By Libbye A. Morris
According to LIMRA, only 13 percent of all new agents and advisors make it past their fourth year in the life insurance business. This does not bode well for newcomers to the industry—or the industry itself. So we set out to find out what it takes to not only survive but thrive during those critical four years.
Follow a systematic process
As we talked with veterans and newcomers alike, one suggestion that came up repeatedly is to follow your company’s guidelines or a systematic process and seek out strong training programs. This piece of advice was echoed by Robert Fakhimi, CLU, ChFC, CFP, who joined MassMutual in 2001 as a general agent. In his six years of managing the San Francisco Bay area agency, he has grown the organization to 82 advisors, with a four-year retention rate of 33 percent.
To prevent his advisors from experiencing the uncertain and lonely career start he had, Fakhimi requires all newcomers to follow a precise 90-day business and marketing plan. “We give them a 90-day calendar, and it outlines very specific activities,” Fakhimi explains. “It says that on Monday, you’ll be doing this, and on Tuesday you’ll do this, so that new advisors know exactly where to go, what activity to do and what test to take and pass. We want them to feel like they’re on a path, a track.”
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Whether you are a rookie or a veteran, stay ahead of your clients’ needs because today’s strategies may not work in tomorrow’s market. |
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And to make sure they stay on track, Fakhimi meets with all advisors once they have been in his agency for 30 days. In fact, when they are first hired, they are told they will have a personal review meeting with him in 30 days and what they are expected to know at that time.
Systems that outline and track new advisors’ activities are also an integral part of the culture in the agency of John T. Baier, CLU, ChFC, who has been with New York Life since 1970 and is now the managing partner of the company’s New Jersey general office. The business was much simpler when he started because there were fewer products to sell. “Like most people, I started with my natural market. The one thing I regret is I didn’t get a lot of referrals in the beginning, so when I ran out of my natural market, it was difficult,” he recalls. “Eventually I did find new prospects by buying leads and using personal observation, and then I began to build a referral base.”
Baier’s agency uses a 25-point system—a weekly focus plan that advisors follow—that is tied to their quarterly goals. Advisors get points based on different activities, including phone contacts, factfinding interviews, appointments, referrals and face-to-face contacts. (Checkout “Advanced 20-Point Day,” by NAIFA Past President Bob Nelson, for an example of a similar point-based system.)
The 25-point system has separated the successful advisors from those who don’t make it. “It’s simple,” says Baier, a Passaic-Bergen AIFA (N.J.) member. “The ones who make it follow the system to a tee. The ones who don’t make it are the ones who go outside the system and try to make it on their own.”
Get a mentor
Another tried-and-true path to success is to get a mentor. According to Shaun McDuffee, CLU, ChFC, AEP, with Austin-based North Star Consultants of Texas, mentoring is critical because it provides new advisors with a track to run on and success to emulate. When he entered the business in 1989, he was fortunate to have a highly capable mentor guide him. “I was mentored by an advisor, Chuck Housner, who had been our Rookie of the Year two years previously. I knew that if I did what he told me, I would be successful,” McDuffee recalls. “I met with him daily and bombarded him with silly questions. Despite the fact that I’m sure I annoyed him, he stuck with me and helped me role-play and penetrate my market. I credit Chuck with much of the success I have had because he taught me the value of hard work, targeted marketing and making sure that I always do the right thing when no one is looking.” McDuffee, a NAIFA-Austin member, is now a senior vice president at North Star Consultants and was recognized as the company’s Star Advisor of the Year from 2004 through 2006. He has also qualified for MDRT’s Top of the Table three times and Court of the Table six times.
Learn the power of positioning
But what if your agency or firm doesn’t have a structured mentoring program, or you are on your own? That’s not a problem, McDuffee says. Find a mentor yourself. “Seek out someone in your agency, company or the industry that you admire,” he advises new agents. “Offer to help him locate new prospects and position him. Senior people have all the skills they need to learn but typically have forgotten how to prospect. They tend to become comfortable. As a newer advisor, you bring energy, enthusiasm and, if taught, the ability to position the senior person. You can’t underestimate the power of positioning.”
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Having a niche market is one of the biggest factors in the success of these two agents. |
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In Baier’s agency, new agents are mentored by senior agents and are expected to qualify for MDRT by at least their third year in the business. That expectation raises the bar for new advisors’ performance and takes the guesswork out of what is expected of them.
Find your niche
Andrew Frazier and Mathew Hunnicutt are managing partners with Frazier Hunnicutt Financial in Portland. (They recently joined SII Investments Inc., an independent broker/dealer in the National Planning Holdings network, affiliated with Jackson National Life). Around the time they became agents, Frazier’s father died. “I began to see the difficulties my mother was having, being a widow,” says Frazier, a member of NAIFA-Portland. “Then we started getting referrals to other widows and divorced women, and we started holding workshops to educate these women about how to manage their money.”
Having a niche market is one of the biggest factors in the success of these two advisors. And now they have expanded that niche to include the gay and lesbian community.
| STARTING OUT RIGHT |
Your first task as a new advisor is to create a career-development and marketing plan. A truly comprehensive marketing plan will align your tactics with your longer-term strategy for marketing success. Your personal strategy should be reflected in your career-development plan. You should consider questions like where you want to be in two, five or 10 years, the type of clientele you wish to build and how much you want to earn.
Based on your answers, create a career-development timeline that will provide a strategic framework for future activities and a benchmark to measure your career progress.
Next, understand what you bring to the table that will make your clients want to use your services. We ask our advisors to write a biography that identifies their current positions, achievements and accomplishments.
Communicating your value
As rookie advisors acquire their first clients, we encourage them to write value-proposition letters, which are documents or brochures that identify their value as primary trusted advisors and summarize the reasons clients have hired them. These letters can be sent to current clients or handed out in packets at meetings.
Your initial successes—based on presenting a clear, compelling picture of what you have to offer—now need to be parlayed into a wider client base. You can use your initial earnings and reinvest them in the business.
You can also conduct client-mailing campaigns to nurture relationships within your existing client base. These campaigns may correspond with your current promotion or focus.
In addition, you can do mailings to cold prospects. List-brokerage services provide access to some of the best commercial lists available. Top vendors also offer consultations and will recommend which lists to use and how to employ them to best meet your marketing objectives.
John Selzer Jr., CFP, is managing director of Allmerica Financial in Chicago. You can reach him at jmselzer@afs.allmerica.com. Edward K. Garrison is a principal of Advanced Business Systems Consulting Group Inc., in Libertyville, Ill. Email him at garrison@absillinois.com.
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Make good use of NAIFA member benefits
As a newcomer to the industry, your NAIFA membership benefits are exactly what you need to succeed—you just have to take full advantage of them. For example, local and state association meetings offer great ways to make contacts, learn about new sales and prospecting ideas and how to become a community leader. The annual conference helps you develop your skills and allows you to interact with leading producers. And the Young Advisors Team provides you with skills training, a variety of tools that you can use to overcome the many challenges of being a newcomer and a wide range of discounts on many critical resources.
Network in your community
Networking in your community is also a sure-fire way to survive and thrive. This tactic helped Frazier and Hunnicutt gain a foothold in the Portland market. In 2004, the two agents and a local attorney established a networking group called the Young Professionals of Portland. Almost 2,000 young professionals have indicated an interest in YPOP’s social, educational and civic focus, and 200 to 300 people attend each activity.
When Frazier and Hunnicutt saw how eager young professionals in Portland were for meaningful networking opportunities, they co-founded the Young Professionals of America. “It’s not just about exposure. We are very committed to service, and this organization gives us an outlet to help the people in our community with organized public-service events,” says Hunnicutt, who also chairs the Young Professionals Committee for the Rotary Club of Portland.
Frazier sits on the Campaign Cabinet for the United Way, is active on the Domestic Violence Committee for the Rotary Club and is the membership chair for the University Club of Portland. “The community is what keeps us in business,” he says. “If we didn’t have folks in Portland with financial needs that we could service, we wouldn’t be here. So it’s extremely important for us to give back to the community.”
Hire an assistant
Because Frazier and Hunnicutt spend most of their time outside the office, they recently hired an assistant to help them with administrative and marketing tasks. They realize that some advisors may hesitate to make this type of investment, but, as Hunnicutt notes, “it takes money to make money. If you’re going to be in a business like this, in which you’re responsible for your own income, you will have to take a chance and be willing to get help so that you can grow your business.”
Anticipate your clients’ needs
Another strategy that will work well for you is to constantly anticipate your clients’ financial needs and wants. As McDuffee stresses, whether you are a rookie or a veteran, you should stay ahead of your clients’ needs because today’s techniques may not work in tomorrow’s market. He likens this challenge to the well-known strategy of hockey great Wayne Gretzky. “When asked how he was able to rewrite the record books, he said, ‘I skate to where the puck is going to be, not where it is,’” McDuffee says. “That is paramount in our industry. Figure out what your clients will need, and deliver more than you promise.”
Look to the future
Finally, Frazier and Hunnicutt encourage anyone who is struggling through his first four years to have a positive attitude and look forward to better times. “This hasn’t been easy,” Frazier concedes. “But we’re looking at our forecasts for this year, and this is a really exciting time for us. We’ve made a decision to go asset-based, and we entered this year with $60,000 in recurring revenue for the first time and new-business revenue projected at $250,000.” That’s quite an accomplishment for advisors who are only in their fifth year in the business.
Libbye Morris is a contributor to Advisor Today.
February 2007
Make It Personal
Effective Mentoring
The Killer Search Apps
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