Selling life insurance
The founder of The 360 Solution, Vicki Writer, discusses with Risk Adviser her work with insurance specialists and what they can do to improve their service models.
Can you outline some of the work you are doing with risk advisers?
I am working with risk advisers on a number of fronts at the moment. Probably my biggest is working with advisers who are in the process of integrating and white labelling my seven-stage digital ‘whole of life’ coaching program into their business.
I am also talking to a major licensee about piloting the program with some of their key adviser offices. It's very exciting because what I have built aligns to the white paper Deloitte put out in June last year (The Advice Based World). I have built what Deloitte describes as the future of advice – only I have it now and it's ready to be utilised for those advisers who want to change their business model and look to offer a range of additional services and set up strategic alliance networks to assist their client in plugging ‘whole of life’ gaps.
In addition, I am speaking to advisers about the flaws in the current sales model and how they can begin to think differently about the value they bring to the table when it comes to dealing with their clients and beginning to think about charging fees for the parts of the process many risk advisers give away for free.
I am doing a number of presentations about all of these concepts for dealer groups.
What are some of the strategies you help advisers with when it comes to life insurance advice?
I speak regularly to advisers about the flaws in the current service model because the current model positions the product as the key focus and not really what the client finds value in.
In addition, we have a subsidisation dilemma taking place because many advisers are paying for the parts of the process that they don’t charge for: ie, the fact find, the research, the presentation of the recommendations and the review. In the current (and very flawed) model, many advisers only get paid when the product is accepted and placed in force. I often ask advisers: how much profit are you making given all of your expenses? And, in some cases, advisers will do all of the work and the client does not make it through the UW process and so they have put all of this time and effort into something that has not resulted in any income.
It’s these conversations that set us on a path of discovery where we can begin to explore ways that firstly can ‘productise their service’ and start to charge fees for the parts of the process that many of them give away. This is where they need to start and, over time, look to completely evolve their entire business model and strategy. There are many best practice case studies where this has happened extremely successfully.
I love seeing the light go on in an adviser's mind when we begin having these conversations. It's a new way of thinking and it gives them practical ways they can begin to transform their business right now.
How can advisers appeal to a great client base and improve retention?
I think one of the main challenges an adviser has around retention is that in many circumstances, the product has been sold initially based on price. Without probably realising it, they have automatically set themselves up for failure because the client will always now be looking for something a little cheaper each year, and so we have this revolving door taking place. I remember a lesson I was taught many years ago as a BDM and the rule applies here too. If you win business based on price, the chances are you will lose the business based on price. If that is all you have to offer, I think you are setting yourself up to fail in a big way.
Retention happens when the client perceives that they have received value. It's a question of value, not price. I also believe that the emotional connections have not been made with the client at the outset and so the client doesn’t really understand what the product is linked to. They don't see the benefit in what they have because in the initial conversations, the product has been the key area of focus and not the important things in a client's life – their vision, their goals and their values. It was this very issue that was the catalyst in me developing my seven-stage ‘whole of life’ online coaching program, which advisers can now use to engage in more meaningful conversations. It is these outcomes that link back to the product, which then becomes the risk mitigation strategy (in my program I refer to this as The Lifestyle Continuity Plan). The product then becomes the piece that underpins the overall client’s life strategies and goals, and is simply the funding mechanism if something unforeseen takes place.
By building some of these core concepts when engaging with a client, we change the conversation from being purely product based to a ‘whole of life’ strategy based conversation. That is how retention is improved and the client links value to what the adviser has done.
In your experience, what are the greatest challenges preventing advisers from being able to sell more life insurance?
To be honest, i think some advisers lack some confidence in what they are providing. What I mean by this is for those advisers who are selling on product and price (which is dying a very quick death) , there seems to be a lack of belief and confidence within themselves that they are truly adding value. Now I know advisers do a great job in helping the client manage a claim and this is a key component of their service proposition. However I often ask advisers, what percentage of their client base will actually get to experience this service? Value needs to be added at the front end because if there is no perceived value - the client will simply cancel their policy at some stage down the track because they have forgotten why they bought it in the first place.
I remember very clearly like it was yesterday being over at an MDRT annual meeting in 2011. It was when the whole conversation of charging fee’s was being spoken about and it was a very big topic of conversation. I remember walking out of a session with an adviser who said this. “ its all well and good to talk about charging fee’s but you have to feel like you are adding value’. This comment has stayed with me like it was said yesterday. I remember thinking to myself - there in lies the root cause of the problem. Many advisers don’t believe they add value and so therefore they can’t even begin to think about charging fee’s.
I believe this mindset is the biggest barrier to advisers selling more insurance. If they could package up additional services. If they could change their conversations from being purely product based to a whole of life strategy based conversation, then I think they would build greater levels of confidence and as a result, attract new clients, receive more referrals and therefore be able to offer more insurance to more people.
Many advisers do not like the idea of being referred to as a salesman of life insurance, but rather an adviser. Can an adviser be both?
In relation to an adviser being a sales person - I truly believe the adviser of the future will transition to become more of a life strategist/ life coach and become a project manager, a facilitator for the clients entire life. Advice will simply be only one component of a multifaceted conversation and it will see the adviser being able to develop strategic alliances with new industries and networks - health and wellbeing specialists, career counsellors, dieticians etc.
It is this concept and model that will allow an adviser to charge fee’s, create independent income and gain entrepreneurial freedom and slowly release the strangle hold that the regulator has over their business. In this new model, they get to take back control, cash flow and certainty and in turn improve their own wellbeing by simply reducing the stress that exists currently in their lives. It will bring a range of different multipliers to their personal lives as well as their business.
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