As what appears to be another economically uncertain year dawns, it's time for affluent Americans to take stock of their financial assets and potential liabilities. As always, an annual review of personal insurance coverage is critical to preserving wealth.
Moreover, an annual review may not have actually taken place for several years. As such, it is in the best interest of your affluent clients to commit to one of the least painful of all New Year's resolutions–to sit with their risk advisor and assess their insurance coverage.
Getting your clients to fully embrace the annual review process can present a challenge. At best, some clients (and their agents) may consider the annual review a perfunctory chore. At worst, they may dismiss it entirely. In this scenario, insurance renewal policies are issued automatically without any thought to the current risks faced by your client.
Other clients may be forced to endure the hard-selling agent or broker who pushes new coverage options without considering the client's individual risk exposures at all. There are further dangers–the agent who impulsively cuts coverage (possibly at the behest of clients), leaving them without the minimum necessary protection in case of disaster. While everyone wants to reduce their annual premium, doing so should not be to the detriment of the client's interests.
Each of these scenarios represents a direct threat to wealth preservation. How does a wealth manager respond? Clients should be reminded that a comprehensive annual review deserves serious consideration. If necessary, a wealth manager can partner with the independent agent or broker that specializes in the needs of high-net-worth consumers to ensure that the review is not simply a matter of signing papers. If the current agent is unresponsive to the client's individual risk profile or is unqualified to assess their exposures or unwilling to communicate the dangers of being underinsured, it may be best for the wealth manager to recommend another insurance professional.
An annual review formulates a plan that serves to further preserve the lifestyle that may have taken your client years to attain. Consider that the insurance agent or broker is, in some ways, like a personal physician–he or she must conduct a thorough annual check-up on patients to assess their emerging financial health risks.
