RIAs and financial planners are ignoring billions of dollars sitting in their client's accounts. There are gems hidden in plain site that your clients will be thrilled for you to discover for them. Strangely, the invisible assets of which I speak are cleverly disguised as a liability.

I won't make you read all the way to the end to get to the secret. It is your clients' life insurance coverage. I fully realize that many financial advisors have never endeavored to focus on the other side of the balance sheet choosing instead to offload this responsibility to a specialist.

But once you understand the value of the opportunity and how it can translate to increased wallet share within your existing book, you'll want to take a closer look.

The number and amount of lapsed life insurance policies by U.S. seniors over age 65 is astounding: more than 250,000 policies with a combined face value of more than $57 billion are lapsed and surrendered back to life carriers each year. The average face value of those policies is approximately $225,000.

And that only includes universal and variable life policies that most people think are best-suited for life settlements. If term life is added, which often includes policies that are also attractive for life settlements, and ordinary life policies, the total exceeds $112 billion. http://www.lisa.org

Over time, the reasons why someone purchases life insurance coverage often change. For myriad potential causes, the coverage itself is no longer needed or the premium liability has become too burdensome on a senior client's budget. This liability is actually an asset that the RIA can monetize for the insured's benefit while increasing AUM.

A Senior Life Settlement, by definition, is a transaction where an insured sells his/her coverage and all rights appertaining to a third party in exchange for a one-time cash payment.

The selling insured monetizes their asset for an amount greater than the carrier will pay under a surrender arrangement and the new owner assumes the premium obligations and is entitled to receipt of the net death benefit.

As an RIA, taking the steps to educate your clients about this opportunity will undoubtedly showcase your acumen as a holistic planner and responsible steward of your clients' best interests. With this newfound ability to cement relationships and differentiate yourself from the "broker" persona, you have a real opportunity to do well by doing good.

At Capstone, we understand that learning the complexities of life insurance and the secondary market for policies may not be at the top of your list of how you want to spend your summer vacation. That is where the value in Capstone's consultancy can play a pivotal role in helping you deliver more value to your clients and grow your business.

The life settlement market has matured into a multi-billion dollar industry. Today's transactions are safe, secure, flexible and offer many advantages to both seller and buyer.

Life settlement transactions are highly regulated and routinely monitored by state insurance commissions operating under statute. Only reputable, licensed counter parties to a transaction may compliantly act in fiduciary capacity in a life settlement sale or purchase.

Of course, there is never a circumstance where any transaction is always the right thing to do. Here are a few examples of where a life settlement could be beneficial for your client:

• If a policy is underperforming, it deserves the same attention as any other asset under the advisor's oversight.
• If a client is financially strained by premium obligations, settlement will provide a greater degree of liquidity than surrender and most certainly a better option than a total loss from lapsing a policy.
• If a policy no longer makes sense because circumstances may have changed over time, the asset can be redeployed in a way that makes more sense for the insured.
• For some in dire need due to changes in health status, the capital produced from a settlement transaction may be utilized to defray long-term health care costs or help to redefine a client's retirement plans.

In the same way your family doctor may turn to a specialist for acute care, Capstone stands at the ready to help you navigate these unfamiliar waters with you.

There are many compelling reasons to thoroughly review your clients' life insurance coverage. As a financial professional, the care and concern you show for your clients' best interests demonstrates your unwavering commitment to their financial well-being. And, it is a very constructive way to uncover hidden value to grow your practice.

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