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NAILBA’s David Long: broadening membership, advocacy & education

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Independent brokerage agencies, like the life insurance and financial service professionals they cater to, are facing an increasingly challenging business environment. Industry consolidation, legislative and regulatory developments — not least the Department of Labor’s proposed fiduciary standard — and the sharing of industry best practices are ever more urgent priorities for stakeholders in the wholesaling/distribution space.

Among them: The National Association of Independent Life Brokerage Agencies, which is holding its 2015 annual meeting in Orlando Nov. 18-20. In advance of the gathering, LifeHealthPro Senior Editor Warren S. Hersch spoke with NAILBA Chairman David Long to explore professional development and advocacy initiatives underway at the organization. The following are excerpts.

Hersch: How would you assess NAILBA in terms of its financial health, standing in the industry, and ability to advance advocacy and professional development objectives? 

Long (shown at right): NAILBA is very strong financially; we have reserves that would probably be the envy of most associations. Also, our standing in the industry is excellent. We’ve achieved great recognition from both partner associations and the industry generally over the last several years. We’re also enjoying greater industry prominence as independent brokerage firms have grown their market share of the life business.

Our membership ranks have, however, shrunk over the past couple of years from about 350 companies to 320. NAILBA is not immune to the mergers and acquisitions that have increased as the first generation of brokerage agency owners retire from the business. But the membership has not adversely impact our budget.

Hersch: Just to clarify, the decline in membership is the result of mergers and acquisitions within this space, yes? 

Long: Correct. The first generation of BGA members range in age from 65 to 85. So you’re seeing retirements and not all of them have a successor. Some of them are selling their agencies, merging them with other agencies or shutting their doors.

To compensate for the industry’s consolidation, we’ve adjusted admission criteria to allow organizations that previously were not eligible to join: online distributors like SelectQuote, carrier-owned agencies and direct marketers affiliated with LIDMA.

Hersch: And how is NAILBA adjusting to meet the industry’s professional development and advocacy needs?

Long: Our ability to advance advocacy objectives had leapt forward. We’ve partnered with the AALU [Association for Advanced Life Underwriting], which has a huge advocacy team at the federal level. Most recently, we issued a joint comment letter opposing the Department of Labor’s proposed fiduciary standard.

On the professional development front, we developed a strategic plan a year ago based on a deep-dive survey of our members. The result is cutting-edge educational content that better reflects what our members are looking for. At this year’s NAILBA 34 annual meeting, for example, we have breakout workshops on digital marketing and how to get Gen Y to buy. We offer similar program content at our agency successor-networking group, which is comprised entirely of second-generation members at existing agencies.

We also continue to deliver traditional content, such as the future of long-term care and our risk appraisal forum. We’re also lending a greater focus to multicultural marketing, as the nation’s demographics shift to a more multicultural society.

Part of the strategic plan is to do more outside of the annual meeting. So we’ll be repurposing a lot of workshops at NAILBA 34 as webinars for agencies that can’t make it to the annual meeting. We’re also developing new webinar content.  

Hersch: Which advocacy issues are top-of-mind for NAILBA’s leadership in 2015?

Long: The DOL proposed fiduciary standard remains front-and-center for our members, in part because we see no need for the new rules. There is no quantitative evidence that consumer complaints about retirement plan advisors space are increasing.

Secondly, the [DOL proposal] reflects a lack of understanding of financial markets and consumer behavior. For example, DOL representatives say they don’t want to end commission-based compensation.

However, they cite the U.K.’s [Retail Distribution Review] — which banned producer commissions in Britain starting in 2013 — as an example of the changes they’re striving for. The changes in the U.K. have drastically reduced the number of agents and advisors in the business, as well sales of life insurance products.  

The industry is already experiencing a shrinking and aging workforce. The DOL proposal, which represents a barrier to entry for new producers and a reason for industry veterans to leave the business, will only worsen the retirement savings crisis the middle market is now facing.

There are tens of millions of people in the mid-market who don’t have life insurance or are underinsured. And the vast majority of them say they want to speak to a financial professional and get advice. The DOL’s fiduciary proposal will only exacerbate the problem — no question. If commissions are gone, producers will only be able to work with clients who can afford to pay them an hourly fee; that won’t help the mid-market. Many can already barely afford to pay policy premiums, let alone a fee for advice. 

Hersch: What strategies will NAILBA be employing in the year ahead to secure its professional development and advocacy goals? And what challenges might impede the organization’s ability to achieve them? Long: Looking forward, we’ll be entering the second of a three-year strategic plan. We’re going to stay focused on providing educational opportunities to our membership throughout the year, including new content delivered via webinars. We’ll also be reaching out to professional educational sales organizations for some of this content.

We’ll likely start off with a webinar per quarter, then work up to as many as two or three per quarter, as progress is made throughout the year. Also, we’re just about done with a revamp of our website, which will facilitate a lot of the new educational programming.

Best practices we’ll be focusing on as part of the professional development initiatives will be of particular benefit to second-generation agency owners, many of whom need assistance in navigating issues — producer compensation, human resources, business operations and so on — that are top-of-mind for a growing brokerage.

Turning to advocacy, we’re continuing to partner with the AALU on issues of common interest nationally. We’re also identifying areas where we can partner formally with NAIFA [National Association of Insurance and Financial Advisors] on local- and state-level advocacy issues.

In sum, we’re much more focused than previously on joining forces with sister organizations to advance objectives of mutual benefit.

Hersch: How is NAILBA evolving longer term to better meet the professional development needs of its members and to attract new members? 

Long: We’re doing our best to anticipate industry changes. That means, among other things, opening up the association to different types of distributors. The “L” in NAILBA stands for life, but we’ve always been a life/annuity/health insurance organization for distributors.

We think we need to start welcoming a greater variety of brokerage firms across all three markets. We want the market to understand that, if you are a distributor, NAILBA is the place to be. And we have content that will be valuable to your agency. 

Hersch: Which organizations have a larger presence within NAILBA than was the case previously? 

Long: The largest segment in terms of membership growth includes existing members of the Life Insurance Direct Marketing Association or LIDMA, which formed because their members previously couldn’t join NAILBA. Whether you’re a vendor, carrier or distributor, you can now be a NAILBA member. Since revising our membership requirements, we’ve also brought on board several carrier-owned agencies.

These are, we think, changes for the better — and changes we have to make because the business is changing. It took a solid decade of work to get to this point. Our efforts have so far been very successful.  

See also:

Preview: How to get Gen Y to buy insurance

The LTCI focus at NAILBA 34

Why the insurance industry needs digital marketing




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