When I began a career in life insurance sales 14 years ago, I was immediately exposed to the One-Card System (OCS) and its accompanying text “Building a Life Insurance Clientele.” This system and philosophy, masterminded by insurance industry legend O. Alfred Granum, was the lifeblood of many general agency systems. For the first few years of my career, its basic tenets were the foundation of my business practice.
A couple of years ago, I changed my operation from pure insurance sales to a comprehensive financial planning and wealth management focus. Recently, I had the chance to reflect on some of the core tenets of Granum’s philosophy and how they can be successfully applied to building a comprehensive financial planning type of business.
In the text, Granum highlights four major rewards from a career in life insurance sales:
- Financial potential
- An opportunity to truly help people in a significant way
- Intellectual stimulation
Certainly these benefits are available from a career in financial planning. An even higher level of independence is available from financial planning as one begins to recognize predictable, recurring revenue from asset, management fees as a significant revenue source.
The ideal comprehensive financial planning practice is built with only 60 to 100 client families.
The concepts of “making the individual a client by listening to, and focusing on his or her needs” and “the quality of the relationship being the key to retaining the client” apply to financial planning and life insurance sales. Also, Granum’s observation that “the profit is in the relationship, not in the sale” accurately describes the core belief of a high-quality financial planner or insurance agent.
The OCS definition of a client is where we begin to see a noticeable difference when compared to financial planning. Rather than “a premium paying entity which develops an ongoing relationship with an agent,” a financial planner will define a client as “a family that, pursuant to a comprehensive financial plan, turns over all of their assets and finances for us to manage, including insurance and investment programs.” With this expanded definition, we are broadening the role we propose to play in the client’s life from being a primary insurance advisor to a total financial advisor. Also, the “magnificent obsession” Granum refers to (obtaining 1,000 clients) will be significantly adjusted downward because the ideal comprehensive planning practice is built with only 60 to 100 client families. It is not possible to develop and maintain the depth of relationships we seek as advisors with 1,000 family clients.
Certainly, the “point system” of the OCS that helps keep agents accountable for their level of activity when developing a business can be very useful in building up a financial planning model as well. Again, we should slightly modify the definition of a “closing interview.” While the OCS frames this meeting as “an attempt to sell a life insurance policy,” the planner should view it as an opportunity to “communicate a comprehensive strategy that allows the client to consider him as the primary financial consultant to this family—the personal CFO if you will.
The actual system, which includes items such as a file box, success manual and yellow 3x5 prospect cards, etc. (all available from National Underwriter) is designed to help us “record and manage contacts.” This system is as good as any system I have seen in keeping one accountable while building any type of financial practice.
Granum’s concept of “least acceptable suspect” certainly applies to prospecting for financial planning clients. In this regard, the planner must also be very conscientious of minimum investable assets, as this is the key to a profitable financial planning practice.
With respect to the sales approach, Granum’s observation that “the top producer brings to every interview an extreme sense of urgency” does not equally apply to the dynamics of planning. When the goal is to manage all aspects of a client’s finances, the client must dictate the pace. If we force anything on the client, we will have a very small chance of gaining the level of trust that is required to manage all of his finances.
Lastly, the “6-3 prospecting and promotion” strategy, which is a step-by-step system for obtaining referrals, has no place in a planner’s repertoire because we should not have to “press” for referrals. If you leave a great restaurant, the maitre’d is not typically waiting at the door and grilling you for names of people to call on. If the experience is great, you will naturally tell other people. Similarly, if you offer a great financial planning experience—which is totally client focused, reflects the client’s deepest goals and dreams and unfolds at a pace that he is comfortable with—he will voluntarily introduce people to you.
Evan M. Levine, CLU, ChFC, is a financial planner and investment advisor representative with MML Investors Services, Inc. You may reach him at 212-536-6087 or send an email to firstname.lastname@example.org.