Reading Time: 6 minutesUnder the new, proposed DOL rule, you and other independent agents will be deemed fiduciaries. Yes, it’s a big change, but will it really shift the “big debate” around agents vs. fiduciary, fee-only advisors? I’m not 100% sold that it will.
Many financial professionals selling fixed-type annuities are fiduciary advisors, but most annuity agents haven’t gone down that road. Still, I see some agents marketing themselves as “advisors” or something beyond the realm of insurance.
No wonder why. Countless media articles out there talk about how consumers MUST work with a fiduciary, fee-only financial advisor in every circumstance. Many agents get defensive when someone asks them about being a fiduciary or implies they are somehow inferior to such an advisor.
Don’t get me wrong. There is a big need for that sort of financial advice in America. But that advice tends to focus more on investments, not insurance. Those firms also don’t have the unique expertise that you have as an agent, and what’s more, there is a sizable demand for your knowledge of insurance products.
Not sure about what I mean? Well, what about the huge, growing public need for financial protection? For folks having a strong financial foundation in their post-career years? Tens of millions of people are underinsured or have no game plan for how they will generate enough reliable income in retirement.
And those advisory shops that offer little to no annuities and life insurance? They don’t know the products, their uses, or how to set them up for proper protection as you, the independent agent, do. Your knowledge and experience fill a huge, much-needed gap. Let’s talk more about why that matters.
A Changing Industry
My team talks to hundreds of agents and advisors each year. Based on that feedback, deep down, I think that many agents aren’t quite happy with their business – and maybe also with how the public sees them. It’s sad. The life insurance profession used to be more respected.
This is my opinion, as I have watched our space for over 20 years. But as annuity/life product distribution has grown and evolved, among other drivers, lining one’s pockets somehow became a bigger priority in our sales. Living out core values which bring our business dignity and meaning? That seems to have taken more of a backstage.
Let’s be clear. I’m not saying that profiteering is the driving force of annuity and insurance sales, just that it seems to be more noticeable (to me) than what it used to be. That doesn’t always end up in the best outcomes for our clients and for agents’ practices.
Now, some independent groups seem fairly focused on pushing their reps to pedal as much premium into their pet carriers over providing custom-tailored client solutions. If you need an idea of what I mean, you know of the IMOs that push their “proprietary product” or an exclusive carrier on you over, and over, and over again, via emails and marketer phone calls.
The Calm in the Storm
Now, let’s go back to the purpose of our business. Think about the financial dignity and comfort that you bring to families. No matter what the naysayers go on about, no other profession in financial services can do what you do.
To the widow when you deliver a death benefit claim check and give her financial peace of mind when all else is bleak. To the couple who will spend decades in retirement, after years of hard work, and who worries about running out of money more than death or public speaking. To the father whose disability coverage will save his family from financial ruin, because he had a nasty accident at work and can’t work for the next six months…
Your specialty in protection brings a peace of mind that very few other professions can. But the focus on ‘always be closing’ over helping people has warped how the public sees us, and it’s time for that to change.
Regaining Public Trust and Confidence?
The insurance industry was a major source of retirement financial protection for Main Street America. In the mid-1900s, TV programs featured family members who were life insurance agents and respectable parts of society. Insurance products made up a bulk of U.S. household wealth. Group annuities were widely used for corporate pension plans. Life insurance policies and other protection products were held by many middle-income American families.
Of course, family roles as well as other financial and social norms have changed since then. The need for financial protection has also gone up and isn’t going away. So, here is the key question. What can you, and all of us, do to regain consumer trust and help elevate public confidence in our business?
Back in the Driver’s Seat
First, reclaim your independence. The IMO doesn’t have all the answers for your business, and sometimes they push sales agendas on you that aren’t immediately clear. Changing regulations, such as the DOL fiduciary rule, and rapid industry consolidation aren’t necessarily making any of this easier, either.
Back in 2017, when industry consolidation of IMOs was picking up, the Obama-era DOL fiduciary rule was making waves. Certain big IMOs started calling agents and telling them that they had to get their Series 65 license to sell qualified annuities AND get contracted with their IMO. Otherwise, the agent’s business would be dead on arrival when the then-fiduciary rule went into full effect. I couldn’t tell you how many hundreds of agents and advisors that we heard this story from.
Sure, there are advantages to running a full-service advisory firm as a financial professional with a Series 65 license, but it also comes with demanding requirements, such as more compliance headaches. What if you had wanted to just remain an annuity or life agent? In hindsight, we now know that the recruiting push toward Series 65 licensing and big IMO contracting wasn’t accurate. Who knows what these recruiting tactics might look like as our industry evolves?
You are the owner and CEO of your business. You know the clients whom you serve and what they need. If your IMO or other companies that partner in your business recommend something that doesn’t align with your goals or values, you can question it. New products, marketing programs, financial planning software, sales concepts, whatever – they need to make sense for your business, and whoever is making these suggestions should be able to justify them to you.
Your Value as an Agent
Secondly, own your identity as an insurance agent. Protection is your wheelhouse, and that is a legacy that spans hundreds of years of economic history. But also be public and bold in your financial specialty. And work at being the best that you can be in that space.
It’s cliched, but the “riches are in the niches.” Every annuity agent is aiming to serve consumers of near-retirement and retirement age. Great. Let’s narrow it down further from there. Who is best served by your knowledge and expertise?
Federal government employees with their benefits? Pilots at a major airline employer in your area with corporate pensions? Owners of small- and mid-sized businesses that are counting on a lucrative exit to finance their retirement? Corporate directors and executives with hard-to-understand benefits?
If not that, then what about other demographics for retirees? Widows? Divorced individuals heading into retirement?
Grow Your Marketing Reach
Once you have your niche, get to building your brand and a compelling online presence up and running. Then turn up the volume on your “megaphone” – start creating consistent content for prospective clients to see what you are about. When done right, your content will attract prospects that fit your ideal client and repel those that aren’t. Keeping it simple, someone in their mid-50s might be a good candidate for an FIA since retirement is around the corner, and another saver in their 30s and with an aggressive risk tolerance wouldn’t be a great fit (perhaps at all).
Over time, as your brand grows, your referrals will grow and more people will learn of your business in different ways, as all of your marketing efforts snowball. You can also lean into association with big national brands that align with your own agent identity and client focus so that your efforts are well-complemented.
At SafeMoney.com, we have built a national brand that consistently attracts prospects that are safety-minded and gives a powerful first impression. You have an opportunity to plug into our national brand without any contracting or business requirements. If you wish to go to the next level, you can also develop your own brand and reputation as an elite agent in your local markets if you choose to work with my IMO. (Shameless plug, I know.)
Building Up Clients and Community
Finally, do good for your clients and your community. The reputation gains start locally, and they build over time.
Have thorough conversations with your prospects about their hopes, dreams, and worries for the future, and find the best solution for their situation. Many successful producers whom we have helped build their practice or whom I have spoken with put their clients’ needs ahead of their business, including in their recommendations. They find ways to communicate that to their prospects. Ex: “I have two possible annuities for you here, and #1 is better because of this reason, even though #2 offers more comp for my business.” Your clients will appreciate the difference. Find ways to give back to your community with organizations or causes that are meaningful to you, and then be public about how you support them.
High-quality agents also don’t shy away from how they are paid. You give consumers of all backgrounds, especially working-class individuals, a powerful value in how you receive your compensation from the insurance company. No one should expect you not to be paid for your hard work and putting together a plan with guarantees for your client relationships.
We are in the business of relationships. Strong relationships are built on mutual trust and respect. While the life insurance profession might have an image problem, it doesn’t have to be so.
We have a great legacy to build on. Our clients are counting on us. Let’s give them our best, make our work matter, and leave behind a proud, caring, and competitive industry to those who will come after us.