance license and as result people like myself [sales trainers] were able to get their attention.”

It’s not that simple for advisors to go from selling investment products to selling life insurance because the two processes involve completely different parts of the brain.

“There is the investment sale, or the money sale as it’s referred to, and the risk sale, or living benefits sale – one is a right-brain process and the other is a left-brain process,” said Helena Smeenk Pritchard. “The investment sale appeals to numbers, historical data and greed, from the advisor’s perspective it’s a quick payday. The insurance sale could take two or three meetings with the risk of no sale at the end of the third meeting or additional risk that the prospective client is uninsurable. So, now I have to go back and sell you again on why you should pay extra for this coverage.”

Forget CRM2. Selling skills is what prevents most dual-licensed advisors from truly being successful.


  • by mark m 2015-07-13 12:53:03 PM

    I think that it is more perception of who you are. It is difficult to be all things for all people. Most business comes from referrals and most people know people like themselves.
    A good insurance prospect is younger with lots of financial responsibilities and not that much in invested assets.
    A good investment prospect is older with more financial assets.
    You're either prospecting the children or the parents. You can get the "family" but you're the "guy" to son or dad.
    Therefore the client base for insurance and investments is largely mutually exclusive.
    Insurance is a more difficult sale, not because of the length of sales cycle, but having to die is a negative sales feature. Insurance is pessimistic because you have to face reality. Investments are optimistic because this time it will work!
    You're either one or the other.