You will be able to walk a client through product documents, costs and conflicts so they could explain them to someone else.
Every representative has done it at least once. The meeting has gone well, the client is keen, and there is a thick folder of documents to get through. So you hand it over, point at the signature boxes, and say, "This is all the standard stuff, it's all in there if you want to read it later." The client signs. On paper, everything was disclosed. In practice, the client has no idea what is in the folder.
The documents are part of the advice, so go through them with the client instead of handing them over. You do not need to read every page aloud. You need to take the client to the pages that matter and explain what is on them.
For a life policy, the product summary and the benefit illustration are usually the core. Your firm and the insurer may require other documents too, such as a guide to buying the type of product, and your firm's process will set out what must be given and when. Follow it. Then, within those documents, pick out the parts that answer the client's real questions and show them where to find each one, so they can go back to it later.
Lesson 2.3, Clear, relevant and timely information, covered sending documents early enough to read. Walking through them in the meeting is the second half. Doing it properly means the client leaves knowing where the important parts are, rather than holding a folder they will put in a drawer.
Whatever the product, there are four things a client should be able to tell you before they buy.
What they pay. The premium, how often, for how long, and whether it can change. If premiums can be revised, say so, and explain what that means in plain words. For investment-linked policies, explain the charges that come out of the policy, not just the premium going in.
What they get. The benefit, in the situation it is meant for: "If Hafiz dies before the policy ends, the insurer pays this amount." Use their names and their situation, not the brochure's generic family.
What is not covered. The main exclusions and waiting periods, and any condition you know about from the fact-find that might be affected. This is the part most often skipped and most often behind a later complaint.
What it costs to stop early. What happens if they stop paying or cancel in year one, year three, year five. For policies with a cash value, show how the surrender value compares with total premiums paid in the early years, using the illustration. For pure protection, explain that there is usually nothing back, and that this is how that type of cover works.
Wei Ling uses these four as headings on a single page she fills in during the meeting with Hafiz and Nadia, in their words as far as possible. It takes ten minutes and saves a lot of explanation later.
Clients sometimes ask how you are paid. When they do, be open about it and follow your firm's disclosure process. Most clients ask because they want to know whether you have a reason to recommend one thing over another. A straight answer does more for trust than a vague one, and your firm will have rules on what to disclose and how.
You may also have conflicts the client would not think to ask about: a campaign on a particular product, or a target you are close to. Lesson 2.4, Complaints, conflicts and the habits that cause them, covered how those can bend a recommendation. The disclosure question is simpler. If something about how you are paid could reasonably affect what you recommend, the client should not have to guess at it.
A signature at the bottom of a disclosure form shows that the client signed. It does not show that they understood. The only real check is asking.
Ask open questions that need an answer in the client's words. "So if you decided to stop this in three years, what would happen?" "What's one thing this doesn't cover that you'd want to watch out for?" "If your premium went up next year, would that cause a problem?" Avoid questions that invite a yes: "Is that clear?" "Any questions?" Almost everyone says yes, or no, to be polite.
When an answer is wrong or vague, explain that part again, differently, and ask once more. Then write down the client's final answers in your notes. Nadia's answer to the early exit question, "We'd get nothing back, because it's just cover," goes straight into the file. That sentence is better evidence of disclosure than any signature.
Disclosure done this way takes time, but not as much as you might think. Most of the time goes on the four questions, and with practice you can cover the costs, exclusions and early exit terms of a typical product in a few minutes of plain speech, leaving time for the client's questions.
That plain speech is worth preparing. In the activity below you script your explanation of one product's costs, exclusions and early exit terms, short enough to deliver in under three minutes without reading from the brochure.
Script how you would explain one product's costs, exclusions and early exit terms in plain words in under three minutes.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).