During one of the toughest years in life insurance history, Tom Archer sold nearly $2 billion in life insurance.
That is impressive on its own, but it is even more of a feat because that $2 billion in business came from about a dozen cases, one of which was for $300 million in face value.
Archer’s practice handled some smaller cases. But the jumbo cases are the main driver of his business. Not bad for a kid out of the South Bronx.
How did he end up with an upscale practice with a main office on New York’s Park Avenue and another in Boca Raton, Fla.? Part of it was deciding what he did not want. Early in his career, more than 35 years ago, he knew he did not want to be cold-calling for the rest of his life.
He became interested in life insurance sales because his uncle was in the business. That was back in the day when he bought a mortgage list for leads but could not afford to buy the phone numbers. He would call information to get the number and pound the phone, a prospecting process he described as brutal.
Archer also knew that he wanted to focus on life insurance, even though he has a Certified Financial Planner designation. In an era when it seems as though all big case sellers are diversified across a few disciplines, Archer proudly says he sells life insurance. He also does not sell insurance when he believes a client’s situation does not warrant the product.
He credits his commitment to clients instead of products for building his business. His clients include several Forbes 500 families, including 18 billionaires along with many celebrities and entertainers. Archer had a baseball career in his college years, and now he serves more than 200 professional athletes in his practice.
Archer knew what he did not want and was clear on what he did. He wanted to serve the ultrawealthy, setting the bar at $10 million in 1995. That bar has been rising ever since.
In this interview with Publisher Paul Feldman, Archer tells how he was able to focus on the top tier and survive in that financial stratosphere.
FELDMAN: How did you get into the affluent market?
ARCHER: I wouldn’t not be in that. When I came into the business, I said there’s no way that I was going to go chasing people around to sell them life insurance. It’s one step above used car salesman, and you’re first viewed that way.
There’s a Woody Allen movie, I’m not sure if was “Take the Money and Run,” but somebody went to jail and the punishment was to be put in a hole with an insurance guy. The guy’s trying to sell him whole life and term life and this and that. So I said, “I don’t want to be that guy.”
I decided I’m not going to be cold-calling. I’m not going to be chasing things down. I’m going to educate myself really, really quickly; get up to speed very quickly; and work with the high-end wealthy people.
You get that reputation once you’re able to deliver on those kinds of things. You get the reputation with the advisors, whether it’s with estate planning attorneys or CPA firms, or wealthy clients in general will recommend you to their friends. The business is a lot more fun to me when you’re working on big matters.
I upped my client profile to about $10 million, and I did that around 1995. That’s because I was trying to get right into the big market. I didn’t want to take on anything that I wasn’t going to give attention to.
The only thing is that I have a personality where I want to help everyone, so I will take on matters that I shouldn’t be involved in at all. I have a very, very good staff, and I have my son now, so he can handle it — it’s good experience.
Sometimes I say to myself that what this person needs is $2 million or $3 million of term insurance, and somebody’s going to go in there and try to sell them a whole life policy for $100,000 because they’re going to try to make a bigger commission, because that’s what their managers want and everybody else wants. But the person really needs $2 million of term insurance because they have three children.
I never had a widow ask me what kind of insurance this was. I never heard them ask, “Is this term? Is this universal? Is this whole life?” They just want to know how much it was. So it’s very important to make sure that you’re taking care of the client, not taking care of yourself.
People always ask me, “Tom, what’s the best kind of life insurance?” There’s index, then there’s whole life and there’s term and there’s variable. My answer is always the same: “The best kind of life insurance is the kind of life insurance that’s in force when you die. Period.”
FELDMAN: You had mentioned that your son recently entered your business. How long has he been with you, and how have you helped him along?
ARCHER: He has been with me only a couple of months. There are two really important things in this business.
The first one is you have to have mental toughness because it’s a business of rejection. He came from playing professional baseball, and you pretty much have that ingrained, because baseball is a game of failure. If you hit three out of 10, when you strike out seven times, you’re a superstar because you’re hitting .300. So this business is similar to that as far as rejection is concerned.
The second thing that’s very important is focusing on the process and not the product. The process is what gets you there.
People will say to me, “Tom, I know you sell hundreds of millions of dollars in a case. How do you do it?”
The answer is it’s only a piece of the puzzle. I don’t go in and say, “Hey, you know what? You need $300 million in life insurance — let’s go ahead.” That’s not the way we do it.
We have a tremendous process. It’s all about reviewing documents, making sure the client’s documents are up to speed. It’s all about what they want out of their plan.
I have a lot of people who say to me, “Tom, I’m worth $500 million, and if my kids get $250 million, that’s fine, because I started with nothing.” Who’s going to argue with that? I’m not going to argue with that.
What I will say is, “You might not approve of where the other $250 million is going” and educate them on that. Then possibly talk to them about some type of charitable arrangement whereby somebody can benefit or a cause can benefit based on how they plan.
Just because people have a taxable estate doesn’t mean they need to buy life insurance, but I couldn’t get that in my head for a while. I thought, “You have to buy life insurance. You have tax.”
FELDMAN: How did you develop your life insurance strategy and your approach?
ARCHER: Our practice is mostly based on estate planning and business succession. So what I’m really looking to do is explain to clients what their problems could be in the foreseeable future. I explain to them what the problems are, then tell them there are all kinds of ways to find the solution.
I had a hedge fund guy who we wrote about $280 million on, and I asked him at the end of the day, “You know, you can get 12% on your money every year. Why would you buy life insurance?” He doesn’t really need it. But I just wanted to know.
Some of it was to hedge his bets, but some of it was because you never know, there’s no lease on life. You never know when you’re going to die. You may die when your hedge fund assets are in the dumps, and those assets may be great assets, and he doesn’t want his children to sell those assets if the market is in a down cycle.
Maybe he wants to hold on to those assets and let them appreciate and use the life insurance to pay the taxes. Because it’s a lot cheaper most of the time to have the life insurance pay for your estate taxes rather than having them come out of your own pocket.
FELDMAN: Pennies on the dollar, right?
ARCHER: Old Ben Feldman.
I spent a lot of time with Ben Feldman over the beginning of my career because he was everything in this business to everyone. We would talk for hours. His wife would say, “Ben, enough.” I’d say, “Oh, Mrs. Feldman, it’s not him, it’s me.”
To this day, I believe that life insurance is nothing more than a financial tool. We make more of it than it is, but nothing can duplicate it. It does whatever the financial tool can do.
When you get to that philosophy, it just simplifies things. I find that the more complicated my cases get, like the $300 million case, that was just a little small piece of the puzzle.
We had so many other things going on. We had valuation discounts and sales to the effect that are put into a trust. Those mechanisms all work together, but you still need that life insurance, you have to fill the void on things that you can’t transfer.
FELDMAN: How do you approach wealthy clients?
ARCHER: If people ask me what I do for a living, I say I’m in the life insurance business. Most people say, “I’m a financial advisor,” “I’m a this,” “I’m a that.” Always trying to sugarcoat the fact that they’re in the life insurance business. So, they’ll come at it in a different way, and they’re trying to sell the life insurance on the back end.
I come straight out — people know what I do. We’re very, very good at it. I made my mind up on day one that I was going to work in the ultrawealthy market. The reason I did it was because I knew I had the stomach for it and I knew I had the brain for it.
When you’re in those cases, they’re very, very, very difficult for a lot of people because it might take six months to a year to close a case. If you’re a newly married person with a baby or two, and your wife is like, “We can’t go six months or a year without a check,” and then at the end of the day, if you don’t get the case or something goes wrong, you might have wasted six months or a year.
It takes a lot of guts to be in that market. There’s an old saying that you can’t steal second base if you have your foot on first base. You have to really make the decision that you’re going to go in that direction. By going in that direction, that means occasionally walking away from smaller cases. Once you walk away from a couple of smaller cases, that’s when you really know that you’re committed to working on the larger deal.
The reason I went to the ultrawealthy market was not because of the money, although it is very good money, but because of the challenge. It was very intriguing to me to be able to dissect estate plans and be able to put in clever, cutting-edge strategies to help people get what they want to get and have their families end up where they want to end up.
FELDMAN: You work with celebrities, wealthy business people and athletes. Are your approaches different with different groups?
ARCHER: If someone’s a celebrity, I don’t treat them any differently than if they’re a business owner or if they’re a professional athlete because I take each person and each case individually, and we start from the beginning.
People really want a hands-on approach. Some of celebrities say, “I just want you to work through my business manager, my lawyers and my accountants.” It all depends on the person. We’ll include them as much as they want to be included or exclude them as much as they want to be excluded.
The one thing that I think I always had going for me in this business was I was never starstruck, for whatever reason. To me, it’s a case, it’s a person, it’s a human being, you know?
As far as the athletes go, I mean, I played a lot of baseball in my life, and I know a little bit about how athletes think. That’s more of a soft spot for me, to make sure that these guys are taken care of. Because when they make it big, there are a lot of hangers-on, and a lot of people are just trying to stay in their entourage until they don’t have any more money.
I try to make sure that they have more put away for a rainy day and they have the right documents. Sometimes we’ll even do documents. I’ll say, “This is in spite of yourself. When it’s 3 in the morning, you’re with your friends drinking at a bottle table somewhere in Vegas and they really want to go to the ATM for $100,000, you’re not doing that.” So at the end of the day, we look out for those guys very carefully.
Celebrities are human beings. Some of them are really good businesspeople, some of them aren’t because they’re focused on their career. So we try and make sure they’re buttoned up as far as documents go, as far as the right amount of coverage in their planning. Most of the time, they listen. It’s hard when we deal with somebody who doesn’t listen.
Business owners are a little bit different in that as far as succession goes, are you going to be bringing children into the business, or what are you going to do with this business when you pass? Or do you want to take care of your employees? As far as you not being here in this business, do you want some type of trust fund to continue on while the transitions are taking place? Do you have a partner? What’s going to happen with your partner? Do you want to be in business with your partner’s wife if something were to happen to your partner? Or do you want to make sure that your partner’s wife is taken care of and you now control 100% of this business? What are the tax plays in those scenarios?
After doing this for so long, I can kind of see early on where their case is going to go. But as far as grouping people differently because of their occupation, I don’t do that, because you’d be surprised. Sometimes you’ll get someone who you think would be an airhead, and it turns out they’re very sharp and very bright and very on top of things. I’ve learned never to judge a book by its cover or to label someone based on what they do for a living.
FELDMAN: What does your practice look like right now? Do you have a team, such as CPAs or financial advisors, who work with you in-house?
ARCHER: No. Right now in my practice, we only have people who are strictly on the insurance side. We have the presentation people, we have underwriting people, administrative people, service people and that’s all we have. I bring in all the business, and they process everything. So I make the promises, and they make sure I deliver on them.
We have several vendors who will review documents for us, anything a client needs to help them make a decision or to alert them of the things that they haven’t considered or haven’t put into adjustments. People will have old documents with the wrong beneficiaries and the wrong trustees.
There are so many instances when I’ll say, “Your brother-in-law is the trustee of this,” and they’ll say, “I haven’t spoken with him in eight years, and we’ve had kids since then.” So you really have to make sure that you’re keeping up on things.
Right now, the exemption is $11.7 million per person, which means you can pass that along to your children without tax, so that’s a good chunk of money to be able to pass. That may not be around that much longer; we don’t know. But it’s close to sunset to about $5 million in 2026. Given inflation, it might be $5.4 million or $5.7 million.
I talk a lot of people out of the market for needing life insurance.
FELDMAN: What are you telling them in cases when you don’t sell them something?
ARCHER: With my wealthier clients, I’ve said, “Listen, give away the $11 million and change. Give it away because you’re not going to be able to give it away five years from now. You’re only going to be able to give away $5 million.”
We can discount some assets they’re giving away. Then you’re really talking about some leverage. The growth on that over the next five years or whatever it may be is impactful.
One of the difficult issues is that when younger people come in to this business, they join up with a company, and the company is coaching them to sell, sell, sell so hard. So, that balance is hard.
I feel for new guys. I remember I had to sit with my manager every Monday. I was 21 or 22, and he asked, “How many sales? How many contacts?” You think, “Oh, God. How many times can I sell my aunt a policy?”
You really have to balance that and make sure that you have enough activity going on all the time because this is a very lonely business, believe it or not. If you don’t have a lot of activity going on, you’ll say to yourself, “Oh, boy,” because not everyone is going to come through. You’re going to put cases in, and they’re going to get declined or something may happen whereby if you’re living and dying by that case, you don’t make any money.
They call it a mill or a pipeline, whatever they call it, but you must try to keep that thing full as best you can. Going back to trying to help people, the more you help them, the better for you, the better for them, and it’ll always keep your pipeline full.
FELDMAN: You’ve been in the industry for about 35 years now. How do you keep yourself motivated and your energy level so high? It’s amazing.
ARCHER: I just want to do the right thing and help a lot of people, and I’m also driven by being the best. I don’t ever look at yesterday. I just look at today.
You want to be the best at whatever you do. The only way to be the best at whatever you do is to continually educate yourself, continually be out there, continually try to help people.
As you know, this business is a lot of aggravation and a lot of stress. You learn how to manage that. Not everything is the end of the world. Not everything is going to work out.
But as far as motivation goes, I just love this business. Now that I have my son with me, I feel even better because I’ll be able to turn the reins over to him at some point. But I’ll tell you the truth — I don’t know. What do you do when you retire? Do you play golf every day?
FELDMAN: I don’t know whether I ever want to retire. I think I’d be bored.
ARCHER: That’s my point. I don’t even like the sound of the word retire. Sounds like I’m tired, right? I’m not tired.
FELDMAN: What would you tell someone who is just starting in the business now?
ARCHER: Anytime someone has a problem and they need advice, I’m always the first one to lend a hand because we’ve all been there. The only thing that you have to do to become successful in this business is to last. That’s it. Just last.
Don’t be discouraged, don’t look at any of that. Just last. Eventually it clicks and things happen.
That’s not to say that your market is going to be the same as my market or my market is going to be the same as another person’s. But if you last and you don’t quit, and you have the mental toughness and the determination, you will be a success.