Who died and made these “advisor advisors” King? How did they get to the controls of the business? What advice do you have to watch for more than ever?...
Here’s the truth. Investment advisor/financial planner practice management advice is just not universally applicable to all advisors. Yes, it’s taken over because the industry finally found a style that no longer embarrassed it and we set a style to match it. “Financial Planner/Investment Advisor” sounds so much better than “Life Insurance Agent” to so many people. We began to use the phrases interchangeably.
We also take far too much advice from people who never have, never would nor ever use it. But that’s a topic for another day.
Why is investment advisor advice killing performance? Because, while we may use the terms interchangeably, the businesses are, without question, very different. I’m not saying one is better than the other. They are just different.
Think about it. Rolex and Breitling both make good watches. But, if you had to fix one, you couldn’t use parts from the other. Both are good, just not the same.
So it is for “fixing” performance in one business over another. Not every bit of advice is transferable to the other. Some definitely is, but not all. This is where we are making the mistake.
And I’m talking particularly to the insurance-based financial advisors out there. Those people who are the very foundation of the whole business today. And also to those financial planner types who have started returning to their roots. Don’t pack all your latest advice for the return trip.
Here’s a taste of the advice that doesn’t work in the insurance business:
If you are an insurance advisor and think that all you can handle is 75 families, you are likely doomed to failure. Industry hero, Al Granum said years ago that unless you added 50 new pocketbooks per year you would suffer “premature retrogression” and fade away. Add 50 new, not have 50. We just need more business.
Insurance advisors can and must handle much more business each year than investment advisors claim they need. This is not a bad thing.
And don’t tell me that you can’t service that many clients, because you can. Insurance clients are nowhere near as high maintenance as investment clients. Or Group clients. Or Pension clients...
I’ve also had enough about how selling larger numbers is a “transaction business” versus a “relationship business”. The latter being dramatically better than the former. That’s also malarkey. You can do both if you do it right.
This is another area where today’s typical advice goes off track. Sure, if you create a high maintenance business, you have to service it. Insurance isn’t that way. Service standards are easier to maintain and even exceed. This is not to say that they are met either. But, like I said, advisors are confused.
Prospecting and promotion is a big concern too. Granum said that 60 % of your business time should be devoted to prospecting and promotion. Sixty percent! I think it’s worse than that today. It’s likely more than 70%, if you want to grow, that is. Who’s doing that today? No wonder productivity is diving.
We don’t usually spend that time as investment advisors. We are busy seeking out the rest of our clients’ assets. I note that even good IAs are ramping up their marketing today... And I bet that’s to add to their client roster too. It’s not just to exchange larger clients for lesser ones.
Your attitude is inversely related to the length of time since your last sale. You need to win all the time to keep your attitude up along with your sales. You just have to prospect in the insurance business if you want to succeed in a big way
Great sales professionals are like that.
Client segmentation strategies have also succumbed to this IA advice. That’s why we have A, B, C and D clients. Or A, AA and AAA clients... Honestly. This is nuts. Read my article in the latest MDRT “Round the Table’ magazine on this. They didn’t pick it up for nothing.
In the insurance business you just have clients and you treat them all the best way you can. Sure, some fire you and you fire some, but they should get your best. I think it can work the same for IAs too.
The whole industry would do a lot better to return to its practice management roots and pick up the pace. Taking the current route, is stalling far too many advisors and killing the business altogether.
I’m Jim Ruta and that’s just the way it is.
Well done Jim you are bang on for those people who want to specialize or at least be substanial insurance producers.