While many life insurance agents define themselves as life insurance agents, they will not prosper in the coming years because they define themselves too narrowly. You must enter the complete arena of financial services and prosper. Clients do not buy products from you and they don’t even understand what they buy from you. They buy because they trust you. And if they trust you, why are you content to only sell an annuity or life policy when their serious money, their $500,000, is sitting over at the securities firm?
For years you have allowed the big securities firms to make money from your clients’ investment portfolios, while you have chipped away with a variable annuity here and there or the sale of some mutual funds. But you never get the big money because you keep defining yourself as the life agent while the other guy, the stockbroker, gets the investment business (fortunately, most stockbrokers have left the insurance business on the table for you to get). The stockbroker long ago defined himself as a financial advisor and started looking at the client’s entire picture. The best brokers are also doing the insurance business.
These total-picture producers realize one thing that most producers don’t. Whether the product is insurance or investments, it’s all the same. It’s all about getting a check from the client in return for a future benefit. What’s the difference if the client’s money is going into the general account of the insurance company (a bond portfolio) or you are selling the client a bond mutual fund or a managed bond account? In both cases, the client has given you a check in order to be better off financially. So it’s nonsensical to think that you don’t know anything or don’t know enough about investments. Haven’t you sold a future benefit in return for a check hundreds of times? Maybe you don’t know the simple details on how to present investment ideas, but that’s no reason to shut off the huge potential in that arena. I’ll show you a formula for attracting your client’s serious money.
“But I really don’t know much about investments or the stock market!” you exclaim. You don’t need to. Your job is to capitalize on the relationship and use others to manage the investments.
In fact, to position yourself the best way, I recommend that you do not use mutual funds, but rather, individually managed accounts for your clients. If you sell mutual funds, you have sold your client a “black box product” and he knows it. You are nothing more than a product salesman because such a sale does not promote an ongoing relationship. If you sell your client an individually managed account, where he gets regular statements and sees the transactions in his own account, you have sold your client a service. And even though he knows you do not manage the money, he is now engaged with you in the “process” of money management. You now have a client engaged in a continuous relationship, not just another customer.
It’s this process that most life salespeople miss. Their transactions are often one time sales and no real relationship is formed. What you need is an ongoing relationship with continuous contact with the client and continuous feedback.
It’s easier to attract investment dollars in these uncertain times. Why? Because it is during these financially difficult times in particular that tired investors begin to shop around for advice alternatives or perhaps for professional advice in general. Their investments may be stagnant and/or suffering as a result of a slumping economy and they may be tired of their advisor who continually changes course when he gets nervous. He has become weary of the “great stocks” his securities broker recommended.
There are three choices you have regarding the management of the money and maintaining ongoing client relationships and fees:
1. You can become a Registered Investment Advisor and manage the money yourself (without knowing anything about the stock market as you shall learn). To become an RIA, in most states, you may need to take one or two FINRA exams and then pay a fee to the State (with most FINRA exams, you can take a crash course for a few days and then take the exam).
Then, after you obtain an RIA certificate, you have a license to charge fees to manage investments. How will you know how to invest the client’s money? You can use many of the winning mechanical systems that you can get for free or little expense: the Dow Dividend Strategy (www.dogsofthedow.com), the model portfolios maintained by Standard & Poor’s (www.personalwealth.com), the Value Line System (www.valueline.com). There are many such systems that provide you everything you need to know and you just follow. You do not need to know one stock from another and these systems have excellent track records. You just buy and sell when these systems tell you to. You do not need to have some large securities firm telling you what to do because in most cases, their track record is not so good!
2. Alternatively, you send the client funds to a professional money manager such as SEI, Lockwood, or Assante (many others also have very good systems) that will supply you with the sales script and the presentation materials. You will also need to become an RIA for this option. The professional money manager will manage the money.
3. Option three does not require that you file as an RIA. You can sign on with an existing RIA who will manage the money. You sign on as a “solicitor,” a status that does not require any tests or licenses in most states. You can be raising money and collecting ongoing fees next week!
If you want to make more money from your existing clients, turn your customers into fee-paying clients and have more to offer your prospects. The more you solidify the relationship, the longer you retain clients and the more business they do with you. Stop thinking of yourself as a life insurance agent and realize there is plenty more business to do with clients and prospects.
Read more about how easy it is on how to become a wealth manager.
“I have used [Brokerville] for over a year and have had some very successful appointments as a result. Following a simple program of mailing the requested material and following up with a non-invasive phone call often leads to an appointment. From numerous sales, one over $1,000,000, I have picked up over $2,000,000 of new money from these prospects. Most importantly I am in position to provide financial services for a good number of new clients for years to come. Brokerville is easy to work and very supportive in providing help when needed. I highly recommend you give it a try.”