Success. In the past, the word called up images of the “man in the gray flannel suit” from the 1950s and the “high-tech bubble” of the 1990s.
Today, a lot of financial practitioners I know would settle for “black ink flowing.”
Despite news of improving corporate profits and an upward moving stock market, sales of various insurance lines and financial services are still dragging. So, they ask, where is the road to success?
Invariably, someone points to new product strategyi.e., using innovative new products to attract new sales. “We cant keep selling the same policies, especially in this tough economy,” proponents say. “New products will give us a new story to tell.”
What Your Peers Are Reading
Not so fast, say critics. If youre going after product, youre flirting with “product pushing,” they charge. That is, youll end up hustling one product or another with nary a concern for the clients unique needs, preferences and situation.
“Financial practitioners should put the customer first at all times, regardless of the economy,” say these observers. “When you do that, you will gain success for your client as well as yourself.”
Who is right, the Product Searchers or the Consumer Firsts? Lets unpack it.
The Consumer First group gained a lot of momentum in the late 1990s, when employment was full, clients were investors, and new product vendors seemed to be on every street corner. These guardians of the industry wanted to stop all the spinthe product pushing, as they called itand redirect practitioner efforts towards meeting client needs.
It is hard to argue with the Consumer Firsts, especially when recalling the financial hustle of the 1990s. If the advisor does not meet the customers needs, the short-term win (of selling product x, y, or z no matter what) can only lead to long-term dissatisfaction, bad word of mouth, and perhaps litigation.
But, as you know, this is a different economy. Today, the tight purse reigns, new product development is in second gear, and markets for some products are thinning out. Today, advisors who are Product Searchers say they do not have roomfuls of customers swarming around, “needing” places to put their money and ways to preserve it.
Customers still have needs, they agree. But now these needs seem to be expressed in reverse. Many people, they say, now say they “need” to stay away from investing (which they deem a frivolity), and away from insuring (which they deem a luxury).
As a result, broaching the subject of financial needs often falls on deaf ears, say the Product Searchers. But sometimes, they add, discussion of a brand-new product can at least open the door.
This is where the discussion gets a little delicate. In todays market, the Product Searcherswhether commissioned, fee-and-commissioned, or fee-onlyhave been forced to admit they have to engage in some form of marketing to bring business into the house.