Banks are in the business of 'manufacturing', 'wholesaling' and 'retailing' financial products and services.
Professional life insurance advisors are in the business of providing unbiased financial advice and solutions which are in the 'best interests' of the client. Their role vis a vis the client is now moving through the congress in the US toward a 'fiduciary' relationship standard. The SEC is actively pursuing this regulatory direction (Dodd- Frank law). When fully enacted the life insurance advisor will be held to the standard of a Professional Practitioner.
Banks' sales representatives are in a systemic conflict of interest position in the promotion of proprietary products on behalf of their employer. They cannot offer unbiased advice or product solutions. They are paid to offer their employers' products and services. There cannot be 2 masters.
A life insurance contract is not a commodity. It is a values based legal contract. It carries with it an implicit duty of care - fiduciary in nature.
Under the current banking regime bank sales representatives do not qualify as 'unbiased professional financial practitioners' whether within a branch, next door to a branch or online.
The SEC is setting the stage for a resolution to this decades old systemic conflict of interest within the financial services industry.
The public will draw their own conclusion.
Dan Zwicker
For Advisors Only
January 28, 2011
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