Question: How has your mix of insurance versus financial revenues changed in the last five years and why?
“My business mix is 60 percent wealth management and 40 percent insurance. The wealth management includes managed money and variable annuities. The insurance includes life and disability plus some long-term care insurance. In the late 1990s and early 2000s, I only sold long-term care insurance. But I realized that to gain productivity, I needed to move into comprehensive planning, and that’s what I did. I used to lead with products, but now I lead with creating invaluable relationships with clients. Once I got into MDRT, it was a life-changer. To be the very best, I learned to balance life and work and family. The organization, the people, the speakers — all help you focus on your practice so that it becomes so productive that one day you’ll be at the top. In my case, I wanted to do comprehensive planning, and MDRT helped me do that with both insurance and investments. So the business mix I have today is because I changed. I chose the direction I wanted to go, and MDRT provided me with the motivation to go in that direction.”
—Nick L. Morgan, Southeastern Financial Advisors, Ridgeland, Miss.
“The mix of insurance and investments has changed — to more investment products. Forty years ago, when I started out, I only sold life, health and disability insurance. People in my age group didn’t have money for investments, so my investment sales were zero. But that gradually changed as my clients got older. In recent times, many have become more interested in buying investment products. They are worried that the money they have acquired won’t be adequate, and that they won’t be able to keep their present lifestyle in their retirement years unless they make some changes. So my mix today is about 50/50, insurance to investments. It used to be that people invested for the long term, but today many people want immediate return. The lack of security that investments represent doesn’t seem to bother them as much as it used to. I think that’s because of the mindset and culture the government has promoted.”
–Patrick L. Knueven, CLU, ChFC, Knueven Insurance and Investments, Des Moines, Iowa
“My sole focus is insurance. But I work in a team, where we also have specialists for investments. This structure helps me increase my revenues because I’m a deep specialist with a narrow focus. From 2008 on, clients have wanted plans with an investment component but with downside protection. They were nervous after the crash, so whole life provides them with a good diversification strategy and they like the product guarantees. As a result, my whole life production has gone up. At the firm level, though, investment revenues are increasing this year. In fact, we are seeing record deposits in retirement plans and in individual investments. Much of that is because the markets are up. People see the gains and are starting to go back into investments. I don’t think clients will pull money out of their whole life policies because of that, but I am now watching to see if new whole life sales will start to go down.”
—Eleena Swan, CFP, CLU, EPC, Insurance Agency Ltd, Vancouver, B.C., Canada