This content is from: Wealth Management

The Final Barriers Between RIAs and Insurance Policies Just Fell

The DPL Financial Partners network can now access “virtually every major financial insurance category.”

A new business development at DPL Financial Partners, a company that enables fee-only RIAs to sell their clients insurance policies, just made the platform even more attractive to financial advisors.

On Wednesday, DPL announced it partnered with Principal Financial Group, the global insurance and investment firm with $701 billion under management, and started offering term life and disability insurance policies to its network of RIAs. The additions mean that “virtually every major financial insurance category is now available,” DPL said in a statement.

Historically, and still in the vast majority of cases, people are sold insurance policies by an agent or broker who receives a commission for the transaction. But investors are increasingly expecting financial advisors to be resources across their entire financial lives, including insurance and annuities. (Insurance agents also commonly license and register themselves to sell investments to their clients.) 

“Today, more and more, those insurance providers are competitors,” David Lau, founder and CEO of DPL, told RIA Intel.

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But for independent, fee-only RIAs who can’t accept commissions, crossing over into selling insurance was complicated — they couldn’t be paid for the transaction, but insurance is inevitably a part of helping someone manage their wealth. Some wealth managers write off annuities, but now might be the time to buy them.

To eliminate that friction, Lau founded DPL in 2014 and the platform opened to RIAs a few years later. The company works solely with fee-only RIAs that pay an annual membership starting at $1,000 to access DPL's platform of insurance policies and annuities from more than a dozen different carriers, including Allianz, TIAA, and now Principal. RIAs like the platform because it expands their value proposition (and they don’t have to share clients with an insurance agent), DPL acts as their consultant on insurance policies (which they might not have expertise in), and all of that is managed through the DPL platform.

RIAs could also charge clients for the new consultation on insurance, although most choose to include the service in either a flat financial planning fee, and or a fee based on the assets they’re managing for a client.

DPL has almost 1,000 RIAs in its membership network but that number could grow even faster with the addition of the term life and disability insurance policies. “I think it will continue to accelerate the membership. It allows us to serve our members more completely,” Lau said.

A larger network will provide even more money for DPL to invest in its discovery tools to help members find the best policies and annuities faster. More RIAs and potential policyholders should result in more bargaining power against DPL’s insurance carriers.

Lau also commended Principal for being the first carrier to offer term life and disability policies on DPL’s platform. Now, with speed relative to the insurance industry, other platform carriers will likely begin offering them, too.

“If I had a nickel for every time a firm said ‘we’re a fast follower, not a first mover,’ I’d be rich.”

Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.

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