FSI offers long-term disability, life insurance to members

Program guarantees members coverage at a group rate FSI has secured as the plan sponsor.

In a bid to attract new members and retain existing ones, the Financial Services Institute is offering its 37,000 individual members access to long-term disability and term life insurance.

Under the new program, called Covered Advisor, FSI members are guaranteed coverage at a group rate that FSI has secured as the plan sponsor. The program, which was quietly launched earlier this month, is being rolled out through next summer.

“While most advisers urge clients to protect themselves with tools such as long-term disability and life insurance, the majority of advisers don’t have adequate protection,” Dale Brown, FSI president and chief executive, said at the FSI Financial Advisor Summit in Washington on Monday. “Especially with long-term disability, the rates on the individual market are incredibly expensive, and most independent advisers don’t have access to true low group rates.”

The rates are based on age ranges. For instance, $10,000 of monthly long-term disability coverage would cost a 38-year-old FSI member $70 each month. For a 56-year-old, the cost would be $225. For $250,000 in term life insurance, the 38-year-old would pay $32 per month, and a 56-year-old would pay $112.75.

The program also is available to an advisory firm member’s support staff, if they join FSI at an annual dues rate of $49. Mr. Brown emphasized that neither FSI nor its member firms are generating revenue from the insurance. All of the income is used to pay for premiums.

“We built a program that should fit the needs of a majority of advisers,” Christian J.S. Roberts, president of Advisor Group Benefits, told reporters at the FSI conference. His firm is managing the program.

More from FSI’s Dale Brown: Why the group is providing insurance protection for its members

The FSI, which represents independent broker-dealers and financial advisers, is offering the program on a rolling basis between now and next summer to its 100 member firms. For the first four companies that are allowed into Covered Advisor, the enrollment period ends Oct. 3.

“So far, enrollments are exceeding expectations,” Mr. Brown said.
As noted, the FSI is comprised of 37,000 advisers — more than double its membership of 15,000 three years ago, when the organization started subsidizing first-year dues. Annual FSI dues are $99.

FSI spokesman Chris Paulitz said the group has successfully held on to members after the one-year subsidy ends. The insurance program is designed to bolster retention further and add new members.

“For us, it’s the [membership] numbers more than the revenue, and we need to keep growing that number,” he said.

The FSI’s primary mission is to influence public policy. Having more members gives it more leverage on Capitol Hill, in statehouses and at regulatory agencies.

When FSI sends its members to meet with a lawmaker, it wants to show that it has strong representation among his or her constituency.
“When you can say, ‘In your state, we have 5,000 financial advisers,’ that opens doors that nothing else can,” Mr. Paulitz said.