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I’m Successful. So Why Change?

Because if you don’t, you may have trouble catching up later.

By Donald Ray Haas, CLU, ChFC, CFP, MSFS

Last fall, I conducted “Applied Financial Planning,” a professional continuing education workshop in eight large cities from coast to coast. In almost every venue, at least one attendee asked, “Why should I transition my successful practice from insurance to financial advising and risk messing it up?” Since I thought this was an excellent question, it warrants further discussion here.

While making such a transition may prove to be prudent for many insurance professionals in today’s highly competitive financial services arena, it’s not the right practice strategy for everybody. Read on, however, and you might just be surprised at how the following considerations could very well apply to your current career path.

In each of the workshops, I informally surveyed the participants, many of whom consider themselves insurance professionals. The questions I asked were about current and anticipated sources of income. The table below reveals that those respondents who now receive commissions as their sole compensation source expect the number of their group to drop by about 20 percent in the future. On the other hand, the respondents who charge fees as their sole compensation source see their group doubling in the future. As for those receiving a salary, they expect to see a 25 percent future decline in their group.

Of course, this unscientific survey sample does not constitute an industrywide trend, but the results raised my eyebrows, and it is worth your consideration.

In the November 2000 issue of the Journal of Financial Service Professionals, Francis H. Schott, Ph.D., wrote an excellent article, titled, “Toward Financial Services: Life Insurance at the Turn of the Millennium.” This article provides information on how insurance products have changed each decade since the 1960s. Schott states: “’the life insurance industry’s transition, while perhaps slow in coming, is now in full swing.”

The Journal’s November 2000 issue also contains a noteworthy article by Advisor Today author Frank C. Bearden, CLU, ChFC, MSM. In the final section of his article, “The Fee-Based Advisor/Client Relationship,” Bearden takes a look at the profession’s future and states the following:

  • “Keeping the public trust involves practical matters, such as being willing to do planning without product implementation.”
  • “There is a trend toward reducing the sales load on products, which facilitates charging a fee for product search, recommendations and procurement.”
  • “The public’s growing comfort with use of the Internet has heralded fee-based advising that can be done online.” This author (Bearden) believes “that the deeply personal and analytical nature of financial advising will encourage the majority of potential clients to seek personal counsel.”
  • “Progress in both the regulatory and credential areas promises to herald in the solidification of a profession that can truly help the consumer with all areas of his or her finances.”

If you don’t change business practices now—even before it seems perfect to do so, you may later have difficulty catching up.

Every business moves through a cycle. When a business is at its peak, all is comfortable and profitable. At this point, the business practitioner feels that business couldn’t be better and avoids changing the status quo for fear of messing things up. Note the word “peak,” however, which indicates the next direction is downhill. And, in business, this cyclical pattern often prevails. Unless, of course, your business has leveled off for a short period of time—but in our fast-changing society, this “leveling off” doesn’t last that long.

It’s important to reinvent your business before it reaches this peak in order to ensure continued success. The past may have been wonderful, but it’s over.

I maintain that the traditional life insurance business is now far over-the-hill, and thus warrants reinvention. Life insurance companies are aware of this and are attempting to reinvent the business. However, many life insurance agents are uninformed or have chosen to pretend that the old way of doing business will go on forever (or at least for the rest of their career). Maybe they are right, but I believe their career high may end a lot sooner than they realize.

A word of caution: One size does not fit all in this industry. While there are still a lot of highly compensated, commission-based life insurance agents out there who can effectively argue that transitioning their business doesn’t make sense, a large number of life insurance agents have already reached their peak and need to reinvent their business.

Transitioning to a financial consulting practice is not the only form of business reinvention, but it is certainly a predominant trend in the financial services industry.

Frasier, the popular TV doc, often tells his radio show callers, “I’m listening!” And so am I. Send an email message to and tell me about your evolving business practice. I also welcome your topic ideas for future “Making the Transition” columns.

Donald Ray Haas, CLU, ChFC, CFP, MSFS, has been an insurance agent and financial consultant for 45 years. He is the author of Financial Planning For The Baby Boomer Client (National Underwriter). He can be reached at 248-213-0101 or at


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