Industry Trends

Help Your Clients Keep their Money with Custom Structured Settlement Plans


Industry

Nearly $6 billion in new structured settlements are issued each year – and many of the victims struggle to manage their settlements on their own. Industry statistics show that two-thirds of every case settled in cash or was referred to a bank, brokerage firm, financial planner or trust company.1 But within five years, 90 percent of claimants have nothing left of their settlements.2

Implementing a sound financial plan with the right combination of investments can prevent this from happening. However, many financial products have costs associated with them, and even though a physical injury recovery is tax-free, once invested, the gains are taxable. 

To better manage settlement proceeds, there are many good options to create a customized plan. Clients may want to consider mutual funds, managed accounts, annuities, life insurance, college plans or long-term care insurance. Some financial products have less risk and others offer guarantees to limit market loss and preserve principal. All of these products can be wrapped up inside trusts to protect the client and their loved ones. As advisors, our job is to offer sound advice about available options and help the client make the best possible decision.

What’s in it for Clients

  • Allows flexibility to access funds for unplanned needs
  • Provides appropriate investment risk as they seek higher returns
  • Diversifies settlement assets to reduce overall investment risk
  • Takes advantage of market changes

What’s in it for Advisors

  • Takes advantage of market changes to achieve greater returns
  • Generates a relationship-based, recurring revenue model that enhances your core practice
  • Creates new opportunities to serve client needs

 

Winning Strategy

When it comes to structured settlements, it’s important to explore the many options available. You should help your clients find a solution that preserves their settlement and allows for flexibility. 

 

About the Author

At Ash Brokerage, Steve Pilger helps you deliver the expertise and solutions needed for a comprehensive financial plan.Contact him at steve.pilger@ashbrokerage.com or (800) 589-3000 ext. 6828 to discuss a prospective structured settlement case.

 

 

1 “Structured Settlements Survey Report”, AIG (2008)

2"California Practice Guide: Personal Injury," The Rutter Group, Ltd. from Flahavan, Rea, Kelly & Tener, (TRG 1992) Ch. 4.

Structured Settlements