LIMRA Survey Shows Independent Producers Struggle to Keep Up with Complicated Compliance Regulations

A recent report from LIMRA International reveals that over the past two years, almost one third of independent producers surveyed have let their Series 6 license expire.

Robert Kerzner, president and CEO of LIMRA, LOMA, and LL Global, said the report underscores the problems associated with complex compliance requirements.

“Producers are overwhelmed by the compliance function, yet all of the complexity is not giving clients a better understanding of the products they are buying, and we are continuing to lose qualified producers,” Kerzner observed.

The report, “Practice Management Support: Giving Producers What They Need,” stems from the most recent LIMRA Producers Panel survey. The study focused on producers’ use of technology, the impact of compliance, professional development opportunities, and the type of field support provided by their carriers and broker-dealers.

More than 80 percent of producers hold at least one FINRA license, but more and more they are dropping their Series 6 license because of the burdens of compliance regulations. Many producers who have let the license drop explained their decision this way: the volume of investment business did not justify the additional requirements or expense.

Among producers surveyed, half complained that adhering to the ever-complicated compliance requirements takes too much time and generally confuses their clients. In some cases, managers of producers in larger agencies said that they have added dedicated compliance personnel to their management staff. Fifty percent of producers said that their agency managers are responsible for the compliance—taking away their ability to perform their other duties. Twelve percent of producers’ agencies outsource compliance functions.

The survey also showed that 46 percent of affiliated agents receive information from their agency’s compliance officer, but only nine percent of independent producers report the same.

Half of all producers surveyed get their compliance information from broker-dealers. Among those, 60 percent rate the compliance information provided as excellent or very good.

Producers indicated they need more support through professional development. More than a third want to learn how to develop and implement formal sales and marketing programs. They also showed interest in learning how to use technology more effectively and their time more efficiently.

Overall, the survey showed that producers are challenged to find ways to increase productivity to offset the rising costs of doing business. They look to carriers and broker-dealers to provide more support to help them grow and remain profitable.