If you’re still searching for a tried and true market niche on which to build a successful practice, consider one for which there is huge pent-up demand: helping financially strapped boomer parents fund the ever rising cost of their kids’ college education.
So urged Brian Kay, Executive Director of Leads 4 Insurance, Port Washington, N.Y., during a November 9 teleseminar devoted to the topic. The one-hour event explored key advantages of a college funding practice, including an ability to charge a fee for services, generate referrals and repeat business, and satisfy clients’ immediate financial needs.
“The biggest mistake that advisors make is selling future needs instead of immediate needs,” said Kay. “That can mean the difference between earning a modest living for the rest of your career and becoming a 6- or 7-figure income producer.”
Such areas as disability income insurance, retirement income, estate planning and life insurance, Kay added, all bear on future needs and are a tough sell. To the extent that agents focus on these solutions in initial conversations, they create a fall sense of urgency.
A second mistake of agents, said Kay, is that they try to be all things to all people by acquiring a string of educational designations–CLU, ChFC, CFP, among others–that, while building on their professional development, are less critical to their practices than generating a steady flow of referrals and prospects. And the latter requires developing a market niche.
Producers also err, said Kay, by not charging fees for their services in addition to a commission on product sales. The result can be valuable time wasted consulting with prospects who ultimately don’t buy a recommended solution. One reason agents opt not to charge fees is that they are under the mistaken impression that doing so will bring them into violation with NASD or in-house compliance rules. But, Kay observed, such violations only apply to producers who charge fees for investment advice and are not registered investment advisors.
Kay dubbed a fourth mistake as “trying to bag the white elephant,” or being overly focused on building a high-net-worth clientele. While affluent boomers and seniors should be pursued, Kay said the first priority of new producers should be in building a steady business of smaller deals that “pay the bills.”
The fourth mistake leads to a fifth: failure to find and sell to a “starving market”–middle market clients, especially boomers who are raising children, who have an immediate need for the agent’s products and services.
To differentiate their practices, he said, agents have to establish a “magnetic client attraction system” that will satisfy boomer clients’ near-term financial objectives. Enter college funding.
“By building a specialized practice focused on helping parents to fund their children’s college education, producers can more easily generate a relationship with prospects that opens the doors to long-term planning opportunities,” Kay said. “This is how you can correct these mistakes and add an extra $5,000 to $25,000 per month to your existing business with no cold-calling.”