ABG: Always Be Growing

It might be tempting to underestimate James Silbernagel because of his calm, unassuming and humble demeanor. That would be a mistake because not only is he a well-rounded insurance agent and financial advisor, he also has a driving ambition to broaden himself and his agency even after nearly 40 years in the business.

His Wisconsin-based business, The Silbernagel Group, encompasses Real Wealth Advisors, The Silbernagel Group insurance services, Real Wealth Tax and Accounting, and Real Wealth Media. The insurance business encompasses everything from retirement products to property/casualty.

Silbernagel added these businesses as he pushed his practice to the next level. When he did not have efficient access to services his clients needed, he built them within his organization.

That drive for constant improvement earned Silbernagel a seat on the board of Forum 400 and got him to the Top of the Table for more than 15 years, among many other honors. And he is probably one of the few people of that stature who have a weekly podcast. Silbernagel is a rare combination of gifted salesperson, holistic advisor and effective business leader.

Silbernagel has been at the forefront of many changes in the insurance and financial industries, naturally embracing holistic advising long before it became a trend. In this interview with Publisher Paul Feldman, Silbernagel discusses the journey he took in building his business and shares his insight on what he learned along the way.

FELDMAN: You have had an illustrious career of nearly 40 years in this industry. How did you get started in the business?

SILBERNAGEL: I started right out of high school by making appointments for life insurance agents for estate planning in 1982.

It was probably the best training that anybody could have because it was a numbers game. You just had to call and call and call and call and book appointments.

So, not realizing it at the time, I didn’t get too concerned when people said no. I just knew I had to make X number of calls, I’d get this many yeses, and I’d make so much money per appointment. I never had a base pay or anything like that. It was completely results-based.

Then I ended up working for a small agency, but they only had so many appointments that they needed each week. So, it ended up being a very part-time job. While I made good money for a kid back then, $10 to $15 an hour, I only worked two hours a week or three and a half hours a week. So, I couldn’t make ends meet with that. They referred me to another place, and after I qualified several thousand leads for them over a few months, they said they had too many leads and they’d never get to them.

In the meantime, I got my health insurance license and my life insurance license, and the owner of the firm gave me a script and said, “Go out and start selling stuff.” That was my training.
I did that for a while but then decided I wanted to get into my own thing because I’m just doing one product. To me, that was kind of boring. I wanted to do other things and the owner wanted me only to sell these Medicare supplements.

I ended up starting my own business, and I had some challenges there because unbeknownst to me, the state was changing the commission structure. They lowered commission rates to literally 25% of what I was expecting. I ended up going into credit card debt to the tune of about $50,000 that first year until things got rolling. When they changed the rules like that, I realized I needed to be much more diversified in my practice. They also levelized commissions in long-term care insurance, which I was doing a little bit of.

I discovered NAIFA, which back then was NALU. They had LUTC courses that helped me learn about not only life insurance, but also disability income insurance. I ended up getting my securities license and slowly but surely got involved with that side of the business.

I started doing estate planning, partnering with an attorney. Now we’re at the point where we’re pretty much a one-stop shop. I have a CPA firm in my office, and I actually own the firm. I’m not an accountant, but I have a CPA running it. I also have a property and casualty firm.

We have an attorney who has regular office hours with clients where we take an active role in the estate planning process. We do the light work and the attorney does the legal work. And we don’t share compensation, but we share the client. What we found by working together and communicating together is that we all can be a lot more efficient.

I would say the emphasis right now is on retirement planning. It’s kind of like a waterbed — you push on one end of it and it ripples on the other end. If all you’re doing is looking at one aspect, not only are you not serving the client very well, but you’re really limiting your own opportunities.

Our clients pretty much stay with us and we have multiple lines of business with them, which helps solidify the client but also helps us to have predictable income streams.

We have 17 or 18 employees. We also have some other people who aren’t necessarily employees but we work pretty closely with them.

FELDMAN: It’s a whole different world out there with videoconferencing and clients becoming more comfortable with the technology. How is tech working out for your firm?

SILBERNAGEL: Tech saves time, especially working with canceled or rescheduled meetings. One thing we’re taught in the industry is “Don’t have a meeting with just one spouse. You want to have them both there.” Because otherwise you’re going to have to repeat yourself. Things get lost in the translation. It’s best to have them both there at those meetings.

But if one’s running late from work or whatever, that either sets you way back or extends your day a lot, where you’re twiddling your thumbs for a half-hour waiting for them. Or they just plain old reschedule and now that’s a time slot you cannot get back — it’s gone. And now you have to reschedule and shake up another time slot. That’s not very efficient.

With video teleconferencing, that spouse could be running late from work and they could stay at their desk at work and still have the conference there or when they get in the car. They go on their smartphone and they can still be part of the meeting. So, it is amazing how much more efficient you can be. I never imagined how big of a difference that would make.

FELDMAN: How have you found prospecting during these times? And what prospecting technique do you find successful?

SILBERNAGEL: I have a program called Real Wealth that I made to give back to the industry. It’s a way for advisors to touch base with their clients, basically once a week or once a month.
I use my own services, so I interview a lot of people just like you’re interviewing me. And we do a podcast that’s designed for the client with the general theme of “Don’t go it alone, use your professionals.”

So, we’re sending that out. We get referrals from that. One thing is, through our one-stop shop we also ask for referrals and cross-refer people between the different business entities. That has been very successful. Another thing that has really helped, and I’ve done programs on this, is the family meeting. When clients come in today, we do have a focus on retirement planning. So, we’re getting a lot of people in their 50s or 60s, and I talk about how we do estate planning.

One of the things I require of every client used to be a suggestion, and nothing ever happened. Now I tell them when I engage them, “Hey, if your kids aren’t at the point where they’re ready for all this yet because they’re too young, we’ll figure it out. I need a commitment from you that at some point we are going to have a family meeting.”

We’ll determine how deep we get into any information. For example, if they don’t want to go through “We have a bank account at ABC that has $32,463.82,” we don’t have to go into that detail. If they want to, that’s fine, or we can be very generic. The clients love that we care enough to get the kids involved. We go through the stuff and then I tell them, “This is the type of planning that we’re doing for your parents, but probably would be worthwhile for you.”

The kids who schedule a meeting are worth our time because they have the right mindset. They’re motivated to get things done. The kids who don’t set an appointment with us, it’s because they’re embarrassed because they’re a financial wreck and they haven’t done a lot of planning or whatever. So, they self-screen. I don’t have to offend anybody or have any minimums for them to be worthy or anything like that.

What’s interesting is now I’ve touched base with them. And then with our program, I put them on my podcast list. They’re going to get dripped every single week.

Either I’m going to make them clients right away or, when the parents leave this earth — guess what — they’re leaving an inheritance to these kids who have nothing. It gives us an opportunity at that time to keep the money that we’ve helped grow stay with the business.

It’s continuity. I don’t really have to prospect. We have a system of prospecting, but it’s not like I’m out doing cold calls or mailers or anything like that.

It doesn’t cost a heck of a lot of money. I remember the old days where it cost you $3,000 to do one mailer. For $3,000, I could be sending my content out for the next three years every week. Leveraging technology is a huge thing.

FELDMAN: Does your team approach help with that range of prospects and clients?

SILBERNAGEL: Right now, I have an advisor who is 10 years my junior, and I have another advisor who interned for me and now has three years in the business. So not only can I capture those generations as clients, but I can connect them with someone who is in their own age group.
Having that team approach really allows us to do a good job for clients and make them feel comfortable no matter what level they’re in.

FELDMAN: You mentioned you have a CPA firm in the office, which is a smart move for an agency. How did you bring that on board?

SILBERNAGEL: It was started maybe 15, 20 years ago. I realized I had a lot of problems connecting with different CPAs when we had a mutual client, and I wasted a lot of time playing phone tag. Then I also had a client who really needed some help. They were getting older and needed some help with paying their bills and everything. That prompted me to look into bringing in a CPA.

Eventually, I decided to start a new CPA firm, and they’re on-site. And I’ll tell you what — we use that CPA firm to drive business because we offer a first-year discounted rate to do tax returns for people over 50. We deliver the tax returns as financial advisors.

The interesting thing about that is with us being involved, the CPA is giving better service because we’re reviewing what they did. Also, the CPA prepares a letter with the tax planning opportunities that they might have and we’re able to discuss that stuff.

FELDMAN: You also have a property/casualty business. How long ago did you start that?

SILBERNAGEL: That started more than 20 years ago, and it actually started because I’m also a CFP. And in CFP classes you learn about property/casualty, protecting against liability and your personal property against losses. And I’m a big believer in umbrella insurance.

I got to the point where I had a couple of people I was referring business to. One was with a major P/C firm, and he was an employee captive agent. And another one had a big independent agency. I tell people, “If you want to go with the big-name brand company, go to this guy. If you want to just shop it around with a bunch of different companies, go to this guy.” Then I have to tell them, “Make sure you let them know that I sent you or they may not return your call.”

That’s how great the service was. That’s how I started it. Then they dropped the ball on some pretty big referrals that I gave them and I decided, “Boy, if I’m going to do anything, I’ve got to do it myself to make sure they get the right service.”

We implemented something similar to what we do in financial planning. We strongly recommend at least annual reviews so people stay current with their policies. We had one client who had their policies reviewed and they were still paying for one of their kids as a driver on their policies. That kid had graduated from college three years before, and has been living away from home.

They ended up buying these policies and then nobody sees them after they buy the policy until there’s a plan. So we decided to have a high-touch, high-service model. And again, it’s just when someone comes in as a referral of our property/casualty agent. She says, “Hey, have you done an estate plan? Are you doing financial planning, retirement planning? Would you like to save some money on taxes?” They’ll tee us up. Part of our process is that every client gets their stuff reviewed to make sure there are no holes in their policies.

FELDMAN: How would you recommend somebody consider adding a CPA or a property and casualty agency to their business?

SILBERNAGEL: The way I did it offers a lot of control. But you need to have some deep pockets and perseverance to make that work. I think the best thing you could do is find a small CPA firm that’s looking to grow and sit down and have coffee with them. Maybe they even would be willing to be in the same office as you. But it is a challenge to find the right person. What I liked is that when I hired them, then they had to take my phone calls. So, I’m a little bit of a control freak. I want to make sure I control all the controllables, and you have to have the right mindset there.

Before that, we would share the client, not necessarily the revenue. But then I sent them a referral and they didn’t send me one back. Well, you’re never going to grow that way. You have to look at it this way: I’m going to do whatever’s best for the client. We’ll share the client, that will make us more efficient, and we win and the client wins.

FELDMAN: You do a lot of interviews with a lot of different advisors and coach them as well. What are some strategies that you see people doing today that are working in the market?

SILBERNAGEL: I think one thing I see happening more today that didn’t happen before is a lot more advisors are getting up to speed on long-term care insurance. I see that as one of the biggest things going forward. I also see a lot of advisors who are not getting fully educated on it, and I think that’s going to be a problem. That’s a huge thing.

I do see the model that we have where a lot more advisors are looking to get into a tax practice. One thing I didn’t mention is if you’re in a position to do so, buying an existing tax practice might be the best thing to do.

If you’re not an expert on one thing, collaborate with another advisor. I see a lot of that happening, collaboration groups. I think a lot of that is happening because the agency system, where everything’s taken care of and you’ve got a track to follow for learning, is a dying system.

And then using and leveraging technology — that’s a huge step too.

FELDMAN: Do you see a lot of colleagues who aren’t getting on board with technology?

SILBERNAGEL: It amazes me that some agents today don’t even have a client management system. That’s basic one-on-one stuff that’s been around for more than 20 years. Then having a systematic way to keep track of stuff makes it easier to hire people, makes it easier for people to step in. I’ll tell you what, if you don’t know technology, hiring someone who knows how to use technology makes a huge difference.

I know the millennials get a bad rap, and a lot of us in the business were afraid to hire younger people. But one thing I found is the generation that came after them is a lot more focused on work, and they’re not as flippant.

What I mean by that is after 18 months, millennials are bored out of their minds, and they’re on to the next opportunity, which is OK if you understand that from the beginning. They’re very smart, and they’re the first generation raised with computers. So, they’re very comfortable with that.

But the generation that came after them, their parents went through hard financial times. So, they were raised a lot different from the millennials.

If you don’t have the skills, you can find people who do. There’s a lot of that happening out there. There’s a lot of opportunity.

Paul Feldman started the website InsuranceNewsNet in 1999, followed by InsuranceNewsNet Magazine in 2008. Paul was a third-generation insurance agent before venturing into the media business. Paul won the 2012 Integrated Marketing Award (IMA) for Lead Gen Initiative for his Truth about Agent Recruiting video and was the runner-up for IMA's Marketer of the Year, a competition that includes consumer and B2B publishing companies. Find out more about Paul at www.paulfeldman.com.