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January 26, 2003 at 07:00 PM
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Fixed annuities remain the vanguard of bank insurance programs, a recent study sponsored by Independent Financial Marketing Group, Purchase, N.Y., found. All of the banks participating in the study say their licensed bankers sell fixed annuity products, compared to only 26% that sell variable annuities through the platform staff.
Many banks are expanding their platform programs beyond fixed annuities to include other financial products, says the study, conducted by Kenneth Kehrer Associates, Princeton, N.J.
Half of the banks sell mutual funds from outside vendors and another 26% sell their own brand of funds. Forty-five percent sell life insurance, the study, “Best Practices in Platform Programs,” found.
Kehrer calls the high number of platform staff selling life insurance, including customer service people, one of the surprises of the study.
Kehrer polled 38 U.S. bank executives responsible for managing their banks platform staff licensed to sell annuities, life insurance or mutual funds. The banks ranged in deposit size from $880 million to $220 billion.
Sales success rates for bank platform reps differed sharply from product to product, according to Kenneth Kehrer, study author and head of his research firm.
The study evaluated bankers product success by calculating their participation rates, which represent the percent of bankers who, in any given month, actually sold the products they were licensed and taught to sell.
Participation rates ranged from a high of 64% for fixed annuities to a low of 29% for both life insurance and variable annuities, Kehrer found.
Participation in sales efforts improved considerably with experience, at least for life insurance, the study noted. The average life insurance participation rate in banks that had been selling that type of product for more than five years was 41%, compared to 27% for younger programs, the study found.
Fixed annuities proved to be the road to profitable mutual fund sales for many bank platform staff. In the average bank, 70% of staff selling FAs also sell mutual funds, while only half of those that sell FAs also sell variable annuities.
The typical platform banker sells five fixed annuities from three insurers, according to the study.
For those selling mutual funds, typical product selection was 32 funds from three fund families.
