July 17, 2007

How Accountants Feel About Insured Tax Strategies

Americans like to make money; Canadians like to audit it. I know no other country where accountants have a higher social and moral status. --- Northrop Frye
In financial services, accountants are the most trusted financial advisors. In today's specialized world, few accountants understand the many creative ways that life insurance can be used to reduce the financial risks --- including overpaying taxes. So our proposals don't get endorsed. Our clients (and theirs) lose.

Here are thoughts from recent discussions with accountants.

What Accountants Say
At 13 letters, 'life insurance' is the longest 4-letter word. There are many negative connotations. Since advisors are paid on commission, there's automatic skepticism about the solutions. Whose best interest is being served?

Accountants see themselves as professionals. They worked hard to get their accreditation. They want to deal with other professionals. Advisors who lack credible designations (e.g., CFP or CLU) face tougher challenges.
His card says 'executive' but it mumbles 'just a salesman'.
--- Jane Siberry, Extra Executives
When the words 'tax' and 'insurance' are used in the same sentence, the client's turn to their accountants for advice.
My money goes to my agent, then to my accountant and from him to the tax man. --- Glenda Jackson (actress)
Clients want aggressive recommendations. Accountants acknowledge this. But they're busy and learning about insured tax strategies takes time.

As we know from Investing 101, with risk comes reward. When asked to endorse insurance strategies, accountants face risk but where is their reward? So what is their incentive for taking the risk?

The Result
For insurance tax strategies --- directly or indirectly --- accountants often find it's safer and easier to say "no". Which is what their clients probably expected.

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