This publish is a part of a collection sponsored by AgentSync.
Managing compliance all through the producer licensing course of is complicated, particularly when it’s performed by hand and much more so when it entails managing variable traces brokers. As a result of securities side of variable traces, compliance administration for people who promote these merchandise entails an further degree of oversight on high of the already complicated state-based regulatory framework the insurance coverage trade operates in.
Similar to typical producers, on the subject of onboarding newly recruited variable traces brokers, compliance is a excessive precedence for any group making an attempt to keep away from regulatory errors and their related penalties. However, as a result of these brokers have to fulfill further necessities with the Monetary Trade Regulatory Authority (FINRA), the onboarding course of entails a number of extra steps. Whether or not it’s performed manually or utilizing an automatic resolution, the onboarding course of for variable traces brokers goes slightly one thing like this:
- Step 1: Gather normal data together with proof that the dealer maintains an E&O coverage, background test data, and a W-9.
- Step 2: Get working contracts and approvals between brokers and the entities they work with signed and saved.
- Step 3: Confirm state insurance coverage licenses in every line of enterprise and state the dealer will promote enterprise.
- Step 4: Confirm the dealer’s Central Registration Depository quantity and guarantee they’ve a FINRA registration, have handed a Sequence 6 or Sequence 7 examination, and have established a relationship with a broker-dealer agency.
- Step 5: Make appointments in a fashion compliant with every state’s particular rules.
- Step 6: Confirm annuity coaching for states that require it.
To acquire the licensing knowledge and securities data wanted for onboarding, variable traces brokers are sometimes subjected to near-tortuous ranges of repeat knowledge entry. Not solely is the apply of filling out the identical data over and again and again senseless and time consuming for brand new recruits, but it surely additionally doesn’t make an excellent first impression of your provider or MGA.
3 pitfalls of handbook compliance
It’s necessary to recollect, dealer compliance administration doesn’t finish after onboarding. Compliance checks ought to exist all through your complete variable traces dealer lifecycle from hiring to termination and each step alongside the way in which. Due to its ongoing nature, managing compliance by hand may be notably irritating. We’ve mentioned the downfalls of handbook compliance administration on a number of separate events, however in case you’re new to our weblog, right here’s a refresher on a number of the main setbacks.
1. Lack of knowledge visibility
As we’ve already established, onboarding new variable traces brokers requires amassing knowledge from quite a few sources. From background checks to E&O insurance policies to verifying state insurance coverage licenses and FINRA registration, manually making certain the knowledge you obtain is correct and up-to-date may be fairly the problem.
In fact, you might at all times simply ask the dealer to record all of the states they’ve ever been licensed in, however, the truth is, generally they don’t even know what’s up-to-date on the subject of their licensing.
2. Poor use of time and expertise
An absence of knowledge visibility within the onboarding course of means somebody in your staff goes to be spending quite a lot of time buried in heaps of paperwork simply to validate present licenses or safe appointments for a brand new distribution companion. Whereas some organizations depend on compliance groups to handle this, others search the knowledge immediately from the horse’s mouth – their new recruits.
It’s protected to say that variable annuities brokers have sufficient on their plate with out the forwards and backwards of making an attempt to trace down essentially the most correct and up-to-date data. Not solely is that this irritating and time consuming, but it surely’s additionally a reasonably poor use of your new recruits’ expertise. These people ought to concentrate on constructing relationships and promoting merchandise, not happening a wild goose chase simply to onboard.
3. Elevated probability of human error
When finding correct, up-to-date dealer data entails navigating between a number of completely different spreadsheets, paper information, on-line databases, and extra, the possibility of human error will increase considerably. Particularly when the information is being transferred from one supply to a different by hand.
It’s very important that variable traces brokers preserve correct data as a result of further degree of oversight concerned in promoting variable life insurance coverage and variable annuity merchandise. However the actuality is, the extra human arms you might have touching your knowledge, the extra possible data will get neglected or entered incorrectly.
Improve knowledge visibility with a single supply of fact
If you happen to’re having bother monitoring down correct, up-to-date data all through the onboarding course of, don’t depend on your new recruits to do the heavy lifting. As a substitute, take into account a contemporary resolution that may present real-time dealer data from a single supply of fact on the click on of a button.
By means of automated dually licensed communications, you may eradicate knowledge silos in your inner staff and guarantee your brokers have entry to real-time, correct data the primary time round.
Not solely can an automatic compliance administration resolution validate your knowledge to make sure accuracy, it additionally takes the repeat knowledge entry out of onboarding by permitting brokers to submit all needed documentation in a single central and simply accessible self-service portal. Your variable traces brokers shall be a lot happier after they can spend much less time on knowledge assortment and extra time doing what they do greatest.
Plus, with much less figurative and literal touches all through onboarding, you may relaxation assured you’re not growing your threat of human error or oversights. Speak about making the entire course of loads smoother and extra environment friendly for everybody concerned!
Prioritize actionable knowledge all through your complete dealer lifecycle
Growing knowledge visibility within the variable traces dealer onboarding course of is simply one of many advantages of investing in an automatic compliance administration resolution in your provider or MGA/MGU. To make sure you’re shielded from dangers, ongoing compliance upkeep ought to be a precedence all through your complete dealer lifecycle – from onboarding to termination.
Having full visibility into your dealer knowledge is necessary as you’re employed to confirm licenses, monitor persevering with schooling necessities, and renew provider appointments. AgentSync Handle provides a consolidated view of dealer eligibility that unifies Monetary Trade Regulatory Authority (FINRA) and Nationwide Insurance coverage Producer Registry (NIPR) knowledge right into a single profile.
If you happen to’re prepared to extend your knowledge visibility and reduce your compliance threat with efficient, environment friendly, and ongoing compliance help at each step of the dealer lifecycle, e book a demo and learn how AgentSync can assist.
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