Sometimes, I think it is fun to step back and look at how our different roles in the life insurance industry have changed. We need a fresh perspective on our jobs to become better at what we do. This all happens in a business environment marked by constant change. As we face pressure to produce in the face of greater competition, we should understand our roles in relation to others in the same industry.
The broker dealer occupies an interesting role in this economy. I say this because, with the Internet as the place so many people now launch a business, the broker dealer’s role is in flux. It used to be that people would visit an insurance agency to get an annuity or a life insurance policy. Now, they can go online and select an agent and buy a product from one of many insurance companies. A single agent can connect them with quotes from multiple insurers, and, therefore, the broker dealer is a manager of different kinds of agents that he or she was in the recent past. We must be experts on more products and focus more on volume sales than we did before.
What the Market Says
Broker dealers are out there in the life insurance world trying to maintain their independence even as the regulations from FINRA get tighter. A broker dealer is someone who a financial advisor or life insurance salesperson can go to work for and then earn a commission or a fee based on the amount that he or she sells. It helps to think of the broker dealer as the middleman, who gets a cut of the sales that all of the financial consultants under him earn. The dealer may assume all of the overhead costs, for example, for maintaining an office environment and providing the right equipment for advisors to reach out to existing clients and to prospects.
Both the broker dealer and the life insurance seller will make more money if they work in collaboration and share ideas on doing business. Broker dealers can serve as leaders and perform coaching and mentoring for the life insurance sellers who work for them. Life insurance agents, if you will, can use an agency to find a position under a broker dealer who matches their style. It pays to find a position where the agent is comfortable and can build long-term relationships within the community without feeling conflicts with the broker dealer.
What Broker Dealers Should Do
A broker dealer is under a lot of pressure to stay in business by reaching sales goals. This may include meeting a quota for each insurance company for which her sellers write life insurance policies or annuities on behalf of clients. This pressure is hard to withstand when there are so many people who use the telephone, mobile communications, or the Internet to find a life insurance or annuity product. Many consumers have simply stopped going to agencies. They may buy directly through the insurer’s app or website.
As a broker dealer, invest some time in marketing your brokerage to target audiences across multiple media formats, which will keep the prospects coming in. This is a make-or-break market that confronts all dealers no matter how long their agency has existed. Second, invest time in finding new salespeople who fit your business model and then coach them as they try to close enough sales in their first year on the job. You cannot stay in business by simply hiring them and turning them loose to sink or swim. As a person running my own agency for many years on the West Coast, I am ready to mentor broker dealers, such as by suggesting how to improve your current business model and to lead your agents to greater sales.