What You Need to Know
- Investment advisors need clients with significant lump sums.
- Insurance agents can start with relationships based on cash flow.
- Some clients end up turning a little cash flow into a lot of cash flow.
As an insurance professional, you are in the business of helping people. It’s often been said you sell peace of mind. How many times have you heard a prospect say, “I have no money.” Does that mean you can’t help them? Of course not!
Insurance agents have an unexpected advantage over financial advisors. You can start a relationship based on premiums or investments made from monthly cash flow.
Financial advisors are often looking for pools of money. Once people have put away a substantial amount, they can help the person invest it better.
Many financial services firms have tiered levels of service. Smaller accounts are handled by a central department by phone (or an online relationship). The local financial advisor often has a certain threshold as a minimum account size.
How can you help the prospect who says “I have no money?” How can they become a client?
1. Buying life insurance with monthly or quarterly premiums.
The first check usually starts the ball rolling. If they buy whole life insurance, they are building cash value over the long term, in addition to getting protection.
2. Buying health insurance.
Unless their employer provides it, everyone needs it. Retirees need Medicare supplemental insurance. It’s another monthly payment product.
3. Open an IRA.
Most people talk and read about the advantages of participating in your 401(k) program at work. People earning an income are allowed to put additional money aside in an individual retirement account. They are saving. They are reducing their taxable income. Growth they achieve is tax deferred.
4. Dollar cost averaging.
You’ve heard the expression, “Don’t wait to buy real estate. Buy real estate and wait.” If people want to start investing, let them know they don’t need to accumulate thousands before they can take the first step. They can invest the same amount each month. Explain why dollar cost averaging makes sense.