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How Social Distancing Affects Advisors’ Sales: Survey

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Nine in 10 financial professionals in a survey released Wednesday said that not being able to meet with their clients in person because of social distancing guidelines has been the main effect of the coronavirus pandemic.

Three in four of the advisors in the survey, which focused mainly on insurance professionals, said they had been making more of their sales, or all their sales, to existing clients.

The survey was conducted in May among some 400 financial professionals in distribution, sellers of insurance, annuities and investment products, by LIMRA, the Insured Retirement Institute, Oliver Wyman and the National Association of Insurance and Financial advisors.

“For many advisors the human connection is a critical part of developing a trusted relationship with clients,” David Levenson, president and chief executive officer, LIMRA, LOMA and LL Global, said in a statement. “According to our research, nearly two-thirds of advisors are now working from home creating new challenges in the advisor-client relationship.”

Levenson noted that carriers and the industry had helped advisors continue to drive successful client outcomes through customized training and digital tools designed to help them operate optimally in the virtual environment.

The vast majority of advisors in the survey said they had received robust training and expanded communications about best practices for working remotely and leveraging technology.

But what they most valued was the carriers’ and professional associations’ advocacy efforts to change or reduce compliance requirements and enable them to submit business digitally rather than via paper.

Seven in 10 advisors reported that they had increased their communications with clients as the pandemic took hold and social distancing measures came into effect.

Not surprisingly, they said their clients’ top concerns were stock market volatility, cited by 74% of advisors, and low interest rates, noted by 45% of advisors.

Clients were also concerned about job and income security, current and future income stability, and life insurance coverage issues, including whether their policies would cover COVID-19. (The study noted that life insurance policies in good standing would cover COVID-19-related deaths.)

Pandemic Shifts Business Activity

Seventy-eight percent of advisors said they were selling more to their existing clients, including 24% who were selling exclusively to their existing clients. Twenty-two percent reported that they were selling more financial solutions to new clients.

Most Advisors Are Selling to Existing Clients (Chart: LIMRA)

Most advisors surveyed said social distancing had made it harder to find new clients and conduct initial planning activities with them. Advisors said they would value more help with virtual prospecting and lead generation.

“It is not surprising that social distancing measures have impeded advisors’ ability to gain new clients,” said Scott Campion, a partner at Oliver Wyman, said in the statement. “Especially since we don’t know when or how business will return to normal, the industry needs to identify ways to help advisors virtually connect with consumers who need the solutions to achieve their financial goals.”

Challenges notwithstanding, eight in 10 advisors surveyed expressed optimism about their ability to maintain their practices and serve existing clients. While many expected investment and annuity sales to fall less than 10% in the second quarter, compared with pre-pandemic expectations/forecasts, they expected sales of life insurance to remain level.

“While traditionally, our industry has relied on the face-to-face model to help Americans address their financial concerns, the silver lining in all this is we are seeing advisors adapting and leveraging digital platforms to stay engaged with their clients,” Kevin Mayeux, chief executive officer of NAIFA, said in the statement.

— Check out How Advisors Can Help Kids in COVID-19 Times on ThinkAdvisor.


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