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Compensation

Who gets paid when you refer a client.

When a policy is placed, the insurance carrier pays Aligned Path Insurance Solutions a standard commission out of the premium the client pays. The referring advisor earns no insurance commission. Neither the advisor's firm nor the client pays Aligned Path a separate fee for shopping, placing, or servicing the coverage.

That is the entire arrangement. Advisors ask because the answer is usually vague, and it should not have to be.

The money, in the order it moves.

  1. 01

    You introduce the client

    Your firm invoices nothing and receives nothing for the introduction. There is no referral fee in either direction and no revenue sharing arrangement to disclose.

  2. 02

    We shop the market and make a recommendation

    Quoting, underwriting coordination, and delivery happen at no charge to you or the client, whether or not anything is ever placed.

  3. 03

    The client decides, including deciding against coverage

    If the existing policy is adequate, that is the recommendation. Nothing is billed for the review that ends there.

  4. 04

    If a policy is placed, the carrier pays us

    The commission comes out of the premium the client pays the insurer. It is not added on top, and it does not appear as a line item on anything you send your client.

Your client does not pay extra for the help.

Commission on an individually underwritten life or disability policy is built into the premium the carrier files with state insurance departments. It is not a markup that a broker adds and a direct purchase avoids. A client who applies to the same carrier for the same contract without us pays that same premium, and no one shops the alternatives or manages the underwriting file.

One exception is worth naming. Some carriers market a separate direct-to-consumer product line with its own pricing and its own underwriting. Those are different contracts. Comparing one to a brokered policy is a product comparison, not evidence that the brokered version carries a surcharge.

What this removes, and what it does not.

The conflict a fee-only advisor is usually worried about is their own. Referring the case out resolves it completely. Your compensation does not move based on whether the client buys, what they buy, or how large the policy is, so the recommendation you make inside the plan stays clean.

Ours does not disappear. Commission varies by product and by carrier. A permanent policy generally pays substantially more than a term policy at the same face amount, and a larger policy pays more than a smaller one. That is a genuine incentive, and describing the arrangement as conflict-free would be untrue.

What we can show you is how we hold it in check. Recommendations come as one option with the reasoning attached rather than a menu arranged to make the expensive choice look reasonable. Existing coverage that works is left alone. The carriers we will and will not place business through are published rather than described, and you see the recommendation your client sees.

Commission is shaped differently by line.

Life, disability, and long-term care commissions are typically front-loaded. Most of the compensation arrives in the first policy year, with smaller renewal amounts in the years after. That shape is why replacement deserves scrutiny: moving a client from one policy to a similar one restarts first-year compensation, which is exactly the transaction that should have to justify itself.

Home, auto, umbrella, and commercial lines usually work as a percentage of premium paid in every year the policy renews, so the incentive is flatter and points toward keeping a client well serviced rather than toward writing something new. Annuity compensation varies widely enough by product type that it is worth asking about case by case.

Exact schedules differ by carrier, product, and state, and they change. If a specific case turns on the number, ask and we will give you the number for that case.

Questions compliance asks first.

Who gets paid when a fee-only advisor refers a client for insurance?
The insurance carrier pays Aligned Path a standard commission, and only if a policy is actually placed. The referring advisor earns no insurance commission. Aligned Path charges neither the advisor's firm nor the client a fee for shopping, placing, or servicing the coverage.
Does the advisor's firm pay Aligned Path anything?
No. There is no engagement fee, retainer, platform fee, or per-case charge. An advisor can send a case that goes nowhere and owe nothing.
Does buying through a broker cost the client more?
Not for the same policy from the same carrier. Individually underwritten life and disability rates are filed with state insurance departments, and the commission is paid out of that filed premium rather than added to it. Some carriers do sell separate direct-to-consumer products at different prices, but those are different contracts rather than the same policy at a discount.
Does referring the case out remove every conflict of interest?
No, and it would be inaccurate to say so. It removes the referring advisor's compensation conflict entirely, because the advisor's pay does not change based on what the client buys. Aligned Path is still paid more on some products than others, which is a real conflict that has to be managed rather than claimed away.
What happens if the client should not buy anything?
The review ends with that recommendation and no one is billed. Keeping existing coverage is a normal outcome, and an advisor who never sees that outcome from a brokerage should treat it as a warning sign.

Anything here your compliance team would want in writing?

Ask and you will have it in an email you can forward, usually within two business days.

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