What exactly does Opportunity Concepts (OC) do?
OC is a life insurance consulting company. Working primarily through professional advisors, OC uses in-depth industry knowledge to provide:
- Objective, third party, technical audits of life insurance policies, showing how
they are performing and how they compare with current market options
- Insurance strategies for family protection and estate planning
- Insurance policy management strategies for trustees and charitable organizations
- Insurance strategies for business succession
- A secondary market for annuities and life insurance policies
Life Settlements are one aspect of these services which tend to get attention because they are a newer development and a burgeoning market.
What is the relationship between Lawson Insurance Services (LIS) and OC?
LIS is a life insurance brokerage company, providing the link between agents and insurance carriers. LIS and OC have the same ownership and are housed in the same offices. There is a close relationship. The client and his/her advisors are the recipient of quantitative information but which they can make informed decisions regarding the management of the subject insurance portfolio. LIS is a conduit to the open market and is often utilized by clients and their circle of advisors to seach the market for quality carriers and innovative products which, depending on the audit results and stated goals, may better complete the planning.
How does Opportunity Concepts get paid?
OC is a fee based life insurance consulting firm. Alternately, we will provide audit or consulting services on a contingency basis; if a client and his/her advisors take action based on the work of OC, the client's agent will broker the policy through LIS.
Isn't this a conflict of interest , since there is a financial incentive to replace a policy?
We believe not, since there are safeguards against this. First, a policy audit is a technical review that results in a quantitative report on how the current policy is performing and how it compares to what is available in the market - it is not a subjective recommendation. Second, an insurance agent is almost always involved as well as one or more professional advisors. As a side comment, in a market economy ANY financial transaction has an incentive on the part of the seller, including the original sale if the policy. Finally, on a fee basis, no client or agent is required to go with the products of Opportunity Concepts and Lawson Insurance Services.
Is there a full disclosure of fees?
Fee based consulting is clearly laid out in a comprehensive engagement agreement. As stated above, fees associated with a policy replacement are normal brokerage fees. LIS has access to the entire market of brokerage carriers, so the best policies are available to the client at the lowest cost. For life settlements, some states have begun to regulate fees and many funders comply with these rules for settlements in all states, including Michigan, an unregulated state. As with the original sale of policies, these regulated fees are not normally disclosed to the client. Opportunity Concepts and Lawson Insurance Services dislose all fees as requested by clients and advisors.
Bill markets to the advisor community. A broker should only work through agents. This looks to me like he is a competitor. What is the situation?
Although Bill markets the consulting services of Opportunity Concepts to advisors he rarely acts as an agent, and only at the specific request of the advisor and the client. Whenever a policy is replaced at the discretion of the clients advisor, the existing agent is brought in as the agent on the replacement, even if he/she did not originate the audit or did any work in placing the new policy. We actively encourage agents to partner with us in approaching the advisor community.
Both policy replacements and life settlements may sometimes be necessary, but they should not be "marketed".
We market information, not outcomes. Our motto is, "Objective Information Drives Informed Decisions".
OC services are sounding interesting, but when do I bring them in? How do I know when a policy needs to be audited? My clients tend not to discuss policies.
The reason for this passive position is that most policy owners consider a life insurance a one-time decision rather than a financial investment that needs to be managed. Any policy needs to be managed on an ongoing basis, regardless of type of policy, issuing insurance company, etc.
This is a relationship business. Isn't there a risk of damaging relationships (especially with the agent)?
There should be no risk with the client since no action would be recommened unless it is in his/her clear interest. Some agents may have an initial negative reaction but tend to be receptive if they are educated to the fact that this is in the best interest of the client and that they also stand to benefit.
Why not rely on the agent to decide when a policy audit is needed (and have them do it)? Exactly what differentiates Opportunity Concepts from services that agents provide?
Theoretically, this is possible but agents have traditionally provided needs analysis and not in depth audit and management services. Few agents are prepared to provide an in-depth, technical policy audit with statistical and stochastic modeling and empirical financial anylysis.