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February 29, 2008 at 07:00 PM
I feel it is high time to give accolades to some of the “players” in the multi-trillion-dollar financial services industry players that I think have overcome incredible odds to achieve great success. I will highlight a group this month and several different groups in future articles as well.
The first group that I think deserves a standing ovation, a group that I have proudly been a part of since the beginning of my career, is the rapidly growing segment of our industry labeled as independent financial advisors. We, the “independent” financial advisors, proudly distinguish ourselves from a variety of competitors, from the career agent to the wire house broker to the bank channel advisor. And we have certainly made an incredible impact in the industry.
Let’s step back and engage in a tiny history lesson. The most dominant financial players in our industry until about 20 years ago were the stockbrokers affiliated with the large Wall Street brokerage houses. They dominated the securities and asset management side of the business for the bulk of the last century.
On the insurance side, the career or captive agent sold the lion’s share of life insurance annuities, and other insurance products. These agents were well trained by the home office and came equipped with a slew of proprietary products they were proud to represent.
Something happened in our industry over the past 20 years, nothing short of a “David vs. Goliath” story. Financial advisors and insurance agents began migrating, albeit slowly at first, to the ranks of a new breed of financial professional that was essentially inventing itself on the spot. This new breed would suddenly be freed from the clutches of proprietary products, sales quotas and strict orders from the top. That was the good news.
The bad news (and frankly the massive uphill battle that began) was that the newly independent advisor was now left on his own to do the following:
1. Build an office infrastructure that could support the daily requirements required from a financial/insurance office … this of course includes the hiring of staff, computer purchases, renting office space, etc.
2. Establish distribution channels so as to access products and services for their clients
