The Importance of Clarity in Financial Services

Do your clients have a complete and crystal clear understanding of their insurance policy? Given the way financial language has evolved, it's hard to fault clients for being in the dark about what their products actually cover, and this ultimately hurts client relationships.

Connect Through Clear Communication
This is the primary reason why author Kenneth Wollner wrote the book, "How to Draft and Interpret Insurance Policies. "What many policy holders may be indirectly aware of is the fact that there aren't any regulatory statutes that dictate these kinds of documents must be written in plain, understandable language, according to the Michigan Bar Journal. Wollner has 30 years of experience as an attorney, underwriter and consultant, and makes the case that it's well within the power and duty for policy authors to make the language clearer. The same case can be made when insurance providers and advisors reach out to clients. Establishing a process that ensures clear communication will go a long way in helping your clients feel confident in your advice.

Most Insurance Clients Are Flying Blind
Recent research supports the claim that most clients need a clear explanation of their insurance policies - especially life coverage. LIMRA found 62 percent of life insurance customers in Canada can't explain their policy or its purpose - a scary statistic and one that insurance advisors should be looking to reduce. A review is crucial to connect with your clients to explain this important aspect of financial planning. This is fundamentally true. However, advisors play a key role from the start and should work to make certain their clients have a firm understanding of whether their families will be taken care of and their policies are right for them. A review is a great opportunity to engage the whole family in a conversation around financial security, planning, and the products available.

With a clear communication, you can develop a strong and lasting relationship with your clients, and you can continue to be a consistent and reliable source of knowledge as their needs change. If your client requires a policy review, you'll be in a strong position to retain his or her confidence and business. One simple truth in life is that nothing stays the same forever - especially insurance. Life changes can alter your clients' requirements. At the same time, a shifting economic climate causes an equal number of alterations in insurance policies. Accordingly, a smart decision is to synthesize the changes in your clients' lives and economic conditions to provide them with the clearest insurance strategy.

The biggest step is building a strong rapport and a sufficient level of confidence with your clients so that you are invited to go through the private changes in their lives, which can often be a source of pain, shame or embarrassment. A personal connection is essential and helps to ensure your client will keep turning to you for advice.