The first 90 days with a new and/or experienced associate advisor
So you’ve found the perfect advisor to work with – Now what do you do?
In our experience, many senior financial advisors that are looking for a junior advisor do not properly execute their 90 day plan. Many senior advisors believe that a new advisor should be able to parachute into their practice with minimal support, training and supervision. Unfortunately, a poor 90 day plan usually becomes a frustrating experience for all concerned.
Michael Gerber, author of the best selling E-Myth, correctly states that entrepreneurial mom and pop style companies fail to move to the next level because their owners work in the business and not on the business. Financial advisors are no different. Many financial advisors would find it difficult to embrace the full potential of a junior advisor because they do not make the time or have the energy to properly train and mentor these individuals. Like training a new administrator, it takes time to educate the new person on your business, your style, your clients, habits and other pertinent business matters.
Training & Development
Depending on the person’s qualifications and experience a training schedule based on your priorities, goals, objectives and expectations is important. Listed below are areas of training to consider;
· Working with your clients (what are your expectations)
· Client management system for tracking and follow-up
· Mutual Funds & Segregated Funds (companies you deal with)
· Financial planning software
· Fact finding & needs analysis
· Insurance quote systems/companies and contact people
· Life Insurance products (Term, Ulife & Whole Life)
· Living Benefits (CI, DI & LTC)
· Estate Planning
· Target Marketing
· Networking with Centers of Influence
· Prospecting, handling objections, closing and referrals
Ask your MGA/Dealership for help. Independent Planning Group, for example, requires all new advisors attend their Institute for Professional Growth which involves a one week boot camp followed by weekly and monthly training sessions covering all aspects of full financial planning during their first year.
Introduction to your clients
The biggest challenge for most new advisors is not having a network of clients to work with and a lack of confidence. The opportunity to work with an established advisor who is willing to mentor the right person and share their clients has huge benefit to both parties. As the associate advisor learns and gains confidence they will add value and revenue to the business by adding their own referrals, networking groups, centers of influence, new products and target markets.
Many established advisors benefit from having the associate start out working with their C & D clients so they have more time to focus on the A & B clients instead of expecting them to find their own clients right away. Consider sending a letter to your clients explaining your practice is growing and you have added a licensed advisor to your team and he/she will be calling them in the near future to introduce themselves. Make the first few calls yourself in front of the advisor to demonstrate the process. Then have the new advisor make calls while you listen. This practice combined with constructive feedback will help build their confidence quickly and help them overcome both rejection and objections sooner.
Meeting clients face to face
Providing a fact finding sheet for the associate advisor, so they know what questions to ask clients, is also key to gaining confidence. Complete the fact finding sheet (basic needs analysis) with the advisor first so they understand its purpose and how it builds relationships and trust. Explain how it quickly determines other products and services the clients may need and also educates them about all the other services and products you provide. Conduct the first few appointments with the clients yourself while the associate advisor listens and learns. Discuss each appointment after and then have the associate advisor conduct future appointments while you observe. The feedback after the appointment is very beneficial to their training and development.
Tracking System - If you can’t measure it you can’t manage it
Training a new advisor on your system for tracking existing business, new business, compensation, client notes, follow ups, reminders, marketing initiatives, centers of influence, networking events and referrals ensures the new advisor stays focused and tracks business growth. This information is also vital for the established advisor when completing performance reviews, planning future business and marketing strategies and future training.
Challenges
The biggest challenge for established advisors is finding the right person, taking the time to train them and effectively incorporating that person into their business plan. There is no shortage of people interested in bringing value, revenue, energy and fresh ideas to your business. You just have to know where to find them and I can help with that.
Tuesday, April 13, 2010
Wednesday, April 7, 2010
Will New Regulatory Regime hit the Life Insurance Industry too?
As a principal heading up a Managing General Agency (MGA) in Canada, we are starting to see more regulatory interest in the Canadian Life Insurance industry. This includes the increasingly popular Segregated Fund product too.
Recently our firm’s compliance officer and I participated in a compliance review on our firm conducted by one of our insurance distribution partners. They were keenly interested to learn about our firm’s compliance organization, the screening of representatives, their sales practices, and our licensing and monitoring process. They further wanted to know how we monitor advisor suitability to distribute insurance products, the documentation advisors leave with their clients to fully disclose how they hold themselves out to the public.
In discussion with some regulatory leaders, they appear to want to gain a better understanding of current business models and the relationship between insurance company supplier, their distribution offices and the licensed advisor. Questions being asked are what are the relationship between advisors, MGA’s and insurer? What responsibilities do insurers delegate to MGA’s? What supervision do MGA’s conduct? Is there consistency in our industry with all MGA’s or does it vary significantly?
It hasn’t helped when articles get produced such as MGAs thrive in Industry’s “Wild West.” MGA’s, the middlemen in the sales process, are unregulated, but no one seems to care.
As advisors we are responsible for the overall sales presentation and appropriateness of the insurance recommendations. We as MGA’s cannot be expected to monitor the prudence of an advisor’s recommendation given that we did not speak with the client directly and are seldom apprised of what was discussed. In addition, as advisors are allowed to deal with more than one MGA, even with the same client, an MGA would have no way of knowing a client’s needs, goals, and objectives. Besides, the advisor is in the best position to access what coverage is appropriate for the client based upon their discussions.
So that the regulatory authorities feel more comfort in our roles and responsibilities, it will be critical that advisors demonstrate a sufficient fact-finding needs assessment to properly access the client’s circumstances, goals, and objectives. As well advisors must fully and accurately complete all required documentation, disclosure forms, etc., in addition to following the code of conduct of their individual licenses, their MGAs code on conduct and as well as adopting a Best Practice process such as the one from Advocis at all times.
As MGA’s we must make sure we review applications for insurance to ensure they are complete and accurate, and follow the underwriters guidelines for handling incomplete documentation, while maintaining proper records in a safe and confidential manner. Accuracy of information between the insurer and advisor is critical.
While we as advisors and MGA’s believe it is not necessary to impose additional responsibilities on neither life insurance advisors nor MGA’s, we must not lend reason to send off alarm bells. Only our actions and time will tell if Mutual Fund type guidelines are necessary in the Canadian Life Insurance world too. Are you doing your part in all your actions and procedures to comfort the regulatory authorities or are you playing just lip service and as a result, your bad actions will result in more rules based regulation in our industry too.
Recently our firm’s compliance officer and I participated in a compliance review on our firm conducted by one of our insurance distribution partners. They were keenly interested to learn about our firm’s compliance organization, the screening of representatives, their sales practices, and our licensing and monitoring process. They further wanted to know how we monitor advisor suitability to distribute insurance products, the documentation advisors leave with their clients to fully disclose how they hold themselves out to the public.
In discussion with some regulatory leaders, they appear to want to gain a better understanding of current business models and the relationship between insurance company supplier, their distribution offices and the licensed advisor. Questions being asked are what are the relationship between advisors, MGA’s and insurer? What responsibilities do insurers delegate to MGA’s? What supervision do MGA’s conduct? Is there consistency in our industry with all MGA’s or does it vary significantly?
It hasn’t helped when articles get produced such as MGAs thrive in Industry’s “Wild West.” MGA’s, the middlemen in the sales process, are unregulated, but no one seems to care.
As advisors we are responsible for the overall sales presentation and appropriateness of the insurance recommendations. We as MGA’s cannot be expected to monitor the prudence of an advisor’s recommendation given that we did not speak with the client directly and are seldom apprised of what was discussed. In addition, as advisors are allowed to deal with more than one MGA, even with the same client, an MGA would have no way of knowing a client’s needs, goals, and objectives. Besides, the advisor is in the best position to access what coverage is appropriate for the client based upon their discussions.
So that the regulatory authorities feel more comfort in our roles and responsibilities, it will be critical that advisors demonstrate a sufficient fact-finding needs assessment to properly access the client’s circumstances, goals, and objectives. As well advisors must fully and accurately complete all required documentation, disclosure forms, etc., in addition to following the code of conduct of their individual licenses, their MGAs code on conduct and as well as adopting a Best Practice process such as the one from Advocis at all times.
As MGA’s we must make sure we review applications for insurance to ensure they are complete and accurate, and follow the underwriters guidelines for handling incomplete documentation, while maintaining proper records in a safe and confidential manner. Accuracy of information between the insurer and advisor is critical.
While we as advisors and MGA’s believe it is not necessary to impose additional responsibilities on neither life insurance advisors nor MGA’s, we must not lend reason to send off alarm bells. Only our actions and time will tell if Mutual Fund type guidelines are necessary in the Canadian Life Insurance world too. Are you doing your part in all your actions and procedures to comfort the regulatory authorities or are you playing just lip service and as a result, your bad actions will result in more rules based regulation in our industry too.
Sunday, April 4, 2010
Flaherty denies new taxes on financial services
Reprinted from the Toronto Sun, April 4th, 2010
By JULIAN BELTRAME, The Canadian Press
OTTAWA — Finance Minister Jim Flaherty insisted Friday he is not raising new taxes on financial services, saying reports to the contrary are misplaced.
With cries of foul shouted in the House of Commons, the finance minister moved to stem fears that his department is applying a new definition of financial services that would see the five-per-cent GST applied to a whole new range of transactions.
With the harmonized sales tax coming into force in Ontario and British Columbia, some suggested the tax grab on the financial services sector could reach $1 billion a year.
“There seems to have been some confusion,” Flaherty said in Oshawa, Ont., on Friday.
“The intention in the Department of Finance has been to clarify the definition of financial services because of a couple of court cases that seem to have muddied the waters. There’s no intention of changing tax policy.”
An official said there would be no expanding of categories that would see the sales tax applied to areas that previously were not subject to taxation.
“This is longstanding Government of Canada policy with respect to the definition of financial services. It was the policy of the previous government, it’s our policy as well. We are going to maintain that definition and take whatever steps we have to make it absolutely clear that the longstanding definition remains the same,” Flaherty said.
Asked if he was giving an assurance to the services industry, Flaherty replied in the affirmative.
“That’s the reassurance we want them to have. We will have the tools in the first budget implementation act to make sure we get back to the status quo before the court cases so people can rest assured that the tax treatment of defined financial services will not change.”
The controversy was a focus of opposition attacks on the government during question period Friday.
Liberal MP Wayne Easter accused the Conservatives of a “conniving deception,” saying since financial services firms will pass on the tax hike, consumers will ultimately wind up paying.
Flaherty’s parliamentary secretary Ted Menzies responded that the new provisions in the budget were “simply technical clarifications to a court case.”
Ottawa had announced in December that clarifications on how the GST would be applied on financial services were coming as a result of the court decisions.
The industry became alarmed about just how much they would affect services following a Canada Revenue Agency note that left the door open to many more activities being subject to the sales tax, including commissions paid to mutual fund dealers and to auto dealers to arrange credit for car buyers.
By JULIAN BELTRAME, The Canadian Press
OTTAWA — Finance Minister Jim Flaherty insisted Friday he is not raising new taxes on financial services, saying reports to the contrary are misplaced.
With cries of foul shouted in the House of Commons, the finance minister moved to stem fears that his department is applying a new definition of financial services that would see the five-per-cent GST applied to a whole new range of transactions.
With the harmonized sales tax coming into force in Ontario and British Columbia, some suggested the tax grab on the financial services sector could reach $1 billion a year.
“There seems to have been some confusion,” Flaherty said in Oshawa, Ont., on Friday.
“The intention in the Department of Finance has been to clarify the definition of financial services because of a couple of court cases that seem to have muddied the waters. There’s no intention of changing tax policy.”
An official said there would be no expanding of categories that would see the sales tax applied to areas that previously were not subject to taxation.
“This is longstanding Government of Canada policy with respect to the definition of financial services. It was the policy of the previous government, it’s our policy as well. We are going to maintain that definition and take whatever steps we have to make it absolutely clear that the longstanding definition remains the same,” Flaherty said.
Asked if he was giving an assurance to the services industry, Flaherty replied in the affirmative.
“That’s the reassurance we want them to have. We will have the tools in the first budget implementation act to make sure we get back to the status quo before the court cases so people can rest assured that the tax treatment of defined financial services will not change.”
The controversy was a focus of opposition attacks on the government during question period Friday.
Liberal MP Wayne Easter accused the Conservatives of a “conniving deception,” saying since financial services firms will pass on the tax hike, consumers will ultimately wind up paying.
Flaherty’s parliamentary secretary Ted Menzies responded that the new provisions in the budget were “simply technical clarifications to a court case.”
Ottawa had announced in December that clarifications on how the GST would be applied on financial services were coming as a result of the court decisions.
The industry became alarmed about just how much they would affect services following a Canada Revenue Agency note that left the door open to many more activities being subject to the sales tax, including commissions paid to mutual fund dealers and to auto dealers to arrange credit for car buyers.
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