The Transformation Of The Financial Services Industry

Access to financial information, consumerism, regulatory changes, and a shrinking agent/advisor field force are shaking up the financial services industry, and whether we like it or not, these changes are here to stay. Today, I'll zero in on the "insured" products: life insurance and annuities. I'm aware there are many other "safe money” products like Medicare supplements, critical illness, disability income, and more, but for our audience, I'll focus on life insurance and annuities as they're the products our readers are most likely to sell.

The current situation isn't new: the insurance industry has long grappled with the aging of the field force. LIMRA, along with other research firms, continues to highlight that the average age of the field force is around 58 or 59 years old. Some studies suggest this age is decreasing. Why? In my view, it's due to the retirement and passing of agents who began as career agents and have generously fueled our industry with sales for many years. Others may attribute it to the challenges of digitalization and regulatory hurdles, prompting some to leave prematurely. So, what does this mean for the industry? (And remember, you're part of it). Let's delve into it...

Regardless of what unfolds in Washington or elsewhere, there's immense pressure on insurance companies to revamp delivery channels to drive more sales, better sales, compliant sales, and more profitable sales. This entails reducing costs and enabling consumers to purchase when, where, and how they prefer. This shift includes online sales of more transactional products like term insurance (Yes, I'm aware "Big Lou" is already selling term on Sirius, and he's on meds too). There's also a push to develop products that consumers actually want to buy, not just the ones sitting on shelves for years. Furthermore, insurance companies are seeking strategic alliances/partnerships with marketing organizations and banks to deliver quality, compliant, and suitable sales to consumers. Nobody wants to be part of a scandalous expose on bad sales - with social media, it only takes a moment, and you'll be defending yourself indefinitely. So, where does this leave us... the current delivery system for these products? I believe we're in the "catbird seat" if we're perceived as credible and integral. So, where do we begin?

As much as I disapprove of the DOL/Fiduciary rule, I believe it will spotlight the good guys and girls—the ones who've always prioritized their clients’ best interests. I think the requirement to use assessment tools before making recommendations will result in more sales, larger sales, cross-selling opportunities, and more quality referrals.

I also believe boutique marketing organizations, like The Ohlson Group, will be the go-to marketers for many insurance companies. These are organizations whose members have acquired quality designations, possess home office experience, and prioritize quality over quantity. I anticipate carriers will steer clear of “spreadsheet” organizations—companies that merely market the product of the day. That's why we're excited about the future. However, today's advisor deserves and needs more.

Okay, let's talk DOL, as it's driving consumer awareness towards best interest principles. Advisors need training on how to use the new assessment tools and also instruction on how to make it a productive income driver in their practice. If advisors view the tool as a mere obligation, they're missing out on a tremendous opportunity to become the retirement go-to person in their community. The Ohlson Group is qualified and ready to lend a helping hand. We'll help you become “digital ready” in your practice. We'll assist with client/prospect engagement, periodic reviews, presentations, and provide quality content for your clients and prospects every month.

All of this isn't new. The industry has been aware of these trends for years, yet many chose to ignore them. However, based on my discussions with some of our partner companies, I'm encouraged to see they're not seeking an alternative distribution system. They're seeking additional distribution systems. Can we blame them as our ranks dwindle, and consumers have different buying preferences, such as purchasing online? Well, we're adapting, we have e-apps, and the future has never been brighter for those seizing the opportunities. Give us a call, and you'll understand why agents from coast to coast have always referred to us as... a different experience.

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Until next time… good selling!
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Raymond J. Ohlson
Founder & Retired CEO
Ohlson Group
​1-877-844-0900