Thursday, December 1 2022
(Photo: fizkes/Adobe Stock)

As an insurance professional, you are often in competition with advisors from financial services firms. You both represent companies with long histories, but these competitors might view opening an account with them as a “step” in the customer’s financial journey. But you have a secret weapon. Use it.

Financial advisors to large corporations seek prospects who can immediately invest substantial amounts of assets. In other words, they have new account minimums. This number could be $250,000 or more. The size of the number depends on the company. They are looking for prospects who have accumulated a significant nest egg.

Insurance agents cast a wider net because you can support clients who are beginning the wealth-building journey by investing from their cash. They buy insurance or start investing in equity funds with a small amount that they accumulate gradually through monthly additions made by direct debit from their current account. It has a lot of advantages.

1. New customers can take you for a test drive. The advisor at the financial services firm asks his prospect to hand over a large lump sum to a stranger (at a good firm). Will the relationship work out? What if they don’t like the investments? There are a lot of “what if” questions. The insurance agent brings the new client into the fold with much lower dollar amounts. As the customer gets comfortable, they can add a lot more money.

2. The numbers are bigger than they look. Suppose the account minimum is $250,000. Does anyone with $250,000 qualify? Maybe not. They could have $250,000 in total across all of their taxable and retirement accounts. It’s a tough decision to put all your eggs in one basket. In reality, the prospect needs 0,000 or $750,000 in assets to be able to take some here and there without disrupting relationships. The insurance agent works with smaller amounts, accumulated over time from cash flows.

3. No one needs to get fired. People no longer keep their money under the mattress. They have it in other financial institutions. If they had total assets of $260,000 and the advisor needs $250,000 to open a new relationship, someone has to get fired. They close current account relationships. It can be annoying. Even though everything is some form of online relationship, it takes work to close everything. Establishing a new relationship with you does not mean that you have to disrupt existing relationships.

4. They understand you. Many people like a 1:1 relationship, one person they can call their agent or advisor. If the prospect doesn’t have $250,000, the big company’s financial advisor can let them know they can still be a client, as long as they’re comfortable working through the company’s call center. business or having an online relationship. You need over $250,000 to get that personal consulting relationship. However, you are able to afford this relationship without the high price tag. (The customer should understand, however, that you have many customers.)

5. Average purchase. When the stock market is volatile, prospects might think, “What if everything was invested today and the stock market crashed tomorrow?” This can make them hesitant to commit. Whether your client invests in their 401(k) at work or through automatic monthly debits from their checking account, they gradually add money over time. This is the concept behind the average cost.

There are many reasons why it may be easier for insurance professionals to initiate and later develop account relationships.

Bryce Sander is president of Perceptive Business Solutions Inc. He provides HNW customer acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor” can be found on Amazon.



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