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5 Hard-Learned Lessons From the DOL: An IMO Perspective

Posted by James Wong on Wed, May 08, 2019 @ 12:00 PM

For archival purposes only – DOL Rule was vacated on June 21, 2018.

It’s been 10 months since the DOL Rule was vacated. That’s it, less than a year since our world was turned upside down. And we know that it’s still in the process of changing the way we do business forever.


“It is not so much about what life hands you, but what you do with what you get.”

-Idowu Koyenikan

We signed up to be in financial services and to contribute to other IMOs, agencies, agents, and clients’ success in the best way we can. However, no one said it would be easy. The real work is just beginning, we’ve learned this the hard way. In light of that, we thought we’d share a handful of the vital lessons that came out of the DOL Rule that were necessary for us to learn so we could move forward with confidence.

Our first impression 

When the DOL Rule was first announced, it seemed to us a 1,000-piece unsolvable puzzle. As a team here at Partners Advantage, we pored over the documents and tried to make sense of what “the fiduciary standard” and “best interest” really meant. And like many in the industry, we were overwhelmed by anxiety, frustration and concern as we struggled to understand.

A change in mindset

It wasn’t until all the furor died down for a period of time, that we were able to start changing our mindset around what it would mean for us. We truly wanted to be an IMO that would remain standing throughout any upcoming changes and collectively decided to approach it as a period of exploration. It would mean taking a fresh look at our business model and how it could be reorganized. We believed that an IMO could be a valuable resource for supervision, automation and streamlining, as well as documentation, training and agent development.

Our key takeaways

Of course, everything wasn’t sunshine and rainbows and I won’t act like it was, but now that it’s been close to a year since the ruling was vacated, we’ve had time to reflect and see the lessons that came out of it. And it’s not from a perspective of thank goodness we made it through, now we can go back to the way things were. We actually believe, as a company, that it would be the wrong way to approach it. Instead, the lessons we’ve learned and progress we’ve made despite it, have been hard-won and they are lessons that we are beginning to implement even though the DOL and the “requirements” aren’t in-force at the moment.  

  1. Carriers must look at other distribution sources in addition to insurance-only producers. Up to this point, carriers had a large footprint in the independent agent space, but the DOL Rule has caused them to also look at registered reps, fee-based advisors, or P&C agents as potential distribution sources in order to hit their target growth initiatives.
  2. As an IMO, we need to be focused on development and continued progress within our organization. We recognize that what may have got us here, won’t get us to where we want to be. And those who compete only on access to product and price, are shortchanging themselves. It’s important that we stay true to our roots, what the IMO was created for in the first place — providing a comprehensive level of service to our producers. We need to start thinking about how we can uniquely position what we do by providing more holistic services, including product development, sales ideas and prospecting programs, and/or point-of-sale support. We have been forced to look at the risk involved if we DON’T take this approach.
  3. We have to be selective about who we work with. In the aftermath of the DOL, we’re faced with questions like: Is it worth taking on the risk if agents aren’t committed to putting consistent processes in place to fact find, to provide a comprehensive look at options and to give clients solid recommendations, as well as document the sales?
  4. Consumers have become aware of the term “fiduciary standard” and understand that they’re entitled to receiving service on that level. And this is going to change the sales process for the better. We need to take an active role in supporting our agents in taking a more consultative approach and emphasize the importance of transparency in the entire sales process, including commission.
  5. It’s becoming increasingly important to develop strategic relationships with others who might have different skillsets than we do. As a company, we believe in a team-selling concept. As an example, an IMO partnering with a Broker Dealer where each have their own areas of expertise—IMOs with the fixed products and Broker Dealers with securities and compliance. We now know we must think more about the end client and their needs, that our products can address, throughout their lifetime. This can help to ensure they’re receiving the highest level of service and value we can provide. And if that means we focus on our strengths as a company and refer them to others for certain things, so be it.

Final thoughts ...

More than likely, these are just the first of many lessons we still have to learn, and we’ll continue to share our experiences on the journey to helping elevate and innovate the insurance industry alongside you. This is only the beginning because even though the Rule is dead for now, it could be resurrected.

Not to mention, there could be additional changes from a regulatory standpoint or through new legislation. 

Whatever transpires and when, we want to be prepared for that possibility so we can continue to provide services and support that help the IMOs, agencies, agents and their clients we work with, to thrive in their businesses and lives.

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Tags: practice management, agency resources



This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.