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Practice Management > Building Your Business

Wheels and deals

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Self-professed gear head Russell A. Smith began his career as a life insurance agent for a large Midwestern insurance company. He spent his days knocking on doors and his nights serving up hearty helpings of Budweiser and Corona.

“That only lasted for about five months because I recognized that I could do much better with my day job. So I quit the bartending job and concentrated 100 percent on my day job,” Smith explains.

He devoted himself and his time to learning everything about the financial services industry and wound up working in a bank lobby where he sold insurance products to bank customers, which he likens to “shooting fish in barrel.” It was his time spent in the bank – and with the bank’s senior customers – that led him to a practice dedicated to seniors.

So in 1992, Smith kicked open the doors to his practice, Torimax Financial Group Inc. in Canyon Lake, Calif., which has blossomed into a $17 million financial planning company dedicated to serving seniors.

Senior Market Advisor: What attracted you to the senior market?
Russell A. Smith: Well, there are several aspects. No. 1, it’s daytime work. In the regular insurance business, if you are dealing with the average family, you are meeting with them in the evening. That takes away from family time and I didn’t really like that. But seniors are retired, so it is daytime work. More importantly, though, they need the help, they want the help and they appreciate the help. My clientele are also friends of mine.

SMA: How is your business structured?
RAS: There are two aspects to my business. The corporation is Torimax Financial Group, which handles primarily all of the fixed insurance business. I also have R.A.S. Financial Services, which is a sole proprietorship, focused on the registered rep side of the business – mutual funds, variable annuities and the like.

SMA: Are you fee based or commission based?
RAS: Primarily commission based. But I will say that we’re making more of a transition to the managed money fee-based-type planning.

SMA: Do you see that as a trend in the industry?
RAS: If you believe the press, it is a trend, but I think it depends on the situation. I read a statistic that only about 3 percent of the population really needs full on financial planning. I don’t know whether that’s true. We take a financial planning approach with all of our clients. We try to identify their needs, goals and objectives. Then and only then do we offer up a course of action. But more and more, I see that the fee-based approach makes sense for long-term savings.

SMA: How do you attract and retain clients?
RAS: We retain our clients with an exemplary level of service. We’re there for our clients when they need us. We stay in constant contact with them quarterly. We do a monthly newsletter mailing, we do anniversary letters and we do client appreciation events. We really pay attention to maintaining our existing clientele.
That’s how we get referrals.

A large part of our business is personal referrals – but we don’t ask for referrals directly. We promote the concept that we accept referrals through something like this: Every time we talk to a client, at the end, whether it be in person or on the phone, whether it be me or my assistant, we close with something like the following: “By the way, I know you’re not thinking of anybody right now, but if you knew of somebody that could benefit by talking to us, you’d refer them to us, correct?” And we wait for the affirmative response. It’s always, “Well, of course we would.” So we plant that seed that we do indeed accept referrals and, by goodness, we get them.

The other thing we do is some prospect mailings. We definitely market to our prospect list, but the personal referrals are a major part.

SMA: How do you incorporate seminars into your strategy?
RAS: At one time we did them on a regular basis, meaning twice a month. Now we do them as needed – maybe once a quarter or every six months. There are a lot of people doing seminars. Prospective clients have become very circumspect.
Therefore, we’re selective when we do seminars.

The last part of it, and the part I’m really trying to develop, is I’m trying to gain clientele in the areas of my personal interests. I’m a gear head, which means I’m a car nut – actually, a hot rod nut. I build them, I buy them, and I show them. I really like that. It’s really fun for me. I found that I can use my love of hot rods to market my business.

SMA: Can you explain how you market at car shows?
RAS: For example, I will go to a car show with one of my cars. I will have a placard on an easel in front of my car and on top of it, it says ?owned by Torimax Financial Group.’

SMA: How do people respond?
RAS: It prompts a question, “What do you mean it’s owned by Torimax Financial Group?” I’ll tell them that I am a financial planner and the thing I love most in life is playing with cars. And I use this as advertising. It leads to a conversation. Many of the people that have worked on my cars in the past have become clients. Many of the people that look at my cars – well, one person in particular that bought a car from me – wind up becoming a client. Other people that – I will call them spectators – go to car shows just to look at the cars have become clients.

SMA: What percentage of your new business comes from marketing at car shows?
RAS: I would say probably 10 percent. It’s getting better as I go to more car shows. I get a little bit bolder in talking about it. I did go to a car show recently and I set up a small table. What better way to break the ice than through a common love of hot rods and cars?

SMA: What makes you a successful salesperson?
RAS: Our method of doing business. For example, when somebody comes to me as a result of a seminar or a referral, we just make a rule that there are no applications filled out, no paperwork, no money changing hands on that first appointment.

SMA: Why did you take that approach?
RAS: We figured out a long time ago that if it is a good idea today, it’ll be a good idea tomorrow and the next day and the next day. And yes, we do lose some opportunities because a lot of times people are ready to strike now – act now while the fire is hot – but we just decided to take a different approach. And we’ve just found that it works well. We take a consultative approach. We help clients identify their needs, goals, wants and objectives; then we let them know that we’re going to develop a plan. We present that plan; then and only then do we let them make a decision.

I do tell them, “Listen, I’m not going to pressure you for a decision. I’m not going to hold a gun to your head or twist your arm or in any way pressure you to make a decision that you’re not ready to make. But I am going to prompt you to make good decisions. If your situation is such that you need to make some changes in order to meet your goals, needs and objectives, then I’m going to prompt you to make that decision. But we understand that it is your money, not our money, and we understand what the word ?no’ means.” If that’s the end result, the worst thing that happens is that you made a new acquaintance, a new friend, a new resource for information.

Many times we don’t get the client on the first, second or third appointment, but a year or two or three or four could elapse and they come back to us. That’s because we stayed in-touch with them.

SMA: As part of your strategy for your clients, how do you position LTCI? Is it a big part of what you do?
RAS: In 1995 and 1996, it was a very large part of our business and then I don’t know what happened, but we kind of drifted away from it. I wound up entering into an agreement with another agent that would do all the LTCI for my clients. That worked for a time, but she decided to move on. So we are re-assessing that area. We’ve kind of let it go by the wayside, but we definitely need to pay attention to that because that is just a huge piece of the financial planning puzzle.

SMA: How are you planning or strategizing to accommodate the needs of the baby boomers as your next group of seniors?
RAS: I’m going to go back to one of my original statements about why I work with seniors. Because they need the help, they want the help and, most importantly, they appreciate the help. Many of the younger people that I work with – and I do have a handful of 40- and 50-year-old business owners – think they are more intelligent than they really are. It’s hard to work with them because I will make a suggestion and they will jump on that and say, “Well, this will probably be a better way to do it.” So, I am not really comfortable working with my age group because they have different ideas.

Perhaps they haven’t figured out their mortality and that safe money investing is probably a better way to go for long-term wealth. I haven’t found the secret to working with them yet, but I believe as they mature, as they get older, they are going to have a transition in their thinking and they are going to recognize that safe money investing – the plain old vanilla stuff that we do – has an attraction. It’s probably good to mention this right now – I’m not looking to grow my business much larger than it is.

SMA: Why?
RAS: Because I’m comfortable. I work basically 7:30 to 3:30, four days a week, Monday through Thursday. I work a half-day on Friday. I deal with my existing clientele with the new prospects that we get. I’m not looking to make a heck of a lot more money. I just want to maintain my comfort and take care of my family and continue my industry involvement. My industry involvement is very important to me.

SMA: What is your advice on the secret to success?
RAS: Diligence and sincerity. No. 1, you have to be sincere. You have to like what you do. You have to believe in what you do. And then you have to be diligent in getting that message out, whether it be public seminars or really working personal referrals or whatever it might be. That sincerity has to be there.

You have to be diligent in advertising it. You have to have a road map. You have to know where you are and where you want to go. You have to have a prospecting system in order to get clients that you can talk to in a favorable basis. You have to have a management system where you can manage your clients and stay in contact with them. You have to have a belief system. You have to believe in what you do and you have to demonstrate that belief in owning the products you offer.

SMA: What worries you about our industry?
RAS: The regulatory environment is scary. The tax reform package is very scary. Taking away the tax-deferred status of annuities and trying to fit them into the three different savings plans that they are proposing is very scary. They lose sight of the long-term financial security that only the insurance industry brings to the table.


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