I believe there are some important points that should be addressed in response to the author's perspective of the life settlement industry ("Be your own life settlement broker," Accounting Today, Aug. 4-17, 2008, page 16).A provider's No. 1 objective is to have the least amount of competition possible on any policy that they're reviewing, so they can pay the least amount for that policy. The provider is representing the institutional buyer, and their responsibility is to protect that fund's rate of return on its portfolio.
On the other hand, when a life settlement broker is involved, the No. 1 responsibility is to promote competition, therefore maximizing the amount that the purchasing institution will actually pay for a policy. A life settlement broker sits on the same side of the table as the advisor and the policy owner. The duty of the broker is to the client, not to the purchasing institution.
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