This put up is a part of a sequence 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 includes managing variable strains brokers. As a result of securities facet of variable strains, compliance administration for people who promote these merchandise includes an extra stage of oversight on prime of the already complicated state-based regulatory framework the insurance coverage trade operates in.
Identical to typical producers, relating to onboarding newly recruited variable strains brokers, compliance is a excessive precedence for any group attempting to keep away from regulatory errors and their related penalties. However, as a result of these brokers have to satisfy extra necessities with the Monetary Trade Regulatory Authority (FINRA), the onboarding course of includes a number of extra steps. Whether or not it’s performed manually or utilizing an automatic answer, the onboarding course of for variable strains brokers goes a bit of one thing like this:
- Step 1: Acquire basic data together with proof that the dealer maintains an E&O coverage, background examine 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 strains brokers are sometimes subjected to near-tortuous ranges of repeat knowledge entry. Not solely is the observe of filling out the identical data over and time and again senseless and time consuming for brand new recruits, however it additionally doesn’t make an excellent first impression of your service 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 strains dealer lifecycle from hiring to termination and each step alongside the best way. Due to its ongoing nature, managing compliance by hand may be significantly 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 among the main setbacks.
1. Lack of information visibility
As we’ve already established, onboarding new variable strains brokers requires accumulating knowledge from quite a few sources. From background checks to E&O insurance policies to verifying state insurance coverage licenses and FINRA registration, manually guaranteeing the data you obtain is correct and up-to-date may be fairly the problem.
In fact, you possibly can at all times simply ask the dealer to checklist all of the states they’ve ever been licensed in, however, the fact is, generally they don’t even know what’s up-to-date relating to their licensing.
2. Poor use of time and expertise
A scarcity of information visibility within the onboarding course of means somebody in your staff goes to be spending lots of time buried in heaps of paperwork simply to validate present licenses or safe appointments for a brand new distribution associate. Whereas some organizations depend on compliance groups to handle this, others search the data 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 backwards and forwards of attempting to trace down probably the most correct and up-to-date data. Not solely is that this irritating and time consuming, however it’s additionally a fairly poor use of your new recruits’ expertise. These people ought to give attention to constructing relationships and promoting merchandise, not occurring a wild goose chase simply to onboard.
3. Elevated probability of human error
When finding correct, up-to-date dealer data includes navigating between a number of totally different spreadsheets, paper information, on-line databases, and extra, the prospect of human error will increase considerably. Particularly when the info is being transferred from one supply to a different by hand.
It’s important that variable strains brokers preserve correct information because of the extra stage of oversight concerned in promoting variable life insurance coverage and variable annuity merchandise. However the actuality is, the extra human arms you’ve got touching your knowledge, the extra probably data will get ignored or entered incorrectly.
Improve knowledge visibility with a single supply of reality
Should you’re having hassle 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, think about a contemporary answer that may present real-time dealer data from a single supply of reality on the click on of a button.
By automated dually licensed communications, you may get rid of knowledge silos in your inside staff and guarantee your brokers have entry to real-time, correct data the primary time round.
Not solely can an automatic compliance administration answer 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 strains brokers might be a lot happier once they can spend much less time on knowledge assortment and extra time doing what they do finest.
Plus, with much less figurative and literal touches all through onboarding, you may relaxation assured you’re not rising your danger of human error or oversights. Discuss making the entire course of quite a bit smoother and extra environment friendly for everybody concerned!
Prioritize actionable knowledge all through your complete dealer lifecycle
Rising knowledge visibility within the variable strains dealer onboarding course of is simply one of many advantages of investing in an automatic compliance administration answer in your service or MGA/MGU. To make sure you’re shielded from dangers, ongoing compliance upkeep needs 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 service appointments. AgentSync Handle presents 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.
Should you’re prepared to extend your knowledge visibility and reduce your compliance danger with efficient, environment friendly, and ongoing compliance assist at each step of the dealer lifecycle, ebook a demo and learn the way AgentSync may help.
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