Last month I began a multi-part series in which I hope to acknowledge and congratulate some of the players in this great industry. I highlighted the independent financial advisor as an emerging and impressive participant who has overcome severe odds to become a significant part of the multi-trillion dollar industry.
Whatever you call them (I will use IMO for simplicity), these companies are essentially middlemen or intermediaries between the product manufacturers (insurance companies) and the salespeople (agents and advisors). They are in the business of distributing products for insurance companies through a network of licensed insurance agents.
By way of history, the vast majority of insurance companies that were not comprised of career agents or were shifting away from the career agent model no longer desired to be in the business of recruiting, training and servicing hundreds of thousands of agents. Their core business was in the manufacturing and servicing of the products. Enter the IMO — an entity whose sole specialty was in recruiting and training qualified agents to sell products. They have an attractive financial incentive as they earn a percentage of the aggregate production their agent force generates (otherwise known as an override).
Think about the brilliant creation of the fixed indexed annuity over a decade ago. Would the FIA have achieved such widespread acceptance and distribution without the IMO industry literally carrying it on their shoulders and single-handedly educating thousands of agents about this new, innovative product? I highly doubt it! And as new FIA products have come to market at a rapid pace with intricate features, exotic crediting methods, income riders, etc. the IMO has been at the forefront of introducing the products and, in my opinion, have done an incredible job of educating agents on the latest and greatest products and features.
When you examine the complex nature of the independent agent’s practice and face the reality that he needs to do hundreds of thing right to succeed, the role of the IMO shines that much more brightly. The IMO itself must do hundreds of things very well, including, but not limited to the following:
1. Find and recruit qualified agents who are interested in selling the type of product the IMO distributes.
2. Educate the agent in all aspects of the products.
3. Provide the agent a method of attracting clients, usually through proprietary marketing systems (such as workshops) that they have developed.
4. Provide compliance consulting to the agent to ensure that they stay on the right side of the law.
5. Provide back office support to help serve the daily needs of the agent (proposal generation, product materials, etc.)
6. Oversee the new business submitted by the agents to make sure the paperwork is in good order and transfers happen efficiently.
7. Continue to offer competitive products as they are created, and then building an educational and support apparatus for each new product.
To all of my IMO friends: Keep doing what you are doing, maintain that incredible passion you have and stay as innovative and cutting edge.
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