By Maria Wood
A new LIMRA
survey has found that investment products and advisory solutions account for a growing portion of revenues for career and independent insurance agents (30 percent in 2012 versus 23 percent in 2004) as well as a larger percentage of gross revenues for investment-focused advisors (80 percent in 2012 compared to 75 percent in 2004).
Conducted in the spring and summer, the survey, compiled by LIMRA and McKinsey & Co., sampled some 2,000 experienced advisors (those with three or more years of tenure) across multiple distribution channels, including insurance companies, broker-dealers, banks and RIAs.
As for why investment products now represent a larger share of sales, the study theorizes that advisors now focus more on providing holistic solutions for clients.
An increasing percentage of advisors are teaming and partnering with their counterparts in an effort to boost productivity
by more than 30 percent. Forty-three percent specialize in a client segment, typically by affluence or occupation, and see that as way to increase productivity.
The LIMRA/McKinsey study also found that while most advisors have not provided their clients with formal retirement plans, those who have say they are 15 percent more productive. Knowledge of life events also correlates with higher productivity, but according to the survey, many advisors fail to leverage this information.
Other findings of the survey include:
- Doing more with less. Advisors are reducing the number of insurance carriers they do business with and place approximately 50 percent of their insurance with their top carrier. They frequently switch insurance carriers, due primarily to non-competitive products, concerns about carrier stability or poor service.
- Not well served. Although financial services organizations have boosted their services to affiliated advisors by 40 percent over the past 10 years, many say those services are not of value or are poorly delivered.
- Aging workforce. The majority of experienced advisors are over 50 and have more than 25 years of experience. Of those advisors who are within 10 years of retiring or selling their practices, more than half have no succession plan. Advisor satisfaction is significantly higher within all independent channels, with affiliated advisors more likely to leave their firms within the next three years.
- Growth opportunity, more than compensation, is the most important factor in advisors’ selection of a firm.
- Technology on tap. Advisors want to introduce new technologies into their practice, with the use of Skype/video technologies set to quadruple over the next four years while the use of social medial will more than double.
Originally published on LifeHealthPro.com