Marketing organizations scramble for value-addsArticle added by Brian Lucius on August 17, 2010
Brian Lucius

Brian Lucius

Shoreview, MN

Joined: March 18, 2009

It seems that 2010 is the year for marketing organizations to realize they have to actually provide value to stay in the game. Some are adapting well, some are scrambling, and some aren't even trying.

By no means does your marketing organization have an easy job. Many producers think marketing organizations just sit back and collect overrides. This is not the case. Marketing organizations, when initially started, were designed as product distributers. They first added services like case design, product updates, and other back-office support systems with the goal of freeing up more time for their producers to sell. Ultimately, this makes the producer more money, making the marketing organization more money through overrides.

Marketing organizations still offer that same service; however, they have also be forced to add sales systems, marketing reimbursement dollars, incentive trips, full-service creative design departments, broker/dealers, RIA support... the list seems to go on and on. More value-adds and dollars back in your pocket results slimmer margins for your marketing organization.

Today's advisors realize they can find product anywhere. What they truly need to get ahead is real business platforms and assistance with professional image creation. Gimmicky sales lines are a thing of the past.

However, marketing organizations need advice on how to handle the changing landscape, thus breeding a blind-leading-the-blind system which results in increased overhead and absurd advisor acquisition costs. In essence, you risk paying a price while your marketing organization practices.

Income planning is a big concern among today's boomers. So two years ago, we watched marketing organizations tout their "Income planning software that will change the way you sell!" or "Become the income planning specialist in your area." However, instead of investing real money and time into building something exclusive and proprietary for the advisor, most marketing organizations simply "rented" someone else's software and slapped their name on it. A band-aid positioned as a long-term solution.

The bar has been raised for marketing organizations, and you should take the time to find out who has actually risen for the occasion.

Now, investment advisor platforms and tax planning outlets are the focus. But again, be weary of the "me too" attitude. Rather, choose to partner with a marketing organization that has committed resources and holds a firm understanding of these foreign business models. The so-called experts under the guise of "why reinvent the wheel" cause problems for you as the advisor.

First and foremost: The only way you get really good at something is by doing it yourself. For example, when a marketing organization farms out these systems, it can be very hard for them to really understand how to work that system into the traditional annuity business.

Another common issue advisors are finding is lack of skin in the game from their marketing organization. If a marketing organization parts out an IAR program, what is their real interest in helping you build assets under management? And, it works the same for the RIA with who you registered. If you are a holistic advisor, you need a holistic marketing organization. Find the ones that own and operate their own full-service platforms.

Take your time, make several phone calls, and ask the marketing organizations the right questions.

1. What is your relationship with the company you have partnered with?
  • How did you establish your partnership or how did you come to know them? What background checks did you perform to ensure a safe partnership? (Beware: one IAR outfit in the past was being investigated for fraud. You don't need affiliations like this)
2. What is in this partnership for you?
  • Is their purpose is to help you write more business or just recruit more producers to increase their business?
3. How much money has your marketing organization put into this system?
  • The marketing organization should have to put some money behind it so they are more likely to understand it and make it work. They should have first-hand experience, and their reputation should be on the line.
4. Tell me how I can implement this into my business.
  • The marketing organization selling you this program should be able to go through any business model they pitch in detail. For investment advisors, ask them about account transferring, solicitor agreements, and how fees are collected. Do they truly understand it?
If you don't want to gather assets or add tax planning to your business but are still looking to expand the scope of your business, you certainly have choices. There are some great tools and ideas out there that can really bolster your business for the future. Simply, do your due diligence on all the value-adds that are offered.
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