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Making Cross-Selling Part Of The Reps Daily Routine

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Many say the ability to do it is ‘critical,’ but far fewer consider themselves successful at it

Raymond Adamson minces no words on the subject of cross-selling.

“If you’re focusing only on one aspect of your client’s needs, then you’re leaving yourself open to competition from another advisor who will offer your client a full-service approach,” he says. “The fact is many clients want a single point of contact for their financial services.”

Adamson, a vice president and senior coach at The Covenant Group, Toronto, Ont., stresses that cross-selling is key to boosting the insurance professional’s productivity and profitability, and to enhancing client relationships. Those who don’t market ancillary products, he adds, risk losing the client’s business.

Most advisors evidently agree, but few are acting on their convictions. Citing a survey of the independent research firm Axis Consulting, Adamson notes that 94% of insurance advisors believe that the ability to cross-sell effectively is “critical.” But only 46% consider themselves successful at cross-selling.

That may true, at any rate, for advisors whose primary focus is on insurance products. But registered reps who engage in comprehensive planning say that discussion of varied risk management products is all but essential when conducting a financial needs analysis.

“Cross-selling becomes almost a byproduct of having done the analysis,” says Kevin Rex, a principal at Summit Financial Partners, Parsippany, N.J. “My approach is to evaluate the client’s situation from four standpoints: law, taxes, investments and insurance.”

To that end, Rex determines future cash flow requirements, then poses “what-if” questions to measure the financial impact on long-term goals and objectives. Where risk exposures exist–the inability to meet critical illness or disability expenses, replace lost income due to the breadwinner’s death, fund nursing home care, etc.–Rex will advise plugging the exposure with an appropriate policy.

Advisors themselves risk exposure to lawsuits when they don’t cross-sell, according to Bryan Beatty, a financial planner and registered rep at Egan, Berger & Weiner, Vienna, Va. Says Beatty: “Someday, some folks will wake up to find their inheritance affected. They’ll say: ‘This [financial need] is something that my advisor should have broached with me. Why wasn’t it?’”

Which products lend themselves best to cross-selling? Reps say that largely depends on the client’s financial situation.

Experts urge, for example, that reps discuss long term care insurance with boomer clients who are over age 50 and have substantial assets to protect. Thomas Winter, an advisor with Legg Mason Wood Walker, Newport News, Va., finds that LTC and life insurance are among the easiest product combinations to pitch.

For young couples with children, particularly those with limited financial means, Rex will often suggest pairing mutual funds with term insurance. More affluent parents who wish to begin funding their child’s undergraduate education might also benefit from having a 529 college savings plan.

But Rex observes that other investment vehicles, including cash value life insurance, deferred compensation plans and stock options, are better suited to funding other anticipated expenses (e.g., a child’s graduate-level education or wedding). The reason: The parents might ultimately decide not to pay for these expenses, leaving them free to use the invested assets for other purposes.

Beatty suggests discussing investments before life insurance because of negative perceptions about the insurance industry and the stereotypes that many prospects still hold about life insurance agents. He calls to mind the image of the slick salesman who is fixated on pushing product, irrespective of the client’s financial needs.

When the investments reside in the insurance products themselves, as in the case of variable universal life policies and variable annuities, the presentation may be streamlined. Beatty says he commonly advises affluent clients to establish and max out contributions to an IRA or Roth IRA account, then invest supplementary assets into a VUL policy.

Advisors might also highlight how a life insurance policy can protect IRA assets against the ravages of estate taxes. Willy Gevers, president of Gevers Wealth Management, Issaquah, Wash., describes IRAs as “ticking time bombs for beneficiaries” because, excluding applicable deductions and credits, they can reduce account balances for beneficiaries by nearly 50%.

[Note: Prospects for permanent repeal of the estate tax remain uncertain. As reported in the June 27, 2005, issue of National Underwriter, Democrats and Republicans in Congress were unable to reach agreement on an amendment to an energy bill filed by Sen. Jon Kyl, R-Ariz., that would raise the threshold for taxing estates to $10 million per person; estates above that level would be taxed at the 15% capital gains rate. Under the Economic Growth and Tax Relief Reconciliation Act of 2001, the threshold on the exemption rises through 2009. The tax is completely eliminated in 2010, then returns in 2011 with a $675,000 exemption and a top estate tax rate of 55%.]

Pension plans are equally vulnerable to the estate tax–and to company policy. Common to such plans, Gevers says, are provisions stipulating that if the plan participant dies before age 55, the surviving spouse will receive only a small fraction of the pension earned by the employee.

To guard against that eventuality, Gevers often suggests supplementing the pension with a term or permanent insurance policy. He frequently also will recommend purchase of an insurance policy to assure beneficiaries adequate liquidity upon death of the insured (e.g., to cover the balance on a mortgage or estate taxes on real estate) and to help clients properly diversify investments.

Cross-selling is often viewed as most effective when applied to the subset of clients with whom advisors can expect repeat business. Frank Surette, a registered rep and career agent at MassMutual, Springfield, Mass., thus classifies his clients according to their business potential.

He devotes most of his time and resources–at lunch meetings, baseball games and other social functions–with his best (or ‘A’) clients. Individuals classified as ‘B,’ ‘C’ and ‘D’ clients are accorded progressively less attention.

When meeting with prospects, Surette also makes certain to detail the spectrum of products and services he offers. Early in his career, he wasn’t always so diligent. The result: lost business.

Surette cites one client who purchased a life insurance policy from him but owned a pre-existing disability policy through a carrier that Surette didn’t represent. Some months later, the client purchased another disability policy from a different agent. When asked why he did that, the client said he didn’t know that Surette also sold disability insurance.

“When dollars start flying out of your pocket because you haven’t acquainted the client with your full portfolio, that gets your attention,” says Surette. “You’ve got to tell them what you do!”

This article originally appeared in the July 2005 issue of Registered e-Report, an online publication of National Underwriter Life & Health. You can subscribe to this e-newsletter for free at

Cross-selling is key to boosting the insurance professional’s productivity and profitability, and to enhancing client relationships

‘When dollars start flying out of your pocket because you haven’t acquainted the client with your full portfolio, that gets your attention’


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