Turn Banks Into Allies To Pursue The Ultra-Affluent
In the past, to successfully work with ultra-affluent clientele, a top insurance producer only had to distinguish himself from traditional insurance producers–not always a difficult task. Many traditional producers lacked the special expertise, staffing and access necessary to be successful in the ultra-affluent market.
Times have changed. Being the best insurance firm is no longer enough. Todays competition increasingly is coming from new sources, with better access to clients with a high net worth.
In many cases, the competitor might be a private banker. Banks, with their wide range of financial services, can often position themselves as advisors to the ultra-affluent on a range of tax and financial planning issues, not just insurance.
Rather than trying to compete with a bank, it can be far more profitable to find ways to partner with one in selling to high-end individuals. In fact, it may be critical to remain competitive in the emerging environment.
It is important to recognize that all areas of financial services–banking, investments and insurance–are well segmented according to their target market. For that reason, banks may be looking for multiple partners, because one size does not fit all. The agency seeking a bank alliance may also team with a brokerage firm, certified public accountant or other professional firm that can help the bank reach its targeted markets.
Take the time and effort to look beyond the immediate allure of such an alliance. While it might seem to make sense to engage in a joint venture to sell insurance to a banks wealthy clients, the vast majority of such arrangements fail.
It may be easy to get an agreement with a bank to refer their affluent clients to you for their insurance. But capitalizing on it, truly satisfying the need of everyone involved, is much tougher. Selecting the bank partner, structuring the arrangement and cultivating the strong relationships needed between the agency and bank organizations are all critical components of a successful venture.
Selecting a partner. Whatever route you take to a bank alliance, choose a bank with which you share similar clientele, culture, business philosophies, personalities and commitment to the success of the venture.
The chances of success are further enhanced if bankers are trusted financial advisors or at the very least have a strong and influential relationship with their affluent clients.
If the bank is primarily transaction-oriented, its people may not have sufficient depth in their relationship with clients to help you plan a significant insurance placement.
To be successful, you will need buy-in and active support from the banks top management and a system to communicate continuously with those responsible for introducing you to the banks clients.
It is also important to know the banks motivation and expectations for entering into the arrangement. If it is revenue sharing, how much income would be meaningful?
Though revenue may be the primary motivator, understand they also may be looking for other ways to do one or more of the following:
–Add additional value to their client relationships;
–Better position themselves within a specific target market;
–Block other competitors from encroaching on their book of business;
–Become better educated financial advisors overall; and
–Be introduced to your own clients or to other advisors who could help them develop additional business.
Be honest: Are you in a position to help them achieve these goals?
Other questions to ask: