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The Evolving Financial Rep

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It has long been true that successful representatives in the life insurance business serve clients throughout all of life’s stages. For some time, many reps have found that the key to remaining relevant is to take a broader view of clients’ financial needs. Often, this means working with clients in both insurance and investments. It also means thinking a little like a sphinx.

In ancient Greek lore, the sphinx guarded the gates of the city of Thebes, and posed the following riddle to all who sought to enter: What walks on four legs in the morning, two legs in the afternoon, and three legs at night?

The answer, of course, is your client, who crawls as a baby, walks upright as an adult, and uses a cane in old age.

Taking the long view of clients’ needs throughout their lives has always been important. It’s even more critical in today’s quickly changing environment. At a time when people increasingly seek more robust financial planning and integrated product solutions, how can you achieve success? In our view, it requires 3 things:

–The willingness to work under a new paradigm.

–The ability to take a holistic approach.

–The discipline to deliver long-term value and steady, consistent growth.

Paradigm shift

The oft-used phrase, financial services, can refer to a variety of transactions that involve money. But it’s unclear how a client benefits in this world beyond a given transaction. Instead, we suggest that reps see themselves as providing something very different: financial security.

This means, at least in part, instilling in clients a feeling of confidence that they will reach their long-term financial aspirations and goals through the actions they take today. It means helping them do so in a way that protects them from the risks of life while pursuing its rewards in a disciplined way.

How do you get there? The first step, as always, is to fully understand clients’ needs. Today, however, those needs are more varied, complicated and interrelated than in years past. Our research shows that just as many consumers feel uneasiness about their financial security due to gaps in their investment programs as those who feel uneasiness about insurance protection.

But it isn’t simply a matter of adding one to the other–investments to insurance, or insurance to investments. The key is to fully integrate needs, understand the big picture and convey how multiple solutions–life insurance, long term care insurance, disability income insurance, annuities, investments and wealth preservation strategies–all work together.

A holistic approach

Some companies try to tackle the new demands of the marketplace by selling ancillary products to their existing client-base and targeting a middle-aged, relatively wealthy demographic. The right strategy, in our view, includes targeting a younger demographic of prospects comprising doctors, lawyers, business owners, among others. It also takes a holistic approach to serving these clients, recognizing that each has unique needs that evolve over the course of a lifetime.

Reps who take such a holistic approach stand distinctly apart from those who take a more narrow view. Typically, the broader approach begins with uncovering risk-protection needs. After all, the foundation of financial security is to ensure that clients and families are protected against the risks associated with dying too soon or becoming sick or injured.

In fact, financial security is impossible if these risks are not addressed. Then, as clients become older and more affluent, reps work with them on the investment side, helping them accumulate wealth to minimize the risk of outliving their financial resources. Finally, when clients retire, reps help ensure that they have sufficient income and can distribute wealth to heirs and charities in an efficient way–with income distribution strategies enabled by decisions made when they were younger.

Consistent growth and value

As a rep, you should take a consultative approach to client discussions. If you focus only on insurance, you limit the guidance you can provide, in the same way that neglecting or omitting insurance means that a client has no foundation on which to build financial security.

Such an approach underscores the importance of a philosophy and process that includes insurance and investments–both based on principles of risk management. In both areas, good long-term solutions are those that deliver long-term value and consistent growth.

To be an effective provider of financial security, then, neither counsel clients to swing for the fences nor deliver a one-size-fits-all package. Rather, aim to consistently hit singles and doubles by offering savvy guidance with solutions that meet both immediate–and overall–client needs.

If you do your job well, you will cement a bond early, and that bond will last throughout your client’s life. You will create enormous value over the long term and help your clients sleep better at night.

Integrating insurance and investment solutions is not easy. Such integration does, however, offer clients the most attractive solutions to their needs. When it happens, it can mean that fully informed reps work with an integrated set of accounts. Clients receive advisories and statements from a single source. And, more importantly, reps and clients work together to attain true financial security.

The integration of insurance and investments cannot be undertaken lightly, but it is an evolution demanded by the needs of today’s clients. It is one solution that will keep reps relevant and viable in the changing financial marketplace.

In short, integration is an answer to the riddle you face daily. Whether your client is metaphorically crawling, walking or needing a crutch for support, if you can recognize the stage and see the big picture, you can provide the appropriate response that will get you through the door.

John Schlifske is executive vice president, investment products and services, of Northwestern Mutual and chief executive officer of Northwestern Mutual Investment Services. You can e-mail him at [email protected]


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