The financial planner plays an important role in making sure that a client’s portfolio is meeting the client’s objectives and is suitable for the client. Suitability should be having both an appropriate product against peer groups and an appropriate product type that closely corresponds to client objectives.

The financial planner in the case study below while not the agent of record for the life insurance products, knows that he first has to take a measurement of what the client has inforce before he can have a conversation with the client to find out where the client needs to be.

So when the Veralytic Reports both came back at 4 ½ stars out of 5 that’s good, right? The answer should be that the policies appear to be good policies in relation to their peer group, but that is only half the story. The financial planner in this study uses the Veralytic Reports to go back to his client and review the 5 stars of suitability on the executive summary of the Veralytic Reports and finds that the client was sold life insurance policies off of hypothetical illustrations when it was popular to sell these products and not necessarily popular to buy. These policies are underfunded mostly because of the time in which the client started funded them and the hypothetical illustrations had assumptions that were allowed at the time but we now know to be unreasonable.

Case Study¹

• Client had $1M of Current Assumption Survivorship Universal Life issued in early 1990s when UL products were a favorite product of choice & $1M of Survivorship Indexed Universal Life insurance.
• In reviewing the executive summary of the Veralytic Report of the two policies with the client (now in their 70s), the financial planner discovered that the client investment temperament had changed. Client wanted more guarantees and no market fluctuations.
• Financial Planner asked for Veralytic’s help with finding suitable products.
• Such independent research revealed that a new product with the suitable product type that provided the same benefit with the same premium requirement but now included guarantees for the lifetime of the insureds and removed market fluctuations from their portfolio. 

In this case study the Veralytic Reports support the Financial Planner matching empirical characteristics of product that is unique to the circumstances of the client. This case study shows how an advisor must continually measure and monitor a client’s portfolio to make sure that the products remain suitable and that if objectives or temperament changes that the adjustments are made to keep within the suitable parameters.

Clients hire you for your experience and knowledge in areas they do not have and know and expect you to take care of them and do what is in their best interest. Yet few know what they are being charged for cost of insurance charges (COIs), fixed administration expenses (FAEs), cash value-based “wrap fees” (e.g., M&Es) and premium loads. These costs inside your clients’ life insurance policies vary by as much as 80% and if neither you nor they know what they are being charged, then they may be over-charged.

Veralytic can help you show your clients that you are taking care of them in ways that even most insurance agents or brokers cannot. Veralytic is the only patented, objective and rules-based research tool that goes beyond the overly-simplistic comparisons of illustrations of hypothetical policy values that can be considered “misleading” and “inappropriate” by both financial and insurance industry authorities. Veralytic’s independent research reports provide a facts-based solution that is both compliant with industry regulations and established case law.

Similar to accountants subscribing to information services like BNA (Bureau of National Affairs), CCH, Inc, and Thomson Reuters/RIA so they can look-up relevant tax authority to properly advise their clients. Also why attorneys subscribe to information services like Lexis/Nexus, Martindale and Westlaw so they can look-up relevant case law to properly represent their clients. And this is why investment advisors subscribe to information services like Lipper, Morningstar, and ValueLine so they can research those investments that are well-priced, performing well and most suitable to the needs of their clients.

For example, if an attorney were not to subscribe to the information services necessary to know relevant case law authority to properly represent their clients, the client could face legal action and the attorney could lose the client or worse face accusations of malpractice or breach of fiduciary duty.  And if a trustee were not to subscribe to the information services necessary to properly document the exercise of their fiduciary duty to investigate suitability, the trust beneficiaries could receive less than they otherwise “should” have and the trustee could face legal action seeking the difference between what the beneficiaries actually received versus what they “should” have received (as was the case in Cochran).  

As such, if you are a CPA, tax attorney or trust officer, using Veralytic research can demonstrate to your clients that you are taking care of them.  If you are an independent life insurance broker, using Veralytic can BOTH demonstrate that you are genuinely interested in serving the best-interest of the client AND can help eliminate competition in advance with greater market intelligence. 

Veralytic is simply the fastest, easiest, and most comprehensive and cost-effective way to independently verify to clients and their advisors whether or not the pricing and performance of existing or proposed life insurance is in their best interest.  Only Veralytic is accepted for independent client representation, endorsed by the New York Bankers Association (NYBA) and compliant with industry regulations and established case law.

Use the Veralytic Reports to determine the appropriateness of pricing, the reasonableness of performance expectations for invested assets underlying policy cash values, and overall suitability for your (client’s) policies based on the 5 factors of suitability.  Click here and get up to 3 Veralytic research reports under our NO-Risk trial subscription.

¹This case study is based on an actual client situation but is meant for informational purposes only. The case study is in no way intended to be used as a primary basis for insurance or investment decisions. Similar results are not guaranteed and will vary based the individual client situations. Clients should consult with their own financial, tax, legal, and accounting advisors before implementing any insurance or investment plan. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security or investment product. Guarantees are subject to the claims paying ability of the insurance company.