This submit is a part of a sequence sponsored by AgentSync.
Managing compliance all through the producer licensing course of is advanced, particularly when it’s accomplished by hand and much more so when it includes managing variable traces brokers. Due to the securities facet of variable traces, compliance administration for people who promote these merchandise includes an further stage of oversight on prime of the already advanced state-based regulatory framework the insurance coverage business operates in.
Just like typical producers, on the subject of onboarding newly recruited variable traces brokers, compliance is a excessive precedence for any group attempting to keep away from regulatory errors and their related penalties. But, as a result of these brokers have to satisfy further necessities with the Financial Industry Regulatory Authority (FINRA), the onboarding course of includes a number of extra steps. Whether it’s accomplished manually or utilizing an automatic answer, the onboarding course of for variable traces brokers goes just a little one thing like this:
- Step 1: Collect 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: Verify state insurance coverage licenses in every line of enterprise and state the dealer will promote enterprise.
- Step 4: Verify the dealer’s Central Registration Depository quantity and guarantee they’ve a FINRA registration, have handed a Series 6 or Series 7 examination, and have established a relationship with a broker-dealer agency.
- Step 5: Make appointments in a way compliant with every state’s particular laws.
- Step 6: Verify annuity coaching for states that require it.
To get hold of 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 observe of filling out the identical data over and time and again senseless and time consuming for brand new recruits, nevertheless it 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 the complete variable traces dealer lifecycle from hiring to termination and each step alongside the way in which. Because of its ongoing nature, managing compliance by hand will 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 a few of the main setbacks.
1. Lack of knowledge visibility
As we’ve already established, onboarding new variable traces brokers requires gathering 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 data you obtain is correct and up-to-date will be fairly the problem.
Of course, you would all the time simply ask the dealer to listing all of the states they’ve ever been licensed in, however, the fact is, typically they don’t even know what’s up-to-date on the subject of their licensing.
2. Poor use of time and expertise
A scarcity of knowledge visibility within the onboarding course of means somebody in your staff goes to be spending a variety of time buried in heaps of paperwork simply to validate present licenses or safe appointments for a brand new distribution accomplice. While some organizations depend on compliance groups to handle this, others search the data straight from the horse’s mouth – their new recruits.
It’s secure to say that variable annuities brokers have sufficient on their plate with out the forwards and backwards of attempting to trace down probably the most correct and up-to-date data. Not solely is that this irritating and time consuming, nevertheless it’s additionally a reasonably poor use of your new recruits’ expertise. These people ought to deal with constructing relationships and promoting merchandise, not occurring a wild goose chase simply to onboard.
3. Increased probability of human error
When finding correct, up-to-date dealer data includes navigating between a number of completely different spreadsheets, paper recordsdata, on-line databases, and extra, the possibility of human error will increase considerably. Especially when the info is being transferred from one supply to a different by hand.
It’s important that variable traces brokers keep correct data as a result of further stage of oversight concerned in promoting variable life insurance coverage and variable annuity merchandise. But the fact is, the extra human palms you have got touching your knowledge, the extra possible data will get neglected or entered incorrectly.
Increase knowledge visibility with a single supply of reality
If you’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. Instead, 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.
Through automated dually licensed communications, you may get rid of 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 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 traces brokers shall 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. Talk about making the entire course of lots smoother and extra environment friendly for everybody concerned!
Prioritize actionable knowledge all through the complete dealer lifecycle
Increasing knowledge visibility within the variable traces dealer onboarding course of is simply one of many advantages of investing in an automatic compliance administration answer in your provider or MGA/MGU. To make sure you’re protected against dangers, ongoing compliance upkeep must be a precedence all through the 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 training necessities, and renew provider appointments. AgentSync Manage provides a consolidated view of dealer eligibility that unifies Financial Industry Regulatory Authority (FINRA) and National Insurance Producer Registry (NIPR) knowledge right into a single profile.
If you’re prepared to extend your knowledge visibility and reduce your compliance danger with efficient, environment friendly, and ongoing compliance help at each step of the dealer lifecycle, e-book a demo and learn how AgentSync might help.
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