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Practice Management > Building Your Business

Responding to evolving distribution models

By Noah Guillaume

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Last month, MetLife’s individual distribution organization rebranded as the MetLife Premier Client Group. LifeHealthPro spoke with Paul LaPiana, head of the group, to see how distribution models are evolving and what is on the horizon. The following are excerpts.

LHP: What is MetLife’s evolving approach to doing business?

LaPiana: Improving the professionalism of our organization, focusing our advisors on more of a comprehensive, holistic approach to both the wealth management and risk management needs of our clients.

We’re really understanding the needs, the comprehensive needs, of the clients that we serve and we’re bringing them solutions to meet the needs. We’ll figure out the product needs as we get to the right solutions on behalf of the clients. One of the things we’ve invested in is the Client Engagement Model. This is three things:

  1. Standardizes the process of planning with clients – kind of like the CFP six steps of the financial planning process.
  2. Provides a lot of skillset development. We’ve actually partnered with a global training organization to help our advisors get better at developing relationships with clients, asking the right questions, listening to clients so they understand what the clients are truly trying to get done.
  3. Allows a consistent framework for training. First-line and second-line managers have the ability to coach our advisors and help them get better at their practice, make sure they’re addressing weak spots in their practice so that they can be more efficient and effective as a producer for our organization.

LHP: How are distribution models evolving?

LaPiana: It’s interesting. In the last decade I’ve seen distribution start to converge. And what I mean by that is when I started in the business, we were in the life insurance business. And when you got into this type of a profession, that’s what you did predominately was sold life insurance and risk-based type products – some annuities.

Now what distribution is wanting to do is be able to develop relationships with clients, manage their wealth but also address their risk management needs. You see the wire houses and the brokerage firms, who have assets and have relationships, are looking at how do they get the risk management expertise within their organization and there’s various models to help get them that expertise.

What you see in the career, let’s call it the affiliated distribution tied to insurance companies, is that they’ve got the risk management understanding and expertise and what they’re doing is enhancing their broker dealer as well as wealth management capabilities, so that they can attract the assets under management. What you see clients wanting now, you look at the LIMRA studies or you look at any of the studies that come from some of the newspapers, is the client going to trust an advisor? They want the ability to go to one place, trust the individual has their best interest in mind, and then be able to bring the solutions and products – that they’re not tied to any one proprietary product or carrier, etc. – really come in with an objective, independent type of an approach to help them get to where they want to go. It’s mobilizing expertise and the resources around the client so they can meet their goals and objectives.

See also: Redesigning life insurance distribution: How carriers can help

LHP: So there’s a move to a much more holisitic kind of service?

LaPiana: Yeah, I would say that most of the distribution channels that we deal with at MetLife which is one, our MetLife Premier Client Group, which is our affiliated channel as well as the third-party distribution business, are all heading towards comprehensive, holistic planning for clients – not a product – which is about understanding clients’ needs, what they’re trying to achieve, and then providing the solutions.

Some of them are product-based solutions, some of them ultimately get to the product, it’s having the right opportunity to sell, sometimes proprietary products, but also having open architecture so you can sell products that are not a part of your firm, but are through the broker-dealer and on your platform so you’re always looking at what’s best for the client versus trying to drive any one kind of product or service from a company.

LHP: How do you think this will continue to be more dominant over the next five years?

LaPiana: I think with where baby boomers are today – we’ve got 78 million baby boomers, 10,000 a day turning 65 – they control $7 trillion in investables, more and more as those people have to make some accumulation decisions, a lot of income decisions, and a lot of legacy decisions, they’re going to start to – I don’t want to say demand – but I want to say they’re going to expect from their advisors that they’re looking at the entire picture versus looking at only one part of the picture.

Now, one of the ways we’re addressing that is we’ve been, for the last three years, working on advisor teaming. What that means is bringing producers together, advisors together formally as a team because it’s very difficult to address and be an expert in all the aspects of financial planning because it’s just too technical. So we have successful advisors in the risk management area partnering with successful advisors in the wealth management area, together they form a team. They’ve got some infrastructure support folks, sometimes junior partners, that gives them a better platform to address the holistic needs of the clients.

Also … because they’ve got infrastructure to support them, and even junior advisors to support them — you see the service levels go up because the top advisors are focused on getting the client’s work done. Let’s call it phased implementation and the team it supports making sure everything gets done, but also handling service on behalf of the client. I think that’s starting to evolve across the industry – definitely evolving.

The other thing is from a regulatory standpoint. No one knows where the fiduciary standards will end up. I think regulatory may drive some of this but I also think that the right firms from a distribution perspective understand this is the best way to go at it. And if you really have good client connections and relationship … you’re going to be able to have multiple products within the household and you’re going to have a much better and more profitable client relationship, and better retention with the clients that you serve.

See also: Put the life back in life insurance

LHP: What benefits and services can a client expect from the team selling environment?

LaPiana: Well, first of all, the benefit of expertise, which is again having somebody highly credentialed in wealth management and has all of the understanding of what you need to be successful in true wealth management and the same on the risk management side because it’s an entirely separate part of the business and a different process. So I think the expertise level is substantial.

The continuity and relationship with the client goes up substantially, too, because in the event something does happen to one of the advisors it’s not one person and the client. It’s actually a small little entity servicing the client.

LHP: And what kind of benefits can an advisor expect?

LHP: The great news is that they’ve got service behind them so that they can look forward and keep working with clients on the revenue-producing activities for the practice rather than the more service-related work.

The other thing is that you’ve got a life style forum, and you have two or three advisors that allows you to have more balance with your family because, again, it’s not just them. They can actually be out and you have continuity because there are other people working in the practice.

And I think the big one is expertise because if my role on the team is protection and investment management I can go get my credentials: CLU, CHS; I can be involved in the industry associations that are tailored to the risk manager business and I can go see that segment of the market because my partner is doing the same thing on wealth management.

They are understanding the money management platforms, the technology, the aggregation. They’re involved in different industry associations so they can understand a rising interest rate environment, what can happen to access, which is where you may want to do an asset allocation, and just allows people to get much more deep into the profession and be true experts because they’ve got somebody else managing the other side of the business.

LHP: What can you tell me about the consultative approach to client service?

LaPiana: Basically, our consultative approach, which we call our client engagement model, is basically a six-step process that we take clients through.

The first step in the process would be the initial meeting to see if our services are actually something the client could actually use to get him to where they are to where they want to be. It also allows them to interview us, understand a little bit more about our value processes and organization and team they would be potentially working with.

If the client actually decided to move forward they go through a formal data-gathering process where we learn a lot about what their assets and liabilities are, their family records,  what their goals and objectives are for accumulation income, legacy, college education planning.

After that data is gathered, then our team works with some expertise inside our organization — like our financial planning unit, our mixed market unit, some of the product wholesalers if that’s needed — to be able to provide solutions to the client to help them reach their goals and objectives.

The next step is working with the client and any of their advisors, because they have CPAs, attorneys, trustees, to show them that there is never one way to get there.

Then that next step is the implementation so that’s getting documents signed, that’s transferring assets, getting underwritten if you’re buying insurance.

The next step is the service model which is making sure we’re reviewing the plans on an ongoing basis because we have to course-correct as things go on in the environment. Then, in addition to that, it’s just making sure that the clients understand how they’re performing and seeing if there’s anything  changing in their lifestyle that need us to make changes to. So it’s comprehensive, and again it’s not focused on products. It’s focused on needs and helping them reach their needs and objectives.

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