Selling to a client’s needs is a key component of your code of conduct. Experts say that if you do this properly, you will sell more!  Not recommending the right amount of insurance can lead to disgruntled clients or beneficiaries down the line when they realize they do not have the insurance they thought and needed. You must make appropriate recommendations which are in the best interests of the client at the time of sale (amount, type, and price) and which address the client’s circumstances, financial needs, and objectives. Using the right approach and positioning needs analysis can make that easier and reinforce the recommendations you have made.

Licensees must also ensure they retain written documentation, including records of client discussions and emails, which clearly demonstrate how the product is suitable for the client.

Documentation must support your sales strategy

You can do this by documenting your needs analysis. As the advisor, you must make a diligent effort to obtain full information about the financial and personal circumstances of every client prior to making a product recommendation. As part of an Agent Best Practices Approach, agents should complete a written "Needs Analysis" for each client that includes:

• Relevant disclosures 
• Recommendations/advice 
• Product information
• "Know Your Client" information 

It is important to understand that insurance regulators will be looking for evidence of needs based selling.

Protecting your business practice is important. There are many readily available industry tools to assist you in meeting your obligations and/or to help you draft your own needs analysis document. Read more about “The Approach” on HUBLINK or contact your local Business Development Specialist to learn about HUB “Methods” training process.

Advisors Fined for Lack of Appropriate Needs Analysis: 

Regulators are prepared to impose Administrative Penalties (AMP)/Fines against advisors who are unable to evidence an appropriate fact find and needs analysis has been conducted. Three of these cases, identified through regulatory audit, are summarized as follows:

1. $5,000 AMP:  3 counts identified - 1 fine imposed as advisor pleaded guilty. 

• 2 counts were specific to advisor choosing a “balanced” asset allocation without knowing the risk tolerance of the clients 
• 1 count of not conducting a fact find of the client situation before making product recommendations 

2. $8,000 AMP:  2 counts identified – advisor found guilty 

• 1 count of not collecting information on the client and completing a needs analysis 
• 1 count of not providing proper information pertaining to a UL product to a client 

3. $5,000 AMP:  3 counts identified – advisor pleaded guilty 

• 1 count of not servicing an inforce UL client 
• 2 counts of not collecting information on clients and completing a needs analysis 

Remember, 
Good Business is Compliant and Compliance Matters!