Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global, opened the 96th LIMRA annual conference by asking the more than 500 senior leaders from life insurance and financial services companies in the audience if the industry is “headed toward the abyss.”

In outlining the obstacles and opportunities facing insurance and financial services companies, Kerzner pointed to protracted low interest rates, intensified regulation and growing demand of investors and stakeholders as chief contributors to current challenges being faced by insurers.

“There are two things that have affected growth,” Kerzner said, “demographics and our regulatory environment. But there is hope—demographics are in our favor and the need for our products has never been greater as more consumers recognize the financial risks they face and the value our products provide.”

Kerzner told the group that regulators worldwide were examining fiduciary standards and, in many countries, banning commission-based advisors. Noting that these changes could have cataclysmic impact on the financial services industry, Kerzner offered Norway and Finland as examples of countries that have already banned commission-based advisors, and the United Kingdom, Australia and Netherlands as countries proposing the same. “I hope these regulators wait and see how these changes affect other markets before they act,” he said.

The fee-based advice discussion was not all doom and gloom, as Kerzner pointed to current U.S. demographics that reveal that 10,000 Baby Boomers turn 65 years old each day, yet four out of five Americans are saving less than 10 percent of their income for retirement.

Throughout all of this, opportunity still presents itself,” he said. “The reality is, advice still matters. People feel they need to have the facts in order to make the right decisions. It’s tough to get the right answers to all of financial planning questions just from the Internet.”

Stating that the current system is not driving enough growth, Kerzner emphasized the need for the industry to adopt a more consumer-centric model. “This will be a huge change for many companies,” he said. “We need to learn from other industries how to get in front of the customer in unique ways.”

The conference theme "Winning in the New Reality!" held as its focus sessions how industry leaders can address today’s unique challenges and steer their companies down a successful path.

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