SHOULD YOU BUY INSURANCE FROM AN ADVISOR FROM ANOTHER PROVINCE?

We explored the merits of changing advisors when you move to another city. Let’s look at something more extreme: buying life insurance from an advisor in another province. That’s possible since licencing is province.

Why Would An Advisor Bother?

The advisor might live in a place where the opportunities seem limited. Acres of Diamonds (speech or book) tells us about a traveller seeking riches who finds them after returning home. Why would an advisor who knows the story look for clients far away?

The advisor might be marketing across provincial borders. For instance, an advisor who targets prospects at national conferences meets people from across the country. When a prospect shows interest, it’s difficult to turn away. Getting licenced where the prospect lives is an easy solution.

Mystique

Distance intrigues us. I got invited to a local event with a cross-border speaker — even though experts live locally.

An advisor from afar may have different perspectives and make suggestions that look more innovative. This assumes there aren’t making blunders because they aren’t familiar with valid reasons for differences (e.g., in tax laws).

Moving

You might have moved to another province. If you’re a big client, your insurance advisor might get licenced where you now live to sell additional coverage to you and your new connections.

If your advisor visits, expect them to see other people to spread the costs over more opportunities.

Limited Selection

The more experienced advisors tend to live in larger cities. If you live in a small place, you might not get the optimal advice or service. If you’re forced to look outside, an advisor from another province may seem like a reasonable choice.

The Costs

When dealing with a distant advisor, will you get the same level of service you get locally? It’s tough to know. Technology makes staying in touch easier and you probably don’t have many in person meetings with a local advisor either.

An advisor who does business elsewhere incurs higher costs (airfare, food accommodation). What do they do to compensate?

• sell products with higher margins?
• sell larger amounts of coverage?
• place more implied pressure on you to buy now?

There’s also the personal costs. When you travel on business, are you more productive than at your normal office? What about the advisor’s family? They pay a high price too since they aren’t together as much. The extra revenue helps offset the pain and missed school performances. That revenue comes from you.

Links

• Should you change advisors when you move?
• The lure of “exclusive” financial strategies
• Advice about advisors from Game Of Thrones
• image courtesy of Photl

PS Local advisors pay taxes locally, which helps build your community.