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Needs-based selling
Strategies for tailoring insurance solutions to client needs.
It is your responsibility to provide disclosure to every client or prospect prior to the signing of an application.
Key areas of disclosure include:
Templates and documents to help you Implement Advisor Disclosure:
Key areas of disclosure include:
- Insurers you are contracted to represent,
- The nature of your relationship with the Insurer or any other business you may be involved with,
- How you are compensated and eligibility for additional compensation or volume perks,
- Potential conflicts of interest,
- The client's right to request additional information.
Templates and documents to help you Implement Advisor Disclosure:
- Advisor Disclosure – HUB Sample Template
- Corporate Disclosure Letter - Canada Life Sample Template
- Advisor Disclosure Letter - Canada Life Sample Template
- Advisor Engagement Letter - Canada Life Sample Template
- Advisor Engagement Agreement- Empire Sample Template
- Insurance Council of B.C. - Conflict of Interest Guideline Document
When collecting information from clients and prospects, you must be prepared to explain the purposes for which you are collecting this information. Client consent to an advisor’s collection and use of personal information is generally included within the Insurer application signed by the client. This provides authorization to the advisor for this single purpose and to this single Insurer. Where the advisor will retain ANY of this information collected in order to build a client file or to assist the client with future requirements, consent should be obtained from the client in writing at all times. It is a good business practice to provide information to a client or prospect about your own privacy practices. Sample wording is provided in HUBLINK that you can use on your business letterhead to assist you in preparing documentation. This information can be given to the client at an initial meeting.
Templates and documents to help you Client Consent:
HUB advisors are required to ensure that their recommended product or service are appropriate to the needs of the client as determined by a needs-based assessment done by the advisor and/or as identified by the client.
To assist you in meeting your obligation to needs-based selling, please see the reference documents and tools found below. By following the principles outlined in these documents, you can show that your sales practices are consistent with the regulators' requirement that your recommendations fit your clients' needs.
Templates and documents to help you with client suitability:
To assist you in meeting your obligation to needs-based selling, please see the reference documents and tools found below. By following the principles outlined in these documents, you can show that your sales practices are consistent with the regulators' requirement that your recommendations fit your clients' needs.
Templates and documents to help you with client suitability:
A replacement must always be in the best interest of the client. The Broker must follow provincial regulations for the replacement of a life insurance contract in the appropriate jurisdiction, including but not limited to the following:
Templates and documents to help with Policy Replacement
- The Broker should document why changes to the existing policy could not meet the policy owner needs
- The Broker must document the intention to replace a contract. Usually this is done via the new application.
- Complete replacement form fully and accurately
- Explain the contents of the form to the client
- Have the replacement form countersigned where required
Templates and documents to help with Policy Replacement
Summarize your advice with a “Reason Why” letter: This document includes a recommendation that advisors provide their clients with a “reason why” letter following a sale. The letter is a brief understandable summary of the client’s stated wishes, the advice provided to the client by the advisor, and the reason why the product meets the client’s needs. The intent of sending a “reason why” letter is to support sales suitability, promote increased financial literacy, and help to confirm that an advisor is acting in the interests of a client.
The letter should be provided to clients no later than the time of policy delivery. They can be sent by email or delivered in hardcopy format. The reason why letter helps protect you and your business; it builds trust with your clients and is an important aspect of sales suitability documentation. Resources are available to help guide you in writing these letters.
To learn more, read The Approach-Serving the Client through Needs-Based Sales Practices.The letter should be provided to clients no later than the time of policy delivery. They can be sent by email or delivered in hardcopy format. The reason why letter helps protect you and your business; it builds trust with your clients and is an important aspect of sales suitability documentation. Resources are available to help guide you in writing these letters.
Templates and document to help you
All Brokers should maintain sufficient information in Client Files to demonstrate the appropriateness of any sale or any advice given. It is extremely important that you retain all material information that was utilized in the sales process as well as the maintenance or servicing of a policy/contract. Accurate and secure records will help to:
- Demonstrate that you fulfilled your duty of care,
- Avoid any possible breach of client’s privacy and confidentiality,
- Defend against allegations of misconduct,
- Provide ongoing service to clients,
- Add value to your business and your relationship with the client.
- between individuals who have a personal or family relationship
- if a Broker receives a referral about a potential new client, from someone who has an existing relationship with both Broker and prospect, the Broker can send one introductory message to that prospect
- where there is an “active” existing business relationship. “Active” is defined as within a 2 year period from purchase or within a 6 month period since last service provided.
- where the recipient visibly publishes their electronic address without stating it does not welcome CEMs
- where you are handed the persons business card containing their electronic address
- Consent to collect and retain personal information,
- Know your client worksheets,
- Personal and any product specific disclosure documents,
- Evidence of needs analysis
- Copies of illustrations (signed by client where appropriate)
- Notes of client meetings
Needs analysis tools and resources
Click here for a printable Financial and Estate Planning Checklist
Click here to learn about RazorPlan financial planning software