How can advisors remain relevant in a shifting environment?Article added by Jeff Reed on September 24, 2012
Jeff Reed

Jeff Reed

San Diego, CA

Joined: May 07, 2012

Insurance has become a commodity to most of the public in the transactional space, and the financial advisor is generally a much more trusted advisor in their eyes than the life agent. If perception is reality, how do we position ourselves going forward? Here are some strategies to consider if we want to remain relevant.

In a recent article, I discussed some of the changes that our industry is experiencing: a reduction in the number of agents, a shift away from the traditional life agent to financial advisors and changes in underwriting. Staying aware of trends like these that affect all of us is critical, but we need to go one step further and consider what we should be doing to position ourselves for continued success should these changes come to pass.

One of my readers commented that direct-to-consumer distribution (via the Internet, etc.) will never be as effective because the computer simply can't deal with the emotional aspects of the life insurance sale as well as a live person. While I agree with him in theory, perception is reality, and I think the change in public perception has already limited our ability to add value. Insurance has become a commodity to most of the public in the transactional space and the financial advisor is generally a much more trusted advisor in their eyes than the life agent.

So, if perception is reality, how do we position ourselves going forward? For the agent who is near the end of his or her career, I'm not sure I would do anything other than exit gracefully. That has historically been the plan for most agents.

But for those of us who still have a long career in front of us, that is obviously not an option. Here are some strategies to consider if we want to remain relevant:

Rather than resist the shift to the financial advisor, embrace it.

This can look any number of ways, but two that occur to me are obtaining the CFP designation, or aligning with CFPs as centers of influence, much in the way we have viewed CPAs historically. The public really has no idea what a "chartered life underwriter" is, nor do they care to learn. We have been out-marketed by the CFP organizations, and it's time to accept it. Maybe joining the local CFP chapter is a good first step.

Focus on double- or triple-duty dollars.

Much of the current product development is trending this way, and the public appears to be reacting positively to using life insurance to cover multiple needs, such as critical illness or long-term care.
Become easier to do business with.

I mentioned increased face amounts available without an exam based on alternative underwriting methodologies currently being studied in a previous article. I would be ready to offer a choice between convenience and price, and to identify products that offer the convenience without requiring additional expense.

Improve your marketing

I talk to a lot of producers. While some continue to have success doing it the old fashioned way via referral marketing, there are others who struggle to see enough people each and every week. Seminars that used to be packed are now lightly attended and unprofitable. Referrals are few and far between. Stay front of mind with your existing clients or target new prospects with a direct mail campaign.

Will any of these things be a silver bullet that solves all of our problems? Of course not. However, if we continue to do the same thing over and over, what can we expect but more of the same results? If your current results are what you want them to be, then congratulations! If not, let's talk about PlanB and get to work.
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