The Puppy Mills of the “Financial Service” Business
Have you met any of these young go getters with their do-it-yourself bow ties, new shoes, briefcases, and sunglasses dangling around their necks? Be careful Aunt Suzie. They’ll corner you and awkwardly fumble their way through their best attempt at a sales presentation and guilt might just drive you to buy a bad version of something you sort of need. How excited they must be, beginning their short lives in the “Financial Services” business through internships with the big boys of the Life Insurance business?
I’m sort of kidding. You’ll forgive me for my tone, won’t you? The tragedy is that these young men and women, if taught properly, could be our next generation of real professionals in insurance. And the industry needs them.
I don’t think it’s a secret that no more than 1 out of 10 people (of any age) succeed in the Life Insurance business. I recently read an article written by an AXA career agent who said he was one out of three remaining from a starting class of a thousand.
I see two major problems that are keeping these recruits from succeeding. The first problem is that these people get lured in under the guise of “Financial Services” meaning something other than Life Insurance. Eventually, they figure out that the future set for them is not making a fortune by managing multimillion dollar portfolios, but selling the same 3 life insurance products to everyone. By then, these agents have seeded their hierarchy with a few cases that will feed the beast for years to come. What bothers me is that the system is really set up this way on purpose. In other words, one of the marketing strategies of some companies is to recruit the family and friends of the eventual client.
The other thing that keeps new recruits from succeeding is that they have to start selling to clients too soon. What’s normal is on the job training where the new agent is sent out to set meetings with as many people as possible within the first couple of weeks of being licensed. Understandably the recruit fails to sell most attempts (other than Aunt Suzie). This is what I call the Win Win Weeding Process. The agencies are happy with the business they get and happy to have hired the few who make it. There needs to be a much longer training and mentorship program where the recently licensed agents can spend their time learning while getting paid fast food type wages. With few exceptions, I would say it would be smart for most new agents or financial advisers to stay away from clients for the first six months. This time should be dedicated to sponging up as much knowledge as possible. But, Imagine a recent college grad who is considering a career path. How would recruiting work if the only promise you could make is that as a new agent, you’ll barely scrape by for the next couple of years and then maybe begin earning a decent living and if you bust your ass, you’ll achieve a 6 figure income in around 5 years? That just wouldn’t gather much attention from most young people who are sick of ramen and ready for kobe beef. Well, this kind of dedication and suffering is good enough for doctors. Maybe that’s what these young people need to know.