Echo Huang, president and founder of Echo Wealth Management in Plymouth, Minnesota, says insurance is an important component of wealth management. If the plan reveals that clients need a specific type of insurance, such as life, disability or long-term care, Huang gives them the option of purchasing it through her.
"I still maintain my insurance license and disclose to clients that I receive some commissions from the insurance companies, and they are not required to use my insurance service to become my client," she says.
Huang keeps her insurance license to simplify client finances and provide ongoing reviews. "I believe I can do a better job for them than an insurance agent who doesn't know their entire financial picture and specific goals," she says. "Clients know that the commissions are paid to other insurance agents if they buy the same products from other agents."
Huang uses the fiduciary standard as the benchmark for a client's best interests.
"If a client needs an annuity for its tax-deferred or lifetime income benefits, then the right annuity can serve that purpose, and it's OK to reduce the assets in their investment accounts," she says. "In addition, using a cash-flow-based planning tool to show them the exact impact can help them make the best decisions. I generally recommend commission-free annuities, if possible, to lower the costs for clients."