Wealth management includes insurance

Many clients have had a less than favorable experience with insurance. Sarah Widmeyer chats with Jeff Fray, VP, Insurance Services, on how to make sure clients are set up appropriately, with insurance solutions as part of their overall wealth plan.

Sarah Widmeyer  0:16 

Welcome to Conversations on Wealth, hosted by Richardson Wealth, a podcast dedicated to helping Canadians navigate the complexities of your wealth with a multi-dimensional approach to planning and wealth management. I’m Sarah Widmeyer, Senior Vice President and Head of Wealth Strategies at Richardson Wealth. And today we’re discussing insurance, and why investors should expect their financial advisors to integrate insurance strategies and products into their overall wealth plans. At Richardson Wealth, we have developed a unique insurance structure to help advisors manage their clients’ insurance needs. Joining me today is the absolute right person to speak to this. Jeff Fray, Vice President (of) Insurance Services here at Richardson Wealth, and a long-term insurance industry expert. Thank you for joining me today.

Jeff Fray  1:10 

Thanks Sarah, my pleasure.

Sarah Widmeyer  1:12 

So let’s just jump in, there’s so much to talk about on the subject of insurance, or as you sometimes call it, the “I” word. Many clients have had a less than favorable experience with insurance. And in part, as it touches on some difficult topics for people to consider, such as death or long-term illnesses or disabilities. There also seems to be some confusion around the want versus the need of insurance coverage. It’s a lot for advisors to sort through and understand, Jeff, how (is it) best for an advisor to make sure their clients are set up appropriately, with insurance solutions as part of their overall wealth plan?

Jeff Fray  1:57 

Well, the first thing I would say, and I don’t use the “I” word; I use it to get people’s attention. The bottom line is, if any advisor approaches their clients and asks about insurance, the wall goes up immediately.

Sarah Widmeyer  2:08 


Jeff Fray  2:08 

And the reason for that is, is each and every one of us has had a bad experience about it, either the car company didn’t reimburse our insurance for an accident, the brother in-law that showed up and sold me a $10,000 overpriced policy and disappeared from the face of the earth. We’ve all had those experiences. At the investment business level, the high net-worth clients, the business has changed dramatically. It’s not about “I need insurance”, and listen, everybody needs it at one point in their life or not. Everybody does. At Richardson Wealth, we specialize in working with clients that have achieved and accumulated a high degree of financial independence. And the business becomes much different. We still use insurance, in this case, it’s life insurance, specifically. We don’t touch other risk profiles in the business. And it becomes a want business. And what I mean by that is high net-worth individuals do not need insurance, their financial well being, whether it’s for income, or working capital for the business, is usually well funded. So how in the world and why would an advisor talk to their clients about insurance? So that’s why I say you don’t start off with the “I” word. What you start off with is a deep meaningful in-depth conversation about the client’s financial wherewithal, what their goals and objectives are, and most importantly, what is it they want to do financially?

Sarah Widmeyer  3:30 


Jeff Fray  3:30 

You know, the great question to start off with a client is “If there was one thing financial I could do for you today, what would it be?” And then sit there and be quiet. Let the client tell you what they want. Do they have a will? You know, do they have a business to sell? We’re in the business of conversations, again, to know our clients and building deep relationships. Products today are the commodity if you will of the financial world. Everybody’s got em.

Sarah Widmeyer  3:55 


Jeff Fray  3:56 

So what makes the difference? And that’s where Richardson Wealth really shines. We are a “trust the process, trust the math” type of advisor. So we like to get into these deep conversations, our, some of our IAs are excellent at it. Others aren’t. But it doesn’t matter. Because we’ve built out tax and estate planning teams that specialize in these type of conversations. We have an excellent group of people that do top notch financial planning, it could be a quick plan, three pager to figure out cash flow from an RSP simply can be done in 20 minutes. Or it could be a half day conversation about the intricacies of all your financial affairs; what you own, what the cost base is, what’s your tax situation? Do you have a pension? These are deep, deep conversations that result in a financial plan that focuses on a) the technical details of what the client has, but more importantly, what is it you want as a client and that’s where we start.

Sarah Widmeyer  5:01 

Okay. So starting at that point, then you’ve talked a little bit about how Richardson Wealth is structured regarding financial planning and financial planning discussions. How is Insurance Services structured? And how do we support advisors in providing fulsome and customized solutions to their clients?

Jeff Fray  5:23 

Well, great question because that’s what it comes down to. We’ve built our own highly qualified, some of the best people in business, in-house insurance organization. And these people are well qualified in how the investment world works, the importance of financial plans 90% of our business is a result of a financial plan. And by that, I mean, the IA and the tax and estate planning group would sit down with a client and have that fulsome conversation and find out what the client wants. And by that, I mean, you know the client’s sitting on 10 million, 100 million of assets, that really doesn’t matter. If you’re sitting with a client that’s got 10 million bucks, they only need five of it to support lifestyle and retirement, they got 5 million they don’t need. And let’s say they got a tax issue of two and a half million, about 25% of their estate will disappear on the last death of a couple. How do they feel about that? Are there some options to mitigate the effect of that only estate? Do you have a dependent child? Is it a closely held business? Meaning you want it to stay in the family? How do you pay that tax, and that’s where some life insurance products may be able to address that problem in a cost effective, tax efficient manner. But the bottom line is, we are dedicated to a process to get to that point. So we don’t sell insurance here, we solve problems. And we provide solutions that are customized to that very client situation, and that’s what makes the business so interesting, because every client, what they want, where they’re headed, and what they’ve got, are all different. So to get back to your initial premise of why I say the “I” word instead of insurance, I don’t want people to feel they’re going to be sold here anything. Come and talk to us.

Sarah Widmeyer  7:07 

Right. So your team then. So let’s talk about your team, how do you go about selecting the insurance consultants and services team?

Jeff Fray  7:15 

Well, it’s my primary responsibility and why I started at Richardson Wealth was to internalize and build a top notch insurance operation within the firm. And we’ve spent four years doing that. Without boasting, I believe I have a unique talent of finding the right talent that knows how to work in coordination with the investment advisors. And that’s the key.

Sarah Widmeyer  7:39 

You do.

Jeff Fray  7:39 

And I’ve been fortunate in my work life over 35 years, I’ve been down this road a few times, building out organizations, and talent rises to the top. And that’s what we’ve managed to do is to attract the talent here to this firm, because we do business the way top talent likes to work.

Sarah Widmeyer  7:57 

Very good. What is the best advice that you can give to advisors who are hoping to add insurance services to their practice?

Jeff Fray  8:05 

Don’t use the “I” word first and foremost. We’re not going to sell your clients anything. Let’s sit down and have a conversation. Pick out three of your top clients. Um, the… one of the most appealing opportunities here as clients with holding companies, usually it’s trapped cash they don’t need for lifestyle or business.

Sarah Widmeyer  8:23 


Jeff Fray  8:24 

There’s going to be an egregious tax reckoning on that, on death.

Sarah Widmeyer  8:27 


Jeff Fray  8:28 

Talk to your estate insurance advisor, talk to your tax and estate planning group. Doing a financial plan for client is the best way to uncover opportunities. (1) You find assets because a financial plan is no good unless you know the full picture. And we don’t have all our clients assets, we know that and (2), it will illuminate potential opportunities to pay tax in a cost effective tax efficient manner. Insurance may or may not be the appropriate solution for consideration. But frankly, I’ve got the best people here to determine whether it is because 25% of the time we tell the client “You’re in great shape, you’ve done your reorganization properly, your tax hit is minimal based on the pre planning you’ve done” and it may be they’ve got insurance already great or they’ve done dual wills or they’ve gifted money before death. I mean, there’s lots of other strategies, insurance just happens to be one of them. And then once we’ve gone through that process, it’s all about “trust the math,” if the math doesn’t work, then we don’t recommend it. We tell you or give you another solution to address the goal or objective you have.

Sarah Widmeyer  9:34 

What about some of the more advanced insurance solutions for advisors to consider? There’s a lot of new, seemingly new products or new angles on insurance solutions that have come to market in the last I don’t know decade, two decades. What would you want advisors to consider when thinking about some of these?

Jeff Fray  9:53 

Don’t figure or expect, you to become an expert in this. The insurance companies – the products have not changed tremendously. What has changed is how insurance companies packaged them, and how they fit certain circumstances

Sarah Widmeyer  10:06 


Jeff Fray  10:07 

If you were to-told me 35 years ago that we’re going to sell insurance to clients based on want and their tax issues, that never got talked about 1985,

Sarah Widmeyer  10:14 


Jeff Fray  10:15 

it was all about sit down and figure out what they need for final expenses, do they have a mortgage? And lay, hey, some clients still, that’s really important work. But for our clients out there, at my age, we’ve done most of our work, we’ve accumulated the wealth we’ve got. It’s a much different gig. So does insurance work? Who knows, but let’s talk about it first and foremost, because it’s not for everybody. And at Richardson Wealth, we’ll tell you that. We’re in the solutions business. If there’s something else that we could recommend that does it better, meaning the math works better, we’re going to recommend it. But trust, if insurance does do everything we want it to do and the math works, then we’re going to recommend it.

Sarah Widmeyer  10:15 

At Richardson Wealth, we say the advisor’s our client, and we mean it, we put them first so they can serve their clients with ultimate service. How’s this approach reflected in our insurance services?

Jeff Fray  11:09 

Well, the way we look at it insurance service, quite frankly, Sarah is our client is the investment advisor. And some of them don’t like to be called that. And that’s fine. But they are the quarterback of everything that happens with a client. We do no work with clients, a little bit on the outside, but it’s a very, very miniscule part of our business. 99% of our estate insurance advisor’s time is spent working with the IA’s clients. And the reason for that is we’ve got two risks here. One, we don’t have a great relationship, meaning the insurance person usually gets brought in to meet a client and you might have done business with them as an IA for 20 years, you have the trusted relationship. That’s the key. And we want, meaning the estate insurance advisors to build that trust with the IA so that they know when they can, you know, introduce us to Mr. Jeff and Jill Fray, that they’re going to complement the relationship, not detract from it. So, you know, we want to make sure we keep the investment advisor happy with the quality of our work. And we want to keep the end client that writes the check really happy number one with the IA and Richardson Wealth, because then everything works.

Sarah Widmeyer  12:27 

Jeff as always, it’s such a pleasure to talk to you. Do you have any closing thoughts that you’d like to share with us?

Jeff Fray  12:33 

There’s never been a better time to get involved in this business. It’s about doing the right thing, the right way for your clients. And we live by that at Richardson Wealth. So come and have a conversation with us. Trust that we have the ability to put you in front of the right people with the right solutions and the right advice at the right time.

Sarah Widmeyer  12:54 

I’d like to thank our special guest Jeff Fray for joining us and sharing his expertise on this so important topic. If you’d like to learn more about how we support advisors in providing insurance strategies and solutions at Richardson Wealth, you can visit our website at RichardsonWealth.com. You can also follow Richardson Wealth on LinkedIn or Facebook for a broad range of information on planning topics. Thank you all for listening today. And be sure to tune in for future episodes and more great advice.