With fewer resources than the wealthy, those in the middle market are arguably in a much riskier situation, since they often lack any significant cushion of protection from a catastrophic financial event. Everyone’s financial resources are crucial, of course, but a middle-market family stands to become a less-than-middle-market family a lot quicker if their resources take a hit.
In part two of this month’s roundtable, we talk to three top producers about how they reach middle-market prospects and how they're educating them about the need for life insurance. (For the rest of this roundtable, see part one, Why we chose the middle market, and part three, What's hot in the middle market.)
Q. What are your primary methods for communicating with prospects in the middle market? In other words, how do you reach them and let them know how you can help?
Shane Westhoelter, AEP, CLU, LUTCF, president of Gateway Financial Advisors Inc. in San Ramon, Calif.: To reach our market — clients and potential prospects — we host a number of educational workshops and client appreciation events, and we sponsor charity events. We also use technology — emails, Facebook, and Twitter communication. We still do mailings and regular telephone call touches. We also try to set ourselves apart with unique ideas like our “Friday Breakfast at IHOP.” Every Friday, we invite clients to join us for a cup of coffee and breakfast at an IHOP restaurant. We invite a product sponsor when we can or simply just meet to “talk shop.” We have found this to be so effective that we have also implemented a “Bring Drinks to Soccer” program during the week. We have committed to bring a cooler of drinks and apples and oranges to soccer and baseball games for the local youth teams. In so doing, we have found that the parents will stand around and talk with us and introduce us to other parents. We have a number of our associates doing this at several games, and the coolers have our company name on them, so it gives us great branding as well. The kids love it, and the coaches and parents appreciate the small gesture.
Brian H. Ashe, CLU, president of Chicago-based Brian Ashe & Associates Ltd.: Since I have been a producer for more than 40 years, most of my communication is through referrals from existing clients, attorneys, accountants and personal observation. We also send out an anniversary letter to all clients, with an anniversary checklist that helps us keep informed of needs, changes in jobs, marriages, newborns, etc.
Robert N. Garneau, CLU, ChFC, corporate registered investment advisor with MassMutual, based in Bedford, N.H.: Communication and developing strong relationships with the HR person and fiscal officers is very important. I “roam the halls” of each plan, and clients do not hesitate to ask questions, set up appointments, or both. I suggest they call my assistant to set up a meeting, and come to my office as much as possible, so I can better service their needs. I also send personal birthday and holiday cards to every client and their family. Many times, they will call and say how much they appreciated it, and how it was the only card they received. We also conduct “lunch and learns” in all the locations on a quarterly basis, where I update clients on their plan and the state of the market and answer any questions. Additionally, we have annual reviews and periodic phone calls to stay in touch. I always make sure my clients know planning for retirement will be different than the planning done for the accumulation phase, and there are many opportunities to protect their money in retirement. This always triggers appointments and questions.
Q. Do you find that people in the middle market need a lot of education on what insurance is all about and how it can help protect them, or do you find them fairly knowledgeable about the financial tools you can provide? If education is important to your approach, can you talk a little about how you educate your prospects?
Ashe: Education is the biggest job. Most clients in middle markets or even the wealthier markets know little about the different kinds of life insurance, their costs and benefits, and how these products fit into an overall financial plan. It’s symptomatic of a general low level of financial literacy. We find the material from the Life and Health Insurance Foundation for Education (LIFE) to be extremely helpful, not only for its simplicity but also because it comes from a not-for-profit foundation and is not company branded. We often include “slicks” — one pagers — from LIFE in our written communication to clients.
Garneau: The education of the middle market is sometimes easier than the upscale market. They put their trust completely in you because they typically don’t have other advisors. They want you to advise, not suggest. Quite often they will say, “Tell me what I should do,” which is something you do not hear in the upscale market. They always read the information I provide to them, and I dedicate as much time as they need to grasp the concepts or concerns we discuss. I also share many concepts from the Life and Health Insurance Foundation for Education (LIFE), and take advantage of the resources provided during Life Insurance Awareness Month (LIAM).
Westhoelter: I have found that most are informed in a general sense, but they are more on information overload and not sure what is correct or accurate. They hear many things but do not always understand what they hear. I try to take the industry talk out of my conversations and bring it to a level of everyday communication. Often I will say, “I do not do financial planning; we do Quality Life Planning. We focus on the real needs in life and help solve for these areas of concern — what if I live, what if I linger, what if I leave, what is my legacy.”
I have found that I need to explain insurance in a way they can relate to, such as “protecting you, the money machine for the family,” or I tell them that buying term is like “renting an apartment; as long as you pay the monthly premium, you have protection, but you will never have any ownership or equity value like you get when you buy a house.” By using stories and examples, I help my clients understand what we really do.
For more on the middle market, see: