Through our licensing of the intellectual property and patent rights of our actuarial model, different insurance companies are able to create their own FSLM polices, each company’s products having different pricing and sub-accounts.
FSLM policies have no premium load benefiting either the carrier or the agent, nor any surrender charges. All carrier and agent expenses and charges are asset based. Even the COI charges are translated into an asset based charge instead of a per thousand amount for greater transparency.
Each insurance company has at least 2 product versions, one with trail based comp for registered reps and one with zero comp for use by RIAs. Some may also have private placement and offshore versions. A carrier’s policy administration system provides the RIA with the asset value on a monthly basis to include in client billing.
Each insurance company’s web site contains the exact pricing, sub-account information, and other product material concerning their specific FSLM policies.
The FSLM video teaches about life insurance design as well as the FutureSystem™ Life Model. It describes the pitfalls and problems with traditional life product chassis designs and shows how the FutureSystem™ Life Model solves these problems.
FSLM products are designed with both asset based comp for registered reps and zero comp for RIAs simply because we believe that the client is better served and protected in the long run. There are no actuarial or mathematical reasons that demands asset based comp. As with any other security, a FSLM product must be financially managed over a lifetime because its time horizon is very long, a lifetime. Financial policy management involves the continued process of designing an allocation, tweaking it over time for current market conditions and client life changes, reviewing, analyzing, selecting, and reselecting of the subaccounts in each asset class.
It is the ongoing policy investment management for which an advisor should be paid. The act of selecting and writing the policy should not entitle the producer to the present value of a lifetime of commissions paid up front. Any client who buys a variable life policy that pays upfront commissions leaves himself at great risk because there is no incentive for the advisor to perform ongoing investment management functions. Who will help the client if all the comp has already been paid? Who will help the client if the producer retires or dies? There is no source of financial incentive to be paid to another advisor to take over the account if all the comp has already been paid. Asset based comp forces accountability and service by the advisor. As with other securities, the client has the right with an FSLM product to change advisors and move the stream of comp to another if the original advisor stops performing, dies, becomes disabled or retires. It has been proven that properly managed variable life and annuity policies will have a much greater return than those not being managed by anyone.
A good financial advisor can add much more value and return than the compensation they receives. Computer programs to help allocate and determine risk allocation are not designed to replace the financial professional but unfortunately are too often used in this manner. Asset or fee based compensation protects the client and promotes development of their long term relationships.