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Customer Service Done Right: From a Live Person

Almost everybody has had one of those customer service moments where you called to get a problem solved, and by the end of the call, you felt rage so deep that you want to scream.  It is frustrating to have a problem that boils over because of lack of communication between you and customer service.

In life insurance, the primary reasons I have found that causes problems are the line of information and control.  When a person calls for information or goes online, how they are served depends upon the distribution method used.  When you respond to a life insurance advertisement, a company can handle your request as a marketing company, a direct distributor or an independent agent.

To explain the line of information and control and show how it can break down, lets briefly look at the three distribution methods for life insurance.

The first channel of distribution is through marketing companies.  You may see life insurance advertised online or television. In many instances, if a potential customer calls an 800 number or goes online, their contact information is collected, and sold to multiple insurance agents.  For those insurance agents, it is a rush to call the customer and continue to call them until they buy insurance or are told not to call back.

The second type of distribution channel is if a customer is contacting a large life insurance company that is selling only its products.  If the product fits, this can be a quick process however the line of customer control is limited.  If you are the customer and have further questions or a problem crops up, all you have is an 800 number or email.  In a general business survey done by NewVoiceMedia almost 32% of call in customers had to talk to more than one customer service agent during their call.  Moreover, 21% of the customers had to repeat their story to the next agent.[1]  You probably have the feelings of similar calls you have experienced where you must repeat your problem repeatedly to the next agent.

The third type of life insurance buying experience is when you call or go online for information, and you contact the same person that you talk to every time.  If you have a problem, you talk to the same person that you initially contacted.  That level of customer service is available in the independent agent system.

My company, Advice4LifeInsurance.com is an independent agent.  When you request information online, it is not sold to multiple agents.  You are contacted by one agent from beginning to end.  The one contact approach is not anti-technology, to the contrary.  Technology makes the independent agent system streamlined.  Most life insurance policies are done electronically.  Communication is done by text, LinkedIn Inmail, Facebook Messenger, email or live by phone.  Technology makes it easier for the independent agent to be able to give insurance clients a concierge level of service.

In a survey done by the non-profit organization Life Happens and insurance industry researcher LIMRA, the number one thing that life insurance customers ask for is easy to understand information.  The second thing wanted by 66% of respondents was the ability to talk to a real person. [2]

All three of the insurance channels mentioned do get to the point of talking to a real person. However, what I have found that keeps the level of customer problems to a minimum is limiting the line of information and control.  The person you begin with is the person that you stay with through the entire application process and in future years when questions or problems arise.

Resources 

[1] Hyken, Shep. “Is Your Customer Support Killing Your Business?” Forbes. Last modified January 16, 2018. https://www.forbes.com/sites/shephyken/2018/01/14/is-your-customer-support-killing-your-business/#308056447913.

[2] Life Happens, and LIMRA. 2017 Insurance Barometer Study. LL Global, Inc., 2017.

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Good Financial Advice

When was the last time that you asked for a second opinion on your finances?  Money is one of those subjects that is hard to bring up in conversations.  If you talk about money with friends it may open your life more than you want or more than your friends, want to know.  The hesitation to discuss money also brings up the problem of trust. Just where does a non-financial person go for financial advice that can be trusted?  Here is the short answer:

Employee benefits education at work

CPA’s and attorneys

Fee-based financial planners

Stockbrokers

Investment product providers

Life insurance companies

Life insurance agents

Credit union

Banks

Robo-advisers

The internet

What are the pros and cons of the various sources of information? Here is some brief insight into the different sources of financial advice.  This is not meant to be the end-all of financial information sources, but rather enough information to point you in the right direction.

Employee benefit education is a major source for many people, and its reliability is getting a big boost.  In April of 2017, new laws go into effect mandating that all employer retirement plan information be in the best interest of the employee (Department of Labor, 2016).  That does not mean that all employee benefit information will be equally informative.  It also does not mean that employers are entirely responsible for employees’ financial lives.  It does mean that the financial advice concerning the retirement plan should be dependable.  How you relate that information to other aspects of your finances is up to you.

Stockbrokers have changed over the past fifty years.  Stockbrokers used to be just what their name implied, someone that bought and sold stock.  They did not offer much unbiased advice because they usually worked for an investment banker that was organizing the sale of a company’s stock.  As time has progressed, stockbrokers have become less sales-oriented and more concerned about if they are offering financial products that are in the best interest of their clients.

Investment product providers are mutual funds purchase directly from the provider or a unit investment trust sometimes shortened to UIT’s.  There are some providers that offer good advice, but remember that they still do not have a high responsibility to sell the products that are best for you.  They have certain regulations that they have to follow. For example, they are not supposed to say things that are blatant lies.  Moreover, they are not supposed to sell their products to people that they find are financially unqualified.  However, your overall best interest is not their legal duty.  To some degree, it is still buyer beware.

Life insurance companies have some similarities.  Like the investment product providers, they are not supposed to stretch the truth.  However, the average person is far from qualified to understand some of their products, making the need for an experienced agent more important.

Life insurance agents are separate from the life insurance companies in this information because there are many life insurance agents that are independent.  The autonomy of an independent agent does give their financial advice less likelihood of being biased. However most financial advice from life insurance agents will be compartmentalized to deal only with the financial aspects related to their products.

Credit unions remain a good source for financial products and information.  They sell credit union and life insurance products.   Nevertheless, just like any product provider, it is up to the customer to be sure that they are buying a product that they understand and can afford.

For a long time, banks were perceived as the gold standard of safety.  Recently that image has fallen because one big bank let its branches get out of control and cost its customers millions of dollars.  It gives the impression to the average person that they cannot trust banks any longer. Time will tell how that circumstance gets resolved and if their image will improve.

Fee-based financial planners are perceived as one of the most unbiased parties when dealing with money.  They do not sell products so their primary incentive is client fees.

CPA’s and attorneys are listed together.  However, it has been my experience that many more CPA’s deals with financial issues than attorney’s.  If you are looking for financial advice, a CPA or attorney will be very straight forward in telling you if they will or will not be able to help you. Some of these professionals have expanded their practice to include fee-based financial advice.  Because of their level of fiduciary duty, I would not have any reservations in stating that if a CPA or attorney provides financial advice as part of their service, it is dependable.

Robo-advisors have become a new option available for financial advice, and some are trustworthy sources of financial information.  The creators of robo-advisor services have taken the modern theories that are used to manage investments and put them into a computer program.  Plug in the parameters of your financial situation and the program will produce what is considered to be an appropriate investment allocation.  As the economy changes or personal financial circumstances change the program can alert customers of changes automatically or prompt customers to manually make changes.  Do robo-advisors work?  The reliability of robo-advisors is as good as the creator, person, or team that is managing the program.  Just as in the quality of investment advice that you obtain from real people depends upon the individual you are entrusting.  According to a study done by pollster Gallup, only 5% of U.S. investors use robo-advisors and an astounding 80% state that “they are not likely at all to use a robo-advisor” (Gallup, Inc.,2016).

flashing-red-lightIf I could post a big flashing red warning light on the page, this would be the place to put it.  The internet is an option that most people will turn to for financial advice however we should all be wary of internet financial advice because of the prevalence of scams.  It takes no financial experience, education or certification to start a website.  That is reason enough to be cautious. You may have found this article by surfing the internet for financial advice.  How do you know you can trust it or me?  The fact is you do not.  Ask yourself, does the source sound rational and can you research the advice?

When judging the quality or usefulness of any financial advice there is a reliable standard.  If a circumstance sounds too good to be true, it probably is.  People get caught up in scams because they find an answer to a problem or concern that they have and the solution they find seems to fit just right.  We all have some degrees of trust in us.  We could not live daily without some trust.  We believe a total stranger when we ask them the time of day.  Trust gets a little more away from personal control when we ask for information that will impact part of our life.  The education system teaches students to trust one another in projects.  Everyone’s grade in a group project depends on each other.  We trust colleagues at work when we share responsibilities.  However, even in these examples, you can see there is room for lapses in confidence.  As we broaden the circle of trust to encompass other aspects of our lives such as finance, reasons to mistrust widens.  There are people in our world that are putting their personal interest ahead of your best interest.  The cold hard fact is that there are people in our world that set out to deceive others.  How can you be sure that you are not getting advice for your money from a con-artist?

In her book, The Confidence Game, Maria Konnikova tells the fascinating story of Dr. Joseph Cyr, a surgeon in the Royal Canadian Navy (Konnikova, 2016).  Dr. Cyr was outstanding, he did surgery in the toughest conditions at sea, with little or no help.  The only problem was the Dr. Cyr was not a doctor at all.  He was Ferdinand Waldo Demar, a young man that had not even graduated from high school.  Konnikova’s captivating book looks at the reason why people fall for things that are not real.  She describes the people that commit these charades like this, “Their genius lies in figuring out what, precisely, it is we want, and how they can present themselves as the perfect vehicle for delivering on that desire” (Konnikova, 2016).  The thing we can learn from Konnikova’s insight is that when we are looking to find financial advice, be careful that the solution has not been created to prey on our needs.  If it is too good to be true, it probably is not true at all.

How do you make sure that you are getting sound financial advice?  Over the years I have worked for large firms and even though the firms had billions and billions of dollars under management clients did not rely as much upon the credibility of the institution as much as they did with the person that was in front of them.  Investment firms know this and try desperately to tie their employees to their company.  For the average everyday person or the CEO of the multi-billion-dollar corporation, knowing if you can trust the financial advice of your advisor boils down to work experience, life experiences, references, education, and last but not least common sense.

As people begin their careers, education is paramount.  As the years go by the value of classroom teaching is replaced with the work experiences encountered. Do not take me wrong, education is valuable, especially financial education.  My point is that life experiences have a significant impact on a person’s abilities.  If you are presented with financial recommendations, don’t be shy about asking for references of the advisor’s work.  Don’t be put off if there are not a lot of Yelp, Google or Angie’s List reviews. How some financial advisors interact online is regulated either by the government or their self-regulatory organizations making online research more difficult. If the circumstance warrants, ask for a referral.  Understand this too.  If you are asking for advice on a $35 per month life insurance policy, you probably are not going to get the phone numbers of the advisor’s top ten clients.  Samples of the advisor’s work can also serve as a good standard for trust.  I have mentioned it a several times, and it is worth saying again, the common sense factor is crucial.  If the service or results of services sound too good to be true they probably are not real.  Follow these guidelines, and it will help you in finding good financial advice.

References

Department of Labor. (2016). Conflict of interest rule—retirement investment advice (Volume 81, Number 68). Retrieved from National Archives and Records Administration website: http://webapps.dol.gov/FederalRegister/PdfDisplay.aspx?DocId=28806

Gallup, Inc. (2016). Robo-advice still a novelty for U.S. investors. Retrieved from Gallup Poll website: http://www.gallup.com/poll/193997/robo-advice-novelty-investors.aspx

Konnikova, M. (2016). The confidence game: why we fall for it … every time. New York, NY: Penguin Random House.

 

Van Richards is the owner of Advice4LifeInsurance.com and Advice4Retirement.com he can be contacted at van@advice4lifeinsurance.com or on twitter @VanRichards

Could you afford a $400 unexpected expense?

Every year the United States Federal Reserve Board conducts a survey to gauge the public’s financial health. “a number of adults still indicate that they are experiencing financial challenges” (BOG, 2016). Here is a highlight of the problems faced by many:

47% could not cover an emergency expense costing $400.
31% put off medical care because they could not afford it.
20% spend more than they make
37% do not save money
32% cannot qualify for a credit card
44% that have a credit card carry a balance
20% have no bank account
23% have student loans
31% have no retirement savings or pension

I have a solution. I would like to give you a financial tool to get started solving your money problems. When you request the financial tool you will also receive regular information to help you better control your finances. Sign up for your free financial tool here

https://www.advice4lifeinsurance.com/free-financial-tool.html

Thank you,

Van Richards

Reference
Board of Governors of the Federal Reserve System. (2016). Report on the economic well-being of U.S. households in 2015.

Women are Just as Important as Men.

Since the 1900’s International Women’s Day has been observed to celebrate social, economic, cultural and political achievements of women around the world. Gender equality is the ultimate goal. Women have a great responsibility in society and it is important to recognize their contributions to the family and the workplace. Even though women take on equal financial responsibility society, is slow to catch up by accounting for the financial value of women. More women than men have no life insurance at all to cover their financial obligations.

 

For Married Women

The majority of today’s families depend on two incomes to make ends meet, yet working wives are less likely than husbands to carry life insurance coverage[1]. In a family situation, if a woman died suddenly it is unlikely that the family could maintain their standard of living on the spouse’s income alone. Life insurance makes sure that the security of the family remains stable.

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For Single Mothers

A single mother is the primary caregiver, breadwinner, and so much more. Yet more than one in three single mothers have no life insurance whatsoever, and many with coverage say they need more[2]. With so much responsibility resting on their shoulders, single parents need to make doubly sure that they have enough life insurance to safeguard their children’s financial future.

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For Stay-at-Home Mothers

Just because a woman that is a stay-at-home mom does not earn a salary does not mean they do not make a financial contribution to their family. Child care, cleaning, cooking and household management are all important tasks. The replacement value of which is often severely underestimated. In this situation could the husband afford to pay someone for these services, or take over these obligations and still work full time? Life insurance provides financial parity to a family.

The good news for women is that life insurance is generally cheaper for women than for men. Educating society on the value that women bring to their family will help in understanding the importance of protecting their family in the event that they are not there to provide for them.

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[1] Bureau of Labor Statistics, Employment Characteristics of Families, 2010

[2] LlMRA, Flying Solo Single Mothers Protecting Their Families, 2011

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