What the heck is going on? Insurance agents are calling themselves “Financial Planners, “Retirement Planners,” “Financial Advisors”… everything except insurance agents.
Lawyers have a bad reputation too, but they don't hide behind a title. They do what they do well, or they fail. Insurance agents fall prey to marketing organizations that want to make money any way they can. They talk about positioning and fancy sales techniques. The insurance industry has gone the way of the car industry. A consumer doesn't know whom they can trust for the truth, so they're going online for a do-it-yourself plan. The consumer has little knowledge of available products, so he will attempt educate himself and with a great deal of luck might choose the right product.
My wife and I were in the market to purchase a new vehicle. We went to four dealerships with the exact same specifications on the same exact vehicle and received four different prices. When they found out there was competition, two of them dropped out and one won the race.
It took weeks to get to a conclusion that should have taken hours. Consumers are wary for good reason. They are often sold inferior products and can't get out without financial pain. Then they hate and don't trust insurance agents for good reasons. We are our own worst enemy.
Now back to my first question. What are you afraid of? My guess is that agents think they must be evasive to make money.
Here's another cute little program going on right now: “Social Security Planner.” Agents have followed a five-year-old program of advising consumers to delay their Social Security checks. They are being advised to use their retirement money to fund the delay. There are a lot of reasons that a delayed plan won’t work, however.
By using hard earned savings to pay for the delay, the consumer may be creating a cash flow problem. This cash may be needed later for health needs, as an example. With the advent of Obamacare, health costs are rising rapidly so money may be better allocated to a good hybrid life product with long term care features.
After discussions with two retired Social Security employees who were intimately involved in the actuarial creation of the payouts, they said that no matter when you take your social security check, unless you outlive your life expectancy by many years, the delay won’t help. So, the consumer is taking a huge risk by delaying and spending hard earned savings.
In our interest rate environment, it’s hard to recover lost or spent money. However, thousands of insurance agents are calling themselves Social Security planners and have not really thought through what they are doing. It’s dangerous to justify being deceptive because you feel that the consumer is stupid and needs your help making critical decisions. When you talk them into making life altering decisions, you own the outcome, but they suffer the consequences.
Why not call yourself an insurance agent selling insurance? You probably won't get rich, but you can earn a very comfortable and honest living.
I just presented two seminars. I paid $60 per meal at a local restaurant and fed 40 people. The whole seminar cost me about $3200. There were 25 buying units (households) represented and a 15 appointments. The entire seminar was about insurance products. I even passed out illustrations. One hybrid life sale of $40,000 will pay for my seminar costs. The rest is profit. I expect revenue of about $15,000 over my costs — all because I am offering common sense products that solve real potential problems without changing people’s financial philosophy.
Consumers are quite capable of making decisions without us telling them what they should do. Why not offer good products and let them own the outcome. After all, they did get to this point in life without our “wise and brilliant counsel.”