Peter Kaplan believes that clients with $50 million or more in net worth need regular insurance and annuity checkups just as much as any other clients do.
Integrated Partners, an LPL Financial affiliate that advises on $15 billion in client assets, recently hired Kaplan to set up and run an insurance division, to ensure that planners regularly look at clients' insurance tonsils.
Too often, "planners avoid insurance because the process of implementing insurance is painful," Kaplan said in an email interview.
He said that prudent planners need to get over their fear and look into insurance files.
"Any planner unwilling to do so, in my opinion, is not exercising their fiduciary responsibilities," Kaplan said.
What it means: Clients with big money may have big planning and protection gaps.
Insurance review basics: Integrated Partners planners conduct general financial reviews for each client at least once a year that include insurance and annuity reviews.
The annual reviews focus on coverage adequacy checks.
Planners also conduct full insurance reviews every three to five years, or when a client's circumstances have changed.
Kaplan recommends that a full life, health and annuity review include:
- A look at the client's planning objectives.
- Assessments of coverage adequacy, performance and sustainability.
- Verification that each policy lists the right owner, payer and beneficiaries.
- Identification of cost-saving opportunities.
- Recommendations for changes in health or lifestyle that could improve clients' healthy life expectancy.
Holes: Clients with generational wealth often have great insurance arrangements — that's why they inherited their wealth.
When clients have moved into the ultra-high-net-worth category, "insurance implemented in the early stages of their wealth creation cycle is often incorrectly titled, insufficient in amount, or of the incorrect product type for their current wealth and needs," Kaplan said.
