Can An RIA Sell Insurance?

Can an RIA also sell insurance?

However, without a broker-dealer relationship, RIAs can offer – and be compensated for – a wide range of insurance and annuity products.

Can an investment advisor sell insurance?

There are a variety of reasons why financial advisors should consider selling life insurance to their clients as part of their services. These advantages include the possibility to better meet their clients’ demands by delivering more comprehensive wealth planning services as well as the chance to earn commissions. The difficulties some advisors have in discussing life insurance with their clients, as well as the need to become an expert in a new field, are disadvantages.

What can an RIA sell?

Even for financial specialists, the plethora of investment options can be overwhelming. Those interested in investing might do so in the following ways:

Broker-dealers, wirehouses, and bankers can earn commissions by selling some or all of these goods.

Do you need a securities license to sell whole life insurance?

To sell any product, you must have the underlying life insurance license. In addition to a life license, an insurance producer must hold a securities license (series 6 or 7) and be registered with a broker-dealer in order to market variable universal life.

Can you sell life insurance with a Series 7?

The Series 7 license, also known as the general securities representative (GS) license, allows the bearer to sell nearly any individual security, such as common and preferred stocks, call and put options, bonds, and other fixed income instruments. Commodities futures, real estate, and life insurance are not included on the list.

Are financial advisors insured?

Errors and omissions insurance is not needed by law for most stockbrokers and registered investment advisors (RIAs).

With an amendment to the Oregon Securities Law enacted on July 31, 2018, Oregon became the first state in the US to require certain state-regulated financial professionals to hold errors and omissions insurance. In order to be licensed in Oregon, these financial professionals must must have at least $1 million in errors and omissions insurance.

(5)(a) Except as provided in paragraphs (b) and (c) of this subsection, every applicant for a broker-dealer or state investment adviser license or renewal shall file with the director proof that the applicant maintains an errors and omissions insurance policy in an amount of at least $1 million from an insurer authorized to transact insurance in this state or from any other insurer approved by the director according to standards established by r

(b) A licensed broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934, as amended, is exempt from compliance with this subsection’s paragraph (a).

(c) A licensed state investment adviser with its principal place of business in another state is exempt from the requirements of this subsection’s paragraph (a).

When investors turn over their life savings or move a retirement account to the care of a financial professional, they are understandably puzzled about their protections.

Many attorneys, doctors, and other professions are insured, so one could presume the advisor is as well.

There is currently no federal requirement that FINRA-registered brokers or SEC-registered investment advisors carry basic errors and omissions insurance “Insurance for errors and omissions (“E&O”). E&O insurance is a type of liability insurance for people who give advise or perform other services. Some refer to it as “liability insurance for professionals.”

You may have come across a mention of “SIPC” on a sign in your advisor’s office or on your firm’s account statements. The Securities Investor Protection Corp. (SIPC) guarantees cash and securities in a brokerage account against losses incurred as a result of a broker-bankruptcy dealer’s up to a specific level. SIPC does not cover losses caused by a broker’s or brokerage firm’s improper or negligent behavior.

Wait a minute – a financial advisor may manage hundreds of millions of dollars in investor funds, but he or she does not have professional liability insurance?


Investors may be able to recover a significant portion of their losses as a result of their financial professional’s misconduct through a FINRA arbitration award or a court verdict. Many awards and judgments, however, go unpaid. Smaller businesses may choose to close their doors rather than pay. Alternatively, a responsible advisor may leave his or her firm and work for a company or investment vehicle that is not FINRA or SEC-registered. If the investor’s claims were protected by insurance, the insurance policy would pay the investor a portion, if not all, of the award or judgment. Large companies with high net capital, or those that choose to carry insurance responsibly, already provide confidence that they will be able to make good on a successful consumer claim.

E&O insurance should, in general, cover a professional’s mistakes, errors, negligent behavior, and breaches of fiduciary responsibilities connected to the professional service that cause harm to the customer.

That usually takes the form of recoverable financial losses caused by unlawful behavior in the instance of financial experts.

For example, losses incurred as a result of a broker (or RIA, or someone dual-licensed as a broker/RIA) failing to follow client instructions and recommending investments that are not appropriate “unsuitable” for that particular investor, or acting in a way that breaches the investor’s fiduciary duty.

The good news for Oregon investors is that at the state level, there are now at least some new protections for certain financial professionals.

If you’re working with a financial advisor and want to know if they have E&O insurance, make sure to inquire.

Responsible advisers and organizations should be able to explain to their consumers what rights they have in the event that they file a claim to recover investment losses.

At Samuels Yoelin Kantor LLP, Darlene Pasieczny’s practice concentrates on all stages of corporate and securities law challenges, securities litigation and FINRA arbitration, fiduciary litigation in trust and estate disputes, elder financial abuse, and complicated civil litigation. Darlene’s expertise involves assisting investors in investment disputes before the Financial Industry Regulatory Authority (FINRA).

Is a financial advisor an insurance agent?

When insurance agents claim to be financial advisors but are actually pushing favored products and acting more like a salesperson than an advisor, it creates an issue. While a financial advisor’s goal is to get a holistic picture of a client’s condition and then work with them to achieve their objectives, an insurance agent’s focus is usually on identifying a client’s need that their insurance product can answer. In other words, it’s about fitting you into a product rather than finding a product that suits your goals.

What does insurance financial advisor do?

We’re searching for someone to join our team as a financial advisor. You’ll spend the day talking to customers about their financial goals and risk tolerance before recommending a financial planning strategy that fits their needs. To succeed in this highly regulated job, you need already have the necessary licenses and a thorough understanding of all of the current financial products available.

Financial Advisor Responsibilities:

  • Speaking with customers to identify their spending, income, insurance coverage, financial goals, tax status, risk tolerance, and other information necessary to construct a financial plan.
  • Giving financial advice and answering client inquiries about financial goals and strategies.
  • Providing customers with insurance coverage, investment planning, cash management, and other tactics to assist them achieve their financial goals.
  • Regularly reviewing client accounts and plans to see if life or economic changes, situational problems, or financial performance demand plan revisions.
  • Analyzing financial data provided by clients in order to build strategies for achieving their financial objectives.
  • Providing clients with financial document summaries, investment performance reports, and income predictions, as well as interpreting them.
  • Putting financial plans into action or introducing them to experts who can assist them.