I started my career in newspapers in 1996 when the industry was just starting to feel the impact of the Internet.
My first newsroom had one computer hooked up to the Internet, and to use it, you had to very conspicuously park yourself in front of it and do your research.
It’s a commentary on how much the newspaper business has changed that the publication in question – an upstate New York weekly -- no longer exists. It’s the kind of uncertainty that many independent insurance agents find themselves in right now. More on that in a moment.
In 1996, an estimated 54,000 journalists worked for U.S. newspapers, according to the American Society for News Editors Newsroom Employment Census. A decade later, by which time I had relocated to Carlisle, Pa., that figure held firm at 55,000.
Then the industry was hit with a double whammy: the long-feared Internet news revolution took hold, and the economy tanked. In three years, the newspaper industry shed 25 percent of its journalists (to 41,500 in 2009).
As for me, I’m reminded of the famous one-word telegram Sen. Charles Sumner sent embattled Secretary of War Edwin Stanton in 1868: “Stick.” So stick I did, but I paid a price.
I went without a pay raise from 2008 until I left the daily newspaper industry in 2014. A good economist would tell you I lost plenty of real purchasing power by going six years essentially making the same salary.
Worse than that were the constant cutbacks and weekly uncertainty about our financial footing. It’s the reason I left the industry.
Many advisors and agents are going through the same anxiety right now. But it’s regulatory pressure that is causing their stress. Many in the industry are going through significant change generated by the new Department of Labor fiduciary rule.
Also known as the “Conflict of Interest Rule,” the DOL mandates will push many agents and advisors into fee-based models, or require extensive compliance hoops for them to accept “reasonable” commissions.
In short, it appears many of them will see their compensation slashed.
We can debate whether or not the fiduciary rule is good or bad – and that is another blog for another day – but we must acknowledge these are human beings with families.
They have people to feed, children to send to college and career goals just like we all do. It’s one thing when market forces threaten your profession and your livelihood. We often have little control over the forces that affect supply and demand.
Seen in that light, the vehement opposition is understandable. The Insured Retirement Institute is teaming up with Milliman in an effect to take some of the unknowns out of the equation.
According to a news release, they will conduct a survey of compensation practices regarding sales of annuities and other investment products.
“While we believe our members have always strived to design their compensation practices in an appropriate and reasonable manner, demonstrating compliance with this new legal requirement is another matter,” said IRI President Cathy Weatherford. “Overcoming this hurdle is a significant undertaking, and we are proud to be able to deliver this tool to help our members make this determination.”
Addressing those compensation questions will certainly bring some clarity and address a lot of concerns from the advisor level on up.
In an industry struggling to recruit and retain talent, that is welcome news.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]
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