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Category: Compliance · 5 min read

Your Most Important Asset Might Be Client Files

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on September 6, 2018

author profile photo

on September 6, 2018

Insurance Agent Writing Client Notes

After you’ve met with your client, discussed their future goals, submitted their applications and sent your thank-you note, it’s time to celebrate a job well-done. Right?

Almost. There’s one more step that’s perhaps less exciting, but just as important as building a successful relationship with your annuity or life insurance clients: Documenting the relationship in your client files. 

Maintaining incomplete, insufficient, or non-existent client files not only exposes financial professionals to potential regulatory fines, but could also result in lawsuits.

One way to help protect yourself and your insurance business is to keep detailed, easily accessible documentation for each of your clients so, if a carrier or regulator asks to see your files, you’re prepared.

Maintaining incomplete, insufficient, or non-existent client files not only exposes financial professionals to potential regulatory fines, but could also result in lawsuits. 

Seven Things to Keep in Each Client’s File 

Use this checklist to align your existing and future files with the industry-standard practices.   

  1. Emails and notes from any conversations with the client regarding the solicitation of the sale, the basis for your annuity or life insurance policy recommendations, and the issuance of the policy. This includes any follow-up client conversations that happen after the policy is issued. 
  2. Copies of any advertising or sales materials, including but not limited to brochures, seminar invitations and materials, and workbooks used during the sales process. 
  3. Suitability information that was used as the basis for your recommendation. 
  4. Any illustrations used during the sale of the product.
  5. All product recommendations you offered, including the product selection tool or method used, and all corresponding notes and paperwork used to make the recommendation. 
  6. Application for the product and any additional forms required by the carrier. 
  7. A signed delivery receipt, if applicable.

This list provides a great starting point, but it’s not an all-inclusive list. Since each carrier's requirements for client documentation can vary, you should check with each of your carriers regarding their specific requirements. You should also be familiar with the state regulations that apply to you.


The Devil is in the Details 

When it comes to documenting your discussions with clients, this idiom couldn’t be truer.

It’s critical to keep meticulous notes regarding client meetings—right down to the smallest detail.

Dates, times, client concerns, client goals, your suggestion—the better you document the discussions you have with clients, including any products you’ve discussed, the better off you may be. Think of it this way: “If there isn’t documentation, then it didn’t happen.” This perspective emphasizes the importance of keeping your client file detailed and current.

It’s critical to keep meticulous notes regarding client meetings—right down to the smallest detail.

How Long Should You Retain Documents? 

A general rule of thumb is to keep all active clients’ records throughout the duration of the policy, plus three years, and keep inactive clients’ records for three years after the date of becoming inactive. This allows you access should you need it during a regulatory audit. Again, carrier requirements and state regulations may vary regarding retention time frames, so be sure you are familiar with the retention periods that pertain to you.


Learn More About Documentation 

Brokers International can help you identify industry best practices for maintaining your client files and other paperwork, so your business remains compliant. Learn more about our Compliance Builder offerings by contacting our experienced staff today.

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Written By

Julie Wagner

Chief Compliance Officer

Julie Wagner is the Chief Compliance Officer for Brokers International. Julie has over 21 years of experience working for high-growth financial services companies within complex regulatory and operating environments. Julie has extensive qualifications and practice experience spanning regulatory, risk mitigation, HIPAA law, governance, privacy protection, compliance, audit and litigation.

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