Exploring Your Financial Options: Why Loyalty to One Adviser May Not Be Best

Your current agent would love new business from you, but they expect you to check out the competition anyway!

• Some people think, “I already have an insurance agent, so I don’t need another one". However, this limits your ability to diversify and improve your overall insurance and investment products portfolio.
• The saying “one size fits all” does not apply to insurance! We can make smarter choices by looking at a few options rather than limiting ourselves to one agent or one insurer.
• Regardless of how you feel about your current agent, don’t limit your options by being mentally “committed” to one single provider. Explore multiple agents, insurers, and plans to meet your financial objectives! 

It is human nature for most of us to stick with something we are comfortable with, from eating at the same restaurants, cycling the same routes, and having the same weekend routines to unwind from work. Whatever the case, we tend to be creatures of habit, and that’s okay.

But unlike, say, short holiday destinations, the more critical something is, the more we tend to stick to what we know. From the perspective of financial planning, we could be robbing ourselves of better value or more appropriate/comprehensive coverage, potentially making a massive difference in payouts, premiums or both!

The Importance of Exploring Your Options

If we have had the same financial advisor servicing us/our family for many years, we may understandably feel bound by some sense of “loyalty” to them. But in reality, most financial advisors take no issue with their clients exploring options from other sources or companies. It's normal, expected and no decent agent will take offence. 

Different Companies/Advisors Are Good at Different Things!

“If any company had the #1 product for every category, the rest would be out of business.”

Let’s take a step back and look at a completely different industry, fast-food chains! They come in many formats and offer a multitude of options for your dining (if not medical) pleasure.

Let’s say, McDonald's had the best burgers, fries, chicken, etc., was the best value for money and provided the finest ambience and convenience; other fast-food chains would likely cease to exist! But, of course, they don’t and the others are still around because each of them bring something to the table (pun intended!) And, to state the obvious, customers are not homogenous in their tastes and needs either!

"I'd rather have a taco" (Photo by Moe Magners)

The same principle applies for insurance companies and financial advisory firms. There is no one company or one particular type of insurance or investment policy that has a monopoly on the market because they are all different, sometimes in very material ways.

Company A may have the best deals for health insurance, while Company B may have the best investment policies. In contrast, Company C may have the best value for money insurance coverage. Yet, many people still behave as if they can get the best possible insurance/investment portfolio from being a policyholder with one company! 

And it barely needs saying that we all have different tastes and needs, so one company’s solutions that worked well for a friend or family member may not necessarily work for you. Check out comparison sites online and DYOR... Do Your Own Research! Most agents will, naturally, say their solutions are the best, so give them a chance to show them and then decide their arguments make sense.

And at the end of the day, whether it's about medical treatment, fast food or insurance, it's always a smart move to consider a few options and get a second or third opinion!

Feeling Bound by a Sense of Loyalty to a Good Agent

It’s fair to say that many people have a preferred financial advisor or agent who has serviced them well and who has done a quality job professionally. Some may even be friends with them. Because of this, we may feel that we should “only buy from him/her.”

However, for financial advisors, their professionalism and quality of service come with the understanding that they are not the only choice. Wanting the best possible financial planning for their clients includes acknowledging that their hard-won clients should also explore other potential options. They may not suggest that you do that, but they understand that it's in your best interest!

Photo by Jens Lelie

Suppose you are looking to make a new policy purchase and have an existing advisor who has served you well. In that case, all you need to do is to include them as one of the options since there is an established business relationship. You're giving them a chance; it does not mean you have to choose them. Dealing with competition is part and parcel of the job, and the real professionals won't take it personally. (If they pull the “but we’ve been friends for so long” card, it will tell you about their professional standards!)

Unsatisfied With Your Current Agent And/or They Are Unresponsive

Sometimes, you get the opposite case, where you feel your agent has not served you well. Common reasons one may feel this way are:

• They sold you something you did not particularly need and now regret buying.
• Since the date of purchase and policy inception, they have made minimal effort to follow up and review with you.
• Worse still, if the original agent left the industry and the new agent assigned showed little to no interest as the more significant original commission didn't go to them. (This is not an uncommon scenario for those who bought policies to support friends and relatives new to the industry but concluded shortly afterwards that it wasn't for them!)
• Their response to your questions has either been unresponsive or not thorough enough.

Sometimes it’s not even that you are miserable, but just feel your existing advisor is “so-so”. Perhaps he doesn't quite "get" your situation and lifestyle or leave you satisfied that your overall portfolio has been put together well.

At this point, it is essential to be open-minded and objective; there is no rule saying that those already with an agent can’t take up from other insurers and agents. 

We are not advocating impulsively replacing your existing advisor or policies on a whim! But as you seek out a second or third option for what you need, you may come across a new agent who you find sincere, client-focused and perhaps closer to you in terms of age and mindset than your existing one, and who has just the right policy for you. If that's the case, go for it!

Share Your Current Portfolio of Insurance Policies

If you are looking for some new or additional insurance coverage or come across something that piques your interest, share your existing portfolio with the prospective agent. If the new agent is sincere, they will try to understand your current portfolio, so they don't make an unsuitable recommendation.

It is usually better to keep existing policies that add value rather than change them unless they are entirely unsuitable or horribly priced. Don't simply change because a new agent -or even your existing one- tells you to!

Conclusion

We ultimately owe it to ourselves to not limit our options by being open to hearing from multiple financial advisors. Realistically, we all have only a limited amount of time to spend on insurance, but a little extra effort at this stage will go a long way in the long term!

We encourage you to be open to new choices on the free market, and in doing so, you may find the paths forward to be limitless! Here are a few practical steps you can take towards this: 

1) When the opportunity arises, discuss your options with a financial advisor from a different insurer. If you find the options don’t make sense, no harm is done. 

2) Do your own research. Countless financial planning websites and blogs make independent comparisons between insurers. These websites highlight which companies have better deals, rates and which type of policies this applies to.  

HAVING MORE THAN ONE FINANCIAL ADVISOR OR INSURANCE AGENT. COMPLETED. ✅

Sources:

1. Header photo from Pexels