After a steady decline through most of the 1990s, the forecast for life agent recruiting is showing an upward trend.
Many companies have been struggling with their recruiting efforts, forcing them to think of new and creative ways to attract producers. Some of these efforts appear to be paying off, and there has been a steady increase in the number of agents in the business since 1997.
At New England Financial, for instance, recruiting has become a priority. “Since 1996, recruiting has been a number one focus for the organization from a home office and a field perspective,” says Bill Cuff, vice president recruiting, training, and management development, New England Financial, Boston.
The strategy New England has been using transforms the traditional general agency operation into a marketing organization, says Cuff.
“We’ve had a shift in culture to the advanced marketing firm,” he continues. Cuff attributes New England’s continued recruiting success to this new type of organization.
“There’s a partnership between the agency and the company. Our general agents are now called managing partners; our field offices specialize in different industries, marketing to the high-net-worth market,” says Cuff.
One reason for the increase in recruiting may be found in a recent LIMRA report. The report considers the growing size of the workforce as a reason for the increase, showing a correlation between agents recruited into the business and the birth rates of the U.S. population.
The LIMRA report makes the assumption that generally people enter the workforce after 20 years. The 20-year lag in births and the number of agents recruited were at their lowest levels between 1992 and 1997. The report shows that there appears to be a direct correlation between these two elements (see figure 1).
Referring to the LIMRA report, Cuff states, “We didn’t realize this was happening. We were capitalizing on the downsizing of the industry.
“Last year’s low unemployment rate made it a tough year,” continues Cuff, “but I think the recent changes in the economy have helped us with our first six months of recruiting.”
The LIMRA report’s projections, based on birth rates, indicate that the industry can expect to see a continued increase in the number of agents until 2010 (see figure 2).
This happens to fit in well with New England Financial’s recruiting strategy. “We’ve had an aggressive growth campaign since 1996,” says Cuff. “We’ve got a 10-year strategy to double our field force.”
While birth rates can estimate the size of the workforce, the report cites other factors to which this increase in recruits can be attributed. With the baby boomer generation nearing and entering retirement, there is increased demand for financial planners to help them manage their large 401(k) plans, other retirement assets, and needs for long-term care.
In addition, the generation that followed the boomers is beginning to deal with financial matters that call for advisors.
At New England Financial, Cuff feels that the new advanced marketing firm concept will help them get more than their share of the projected increase.
“More important than the new recruits, we are seeing significant improvements in our agent retention rates,” says Cuff. “Over the last four years we’ve grown our agency force by 25%. We feel a key component was turning our sales offices into marketing firms.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, August 6, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.