Competition for business owners and executives is intense. To prepare yourself to work in this market, you network, stay current on advanced market concepts and access high quality insurance and investment products. But you may still be missing half of the equation needed to provide a complete solution.
Business owners and executives require special attention from financial professionals. This attention is expected throughout the sale and, more importantly, for years later as their business and personal needs evolve. Because of this, you need to ensure the platform upon which the solution is based is efficient, reliable, and provides top-tier service–to both you and your business clients.
Market factors create a service expectation
The service expectations of business owners and key employees are influenced by several factors. The first is the number of small-to-medium sized businesses. Companies with fewer than 1,000 employees represent 99% of all firms in the United States, and encompass 55% of the working population, according to the U.S. Small Business Administration.
In addition, approximately 9.5 million Americans own small businesses. It is estimated that 40% of businesses will change hands over the next 5 years. And 70% of family-owned businesses fail to successfully transfer to the next generation.
Another factor to consider is the connection between business ownership and affluence. According to the LIMRA Finances of the Affluent 2004 report, the percentage of the affluent who own businesses increases from nearly 26% with those having a net worth of $500,000-$999,999 to nearly 70% for those having a net worth greater than $5 million.
Financial professionals can capitalize on the opportunity to help design, implement, and administer solutions and services for business owners and their key employees. It is critical that you convey to business owners the importance of covering the 6 primary areas of financial need: retirement income, exit planning, wealth transfer, survivor income, income protection and business protection. Financial professionals should consider how best to provide objective and qualified support–both during and after the sale, when the resulting plan is implemented and administered–to help prioritize and address these challenges.
Expertise during the sales process has traditionally come from the financial professional and from the carrier’s advanced sales units. Administrative support after the sale has often come from the financial professional or third party administrators. At times, this administrative support is treated as an after-thought, done by individuals and organizations that lack the skills, systems or volume to proactively meet the clients changing needs over time.
Consider a specialized service platform