July 30, 2010
Compliance costs-both in terms of finances and time-are high, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients.
I am licensed to sell and service life and disability insurance in the State of Washington. The Washington Office of Insurance requires 24 hours of continuing education, including three hours of ethics in order to renew that license. I am also a provider of CE in Washington.
Every life and disability company I represent has firm and rigorous compliance rules and regulations. It takes several hours each month to meet those standards and all agents are subject to random audits.
The amount of paperwork and record keeping has escalated in recent years even though many companies are going "paperless" with the result of my file cabinets being full of documentation as never before.
My compensation is 100% commission based yet almost every company has reduced agent commissions while demanding more compliance record keeping. The result is diminished earning capacity. While I have never charged a fee for the work I do and hope to avoid that step, it appears that the OIC and SEC are pushing agents toward that structure.
I love the work I do and have a high level of persistency over the last 35 years. I do not get complaints even though I have served over 2,500 individuals and families.
95% of the clients I serve could not afford to pay fees for the work I do for them. I've never gotten rich in this career and never will because I serve the masses, not the classes. I will leave the business rather than continue in this great profession if the proposed fiduciary responsibilities are forced upon me.
If the SEC proceeds and forces me and other agents to a fee based model, the community will lose a great number of honest and highly trained professional agents who have provided a great service to individuals and small businesses. That would be a travesty of justice.