However history records the current economic decline and financial crisis, the personal stories of winners and losers will rest just below the surface. The travails of the many (the unemployed, the foreclosed, the bankrupted) will contrast with the triumphs of the few -- those who saw potential among the ruins and seized it for great gain.
Insurance producers may find one such opportunity right around the corner, in that friendly, unpretentious community bank they walk past every day. Michael S. Weisman, CFP, an insurance-based financial planner in St. Louis, suggests producers start looking at these banks as allies rather than competitors, and tap into a rich vein of prospects they might never reach otherwise.
"Banks, more than ever now, are looking for fee income," Michael says. "This is a great time to approach community banks. My message to agents is, find a local bank, or a bank and trust company, knock on their door and offer your
services."
That's what Michael and his late father, Paul, did nearly 25 years ago when Michael began his career as a producer with a homecoming of sorts. He had earned a business degree, majoring in insurance, from Arizona State, and then spent four years in Atlanta working for Computone Systems. In 1984, after Michael came home to St. Louis and his father's agency, they created a joint-services model, offering insurance and securities products to the customers of Missouri Savings & Loan Association through its 14 branch offices.
The alliance proved to be way ahead of its time; federal law finally removed the barriers between banks and insurance companies for cross-ownership and collaboration with the Gramm-Leach-Bliley Financial Modernization Act of 1999. Unfortunately, the Weismans had to give up the Missouri Savings relationship in 1989 when the thrift folded in the savings & loan industry collapse.
The whole effort probably would have been no more than a footnote in Michael's career, were it not for the convergence of friendship and entrepreneurship 14 years later. By March 2003, Michael had built his own planning firm, Polaris Financial Strategies, into a strong independent practice offering life and health insurance, annuities, retirement planning, business insurance and securities to high-net-worth clients throughout the St. Louis metropolitan area.
He was deeply involved in the field advisory councils of his primary life insurance carrier, GenAmerica Financial, and his broker-dealer, Walnut Street Securities. He had survived the tech-bubble market crash of 2000-2002, and with a growing book of business, the wind was at his back professionally.
Wealth management beckons
Then Michael sensed an opportunity echoing from the savings and loan days. In early 2003, he and a good friend he met five years earlier, Kevin Eichner, brainstormed on an idea. Kevin had recently stepped down from the CEO post at GenAmerica Financial to take the same job at Enterprise Bank & Trust, a St. Louis bank he had co-founded in 1988 and in which he retained a significant ownership stake.
Together, Michael and Kevin envisioned creating a wealth management unit within the bank to market insurance and securities products and money management services to the bank's customers, most of whom are business owners. Enterprise Bank & Trust's mission was (and still is) to serve entrepreneurs and provide the financing so essential to small-business development.
Once they were convinced that this new unit would operate "at zero cost to the bank," and go through the bank's team of bankers for referrals to bank clients, the deal was done. Michael sold his interest in Polaris Financial Strategies and took his personal client base and his two longtime assistants, Sharon Gough and Sandee Speiser, to Enterprise.
It was a smart move for all involved. Michael is now the president of Enterprise's Wealth Products Group. Last month, the unit marked its five-year anniversary with Enterprise. It has grown every year in "gross dollars received" or GDRs, which is how Michael measures his business. GDRs are a combination of insurance commissions and securities transaction payouts.
"Banks run on a 2-3% profit margin. They need an alternative source of fee income," Michael says. "With such a significant shakeup going on in the financial community, and the big banks under pressure, I think we're going to end up with more mid-size or community banks, and they will probably be the bank of choice in the future. Those banks need us."
The bank-agent relationship has some basic logic going for it. The agent has professional expertise to offer one-to-one; the bank has plenty of "ones" in its customer base. The key, Michael believes, is striking the right split of compensation.
"Take a professional in our business and pair him up with a banker/relationship manager who can give that agent access to clientele -- that's where the bank can create a significant fee income split," he says. "But everybody's got to be fair about the split. The agent can't think he is going to get 90 cents out of every dollar. You have to determine what's fair for everybody -- that's the big thing."
What does the producer get from such an arrangement? One word: Access. "The big difference it can make is in the access to people you can't get to on your own, or get to on a favorable basis," Michael says. "I've met some significant people here in the St. Louis community who I probably wouldn't have had access to otherwise."
Enterprise Bank & Trust has about 35 bankers, officially known as "relationship managers" or RMs, and they are "a great source for referrals," Michael adds. "It took me awhile to gain their trust before they allowed me to meet their clients. I understand that. If I interact with their client and anything goes wrong, they stand to lose. Trust is everything, and it goes both ways."
Gathering assets
Take away the bank marquee, and Michael is much like any established financial professional whose basic tools of the trade are life insurance, annuities, and investments. At age 52, with 25 years in the business, he credits some of his success simply to having the CFP designation, which he earned in 1986. (According to Michael, his father Paul was one of the first insurance producers in the country to earn the CFP, in the early 1970s.) Having the CFP enables Michael to put his services to each client in a financial-planning framework, even though he doesn't do fee-based, holistic planning per se.
"The market downturn in 2000 taught me a lesson," he says. "It was my identifier, to show me what I do best. I'm an asset-gatherer. People in our business today are either asset gatherers or asset managers. You may think you can do both, but you've got limited capacity, and you can't do both well. It's like driving and talking on the cell phone -- something is not getting 100% of your attention."
The distinction between gathering and managing assets becomes more important, Michael believes, when insurance producers sell variable life products. Variable life cash values invested in equities have suffered right along with stock portfolios since last fall, and Michael's question is, who's minding the store for those policyholders?
"It's one thing to have a discussion with a client about their IRA that had been worth $100,000 and is now worth $50,000," he says. "You figure it's bound to come back, right? It's a whole different topic to talk about variable life cash value that is tied to the market, and that is supporting the ultimate reason the client bought the policy -- for the death benefit! I worry about that, for the life companies and the broker-dealers."
Michael refers clients to the trust company division at Enterprise when they need full financial planning, which can also include money-management help. "Another lesson I learned is that you need to put your clients with the right third-party money managers," he says. "They have the asset allocation programs and managed account platforms that best fit my clients' objectives."
"Is the market up or down? I worry about it until 3 p.m. Central time each day. Even so, I know I can still spend my day out seeing people. If I assess my clients' risk tolerance properly, and keep up with them and talk to them, we can get through any market together."
The 15-minute meeting
His client mix is heavily laced with small-business owners, professionals, executives and a sizable block of senior clients he carried over from Polaris Financial Strategies. The revenue split between securities and insurance sales is about 60/40, but Michael hopes to make it 50/50 this year, driven in part by the bear market.
Like many successful advisors, Michael had to go through some false starts and dead ends before settling on a marketing process that works for him. "Direct mail hasn't worked," he says. "I've tried the lunch or dinner workshops, too, and fed a lot of people, but I found it just wasn't my thing." He does often meet clients over breakfast or lunch for "stage one" of his four-step sales process (see below). If he's just been introduced to someone and wants to arrange for a first meeting, he offers to limit it to 15 minutes.
 |
"In 15 minutes, if I can say something that interests the person, I'll stay as long as he or she needs me; if not, I'm happy to leave."
He recently proposed to a new prospect that he would do a "feasibility study" of her life insurance. It was his way of suggesting a preliminary application. "She looked at me and said, 'What's that? What does it involve?' I explained it to her and she said, 'Fine, let's go.' A 'prelim' costs them nothing, we have the time to do it, and we can hold off on a medical exam until we know what we're talking about, if it's feasible. Clients will say yes to that, fast."
A repeat role model
A typical work day can stretch well into the evening for Michael, even though at this stage of his career he is well past the need to see clients at night.
The long hours are frequently interrupted, however, by his attendance at the activities of his three children, daughters Morgan (age 18), Whitney (16) and son Justin, 12. Michael and his wife Laurie were married in 1988.
Michael is especially grateful that his profession gives him the freedom to attend his children's events. In that way, too, he is following the path his father set for him. Paul Weisman died of leukemia this past January at age 79. He started his insurance career in 1957, the same year Michael was born. "I guess it was an omen," Michael notes wistfully. "Growing up, my two brothers and I played hockey, and we always saw him at every game. But we also knew how hard he worked. Now I know what a role model he was, because I resemble him.
"I'm flattered to have people refer to me as a success. It's all about honesty, integrity and plain hard work. This is a great business, because we can really make a difference for our clients." That's one truth we can all take to the bank.
Securities offered through Walnut Street Securities, 8077 Maryland Avenue, Clayton, Mo., 63105. Fee based financial planning offered by Enterprise Bank & Trust. Enterprise Bank & Trust is not affiliated with Walnut Street Securities.
Gordon Bess, CLU, FLMI, is a former editor of Life Insurance Selling. Prior to LIS, he spent 26 years in various marketing and communications positions at General American Life and its parent company, MetLife.
