If you are one of the many independent producers who has built a successful career selling the products of a number of fine companies, no doubt you understand the value that independence brings to your working life. You have the ability to earn higher commissions since you don’t have a primary carrier paying your rent. You have the ability to provide the best product to fit your client’s unique needs since you are not bound to sell only your primary company’s products. And you have a great relationship with a brokerage general agent should you run into difficulties with a hard-to-place case or need some advanced underwriting expertise.
But all is not perfect in the independent distribution system. Threats are looming in many areas of the business. Some directly threaten the continued success of even the most successful independent producers, and some threaten the independent system itself. In short, if you are an independent producer, this is not the time for complacency.
Instead, this is the time to assess the threats and consider ways to avert those challenges. We’ve asked three producer panelists to talk about the threats and how they see those threats affecting their business; here's part one of the three-part roundtable.
Q. There’s a lot of talk these days about the perceived inability of the independent life insurance distribution system to sustain itself. For years, independent producers became independent after being trained within a more traditional career agent system, but as these independent agents retire, there appears to be a lack of well-trained producers to replace them. What are your thoughts on this issue, and what might the industry do to address the problem?
Jennifer A. Borislow, CLU, founder and principal of Borislow Insurance in Methuen, Mass., and president of the Million Dollar Round Table (MDRT): Colleges and universities now offer bachelors and masters degree programs in the insurance and financial services field. Producers are entering our business through a number of different channels – everything from financial planning to risk management to the investment field. The MDRT has done extensive research on what it takes to attract the young advisors to our industry and how to best train them. Our research shows that young advisors – under the age of 40 – don’t like to be labeled as life insurance agents. Actually, 32% of those surveyed are Certified Financial Planners, and a more compelling statistic is that women now represent 40% of the new advisors entering our business. One of the natural paths for advisors is following in the footsteps of a relative or a friend who is in this business. There are many second-generation producers who are being trained by mentors. The traditional insurance company training programs, a very expensive model, have been disappearing as insurance companies are more focused on investing in the experienced producers.
MDRT’s research shows that young advisors want to learn how to grow their businesses. They are continually searching for ideas and information that allow them to become more entrepreneurial, which translates in to more results. What can the insurance industry do to help? Associations like MDRT, the National Association of Independent Life Brokerage Agencies (NAILBA), the Association for Advanced Life Underwriting (AALU), the National Association of Insurance and Financial Advisors (NAIFA), and the National Association of Health Underwriters (NAHU) are all committed to providing high-level education, networking opportunities, and resources to help young advisors grow their businesses. At this year’s MDRT annual meeting we have highly successful seasoned professionals offering sessions designed to provide best practice advice on how to grow and operate your business.
I still believe this is a great business. It’s much tougher than when I started 30 years ago, but it can be very rewarding for young professionals looking for a rewarding career that allows them to make a difference in the lives of many people. We need to remain diligent in our efforts to recruit younger advisors.
Thomas F. Levasseur, CLU, CLTC, M.S. Ed., founder of the Beacon Retirement Group, in Dover, N.H.: I began my career in the general agency system in the mid-’80s and learned the life insurance business from some of the best trainers and home office schools the industry had to offer. I was very lucky to have worked in this environment and culture, but it gradually became unsustainable.
I was fortunate to have an early introduction to the MDRT. My general agency had many MDRT members, including past-president Paul Buckley, Sr., who inspired and encouraged me. Regardless of how much opportunity there was to learn and grow within this system, there were agents who didn’t succeed. In the late-’90s, a combination of economic pressures and poor decisions by management led to the demise of this nurturing approach of bringing agents in and retaining their loyalty.
I have been independent of a primary company affiliation for over 10 years. I find the opportunities for training and benefits are fewer than they were in the past general agency days, but the compensation is far greater. It’s important to find ongoing training and due diligence on products and companies. As an independent agent, you have a wider range of product offerings available and discerning consumers who are looking for independent and broad-based approaches to their financial needs.
The general agency was effective with back-office policyholder support and underwriting. These areas for the untrained or unskilled independent agent can be real stumbling blocks, but there is help available for agents who want to become independent. A field marketing organization (FMO) has been an invaluable resource for all of these areas. The FMO, if structured properly, can provide support, training, lists of well-rounded and quality product offerings, and act as a “virtual” general agency. Personalized Brokerage Services (PBS), the FMO with which I have been fortunate to be affiliated, is located in Topeka, Kan., and I am on the East Coast in Dover, N.H. Regardless of time and distance, the quality and depth of service is as good, if not better, than a general agency near my office.
I also developed many wonderful relationships with fellow independent agents and PBS specialists whom I work with on a daily basis. This organization allows me to not only prosper but grow as an independent agent. I have taken on a protégé under the MDRT mentor program, and PBS is helping with training and assisting us to craft a long-term business continuity plan.
Michael L. Weintraub, CLU, president of the retirement division of Ascension Benefits & Insurance Solutions, in Walnut Creek, Calif.: Last year as chair of the LIFE Foundation, I was privileged to attend industry trade association meetings. The attendees of the General Agents and Managers Association (GAMA) meetings have not given up their role of recruiting and training life insurance agents. I was impressed with not only the number of agencies and people involved, but the quality of those doing the work. There are mentoring opportunities available through GAMA and the MDRT. The National Association of Independent Life Brokerage Agencies (NAILBA) also retains members by providing workshops and webinars to help improve product and sales skills.
For more on threats to independent distribution, see: