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Financial Planning > Behavioral Finance

What struggling economy?

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With the persistent sluggishness of the economy and high unemployment rates compounding the complexities of saving for retirement, Americans have become hesitant to plan for the long term. And while most Americans understand the importance of financial planning, many have simply never been schooled in how to invest or save money effectively. As a result, they find themselves ill-equipped to plan for a retirement that realizes their life goals. Even more critical, they are financially unprepared to endure a significant life event, such as a disability or loss of a family member.

With millions of people increasingly unsure of how to plan for their financial futures, there is a heightened demand for access to serious financial advice to help put them on the right track for a solid financial future.

To meet this growing need, mutual insurers are hiring more aggressively than ever before, even as other sectors of the financial services market and additional industries shed workers or are slow to hire. In fact, the financial representative position is one of the fastest growing jobs in America. According to the Bureau of Labor Statistics’ Occupational Outlook Handbook, there were 206,800 financial representatives in 2010, and the bureau predicts a 32 percent increase from 2010 to 2020. This increase is much faster than the average for all other occupations.

The savings crisis

In an era when Americans’ lack of adequate savings has reached epic lows, the role of a financial representative is more relevant and important than ever. By all accounts, America is facing a savings crisis, the likes of which it has never seen.

According to recent Annual Retirement Fitness Surveys from Wells Fargo & Company, a comfortable retirement requires significantly more than it has in years past. In 2010, the “magic number” retirees needed in their accounts was $1 million, which could generate about $40,000 per year of income. However, according to Fidelity, one of the largest 401(k) providers in the world, the average 401(k) balance is now only about $71,500. Unfortunately, this figure cannot fund 20-plus years of retirement.

Certainly, people have more access to financial tools and information thanks to a virtual explosion of online planning tools. Unfortunately, while many of these programs may seem to be a good first step, the quality and credibility of these tools vary widely. Plus, the sheer volume of information consumers can now access has actually complicated the picture, making it more difficult to make the right decisions. In the end, no matter how intricate the algorithm, these online tools cannot substitute for actual human interaction, which can provide the analysis, understanding and compassion necessary to help people meet their financial goals.

In fact, the customized and personal touch advisors provide adds a valuable dimension to the process. Financial representatives can help clients better define their priorities and stay focused on more intelligently utilizing their financial resources. No two clients are alike, and successful financial representatives pride themselves on their ability to build relationships with clients as they share incredibly personal stories, dreams and responsibilities.

Nevertheless, the right online financial tools can aid significantly in the development of a financial roadmap. Several programs out there, some of them sponsored by carriers, allow clients to take a comprehensive look at their specific situation, reduce financial disorganization and provide a successful plan of action. So ultimately, it is the overall combination of the right tool with the skill and personal attention of a well-trained financial representative that can put a consumer on the path to a better retirement future.

The future of the industry

In an interesting twist on the financial representative opportunity, recruiters are actively targeting career-changers, most of whom are people with no previous experience in financial services. Financial representative recruiters are looking for career-changers who are hardworking entrepreneurs, have strong interpersonal skills and are dedicated to helping their clients and making a difference in people’s lives. Guardian Life, for example, is on pace to hire more financial representatives in 2012 than it has in its entire 152-year history, and about 75 percent of those hires are expected to come from industries outside of financial services.

Many carriers are casting a wide net when hiring for this position because the personal connection an advisor has with the client factors so importantly in the financial representative career. Therefore, the candidates’ personality and character traits play more of a role during the hiring process than their resumes do.

For many new-to-the-industry recruits, the financial knowledge will come over time, but the interpersonal and client-relationship skills need to be solidly in place before embarking on the career. To ensure reps have the requisite financial skills, companies often offer intensive, on-the-job training and mentoring. This way, the newly hired financial representatives are able to build their businesses on a foundation of skills taught to them by veterans, who know what it takes to succeed. These training programs help new financial representatives effectively utilize their natural networks and assist them in understanding how to best help clients prioritize their goals and desires.

Selling the profession

What makes the financial representative position well-suited for career-changers and entrepreneurial graduates is that it offers a more fulfilling career and work/life balance than most other industries.

As financial representatives essentially work for themselves, they are afforded flexibility in their schedules to be available when those working 9 to 5 are not. It usually takes three to four years of dedicated effort to build a thriving financial service practice. Once that is done, the financial representative career affords an amazing quality of life that may not be found in most professions.

A great deal of scientific research shows just how important the right career is for individuals to have the most meaning in their lives because, on average, we spend two-thirds of our waking lives in the workplace. The financial representative career is often attractive because it offers autonomy, the ability to make a difference in clients’ lives and the potential to achieve mastery level in the profession through lifetime learning. That’s a compelling opportunity for an increasing number of new entrants.

Growth for years to come

What at one time may have seemed like a staid career path is enjoying unprecedented growth and popularity, and it can provide an excellent alternative for people seeking a fulfilling, new career direction. The result is the strongest and most dedicated workforce the insurance industry has ever seen. And as consumers continue to grapple with the challenges of planning for retirement, expect insurers to continue to hire new financial representatives to provide people with the helpful, meaningful and informative advice clients need to realize a better financial future.

For more on industry growth, see:

Guardian on target for hiring this year

5 ways to get the most out of a mentorship

Maryland exchange builders looking at producers


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