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Today we've all sorts of goodness to bring your way on the Financial Procast. I'll be honest, sometimes it's a real struggle to find three or four things from current financial industry news that are worth talking about.
Sure, for the last six months or so, there is a veritable plethora of PPACA (Obamacare) news but we sort of figured that's being covered by every news outlet under the sun already. And it's really a politically charged story…which we generally like to avoid because it's a lose-lose situation.
All that being said, what do we have in store for you today? Read on to find out…
Northwestern Mutual is on a hiring spree…again
Yep, just like we reported back at the beginning of 2013 it seems that Northwestern Mutual is fond of floating press releases touting their grand initiatives to hire a ton of new agents in 2014.
In a statement from the company on January 15th, they announced that they will seek to recruit more than 2,700 financial representatives and 3,700 financial representative interns in 2014, making it the most ambitious recruiting effort in the company's 156-year history.
Well, isn't that special.
The company's vice president of field growth and development, Steve Mannebach, said:
There's a high demand for trained financial professionals, and our forecasts show that demand will continue to climb in the forseeable future. With the market uncertainty and confusing options, people are seeking guidance and clarity in their long-term planning.
Lest you be confused by the rhetoric, “financial representatives” are life insurance agents. Just to be clear.
Honestly, none of this is news. All life insurers seek to grow their sales force and it's easy for them to do. Why you ask?
Because it doesn't cost them much to expand. Remember they're not paying any of these new people a salary. These new financial representatives/agents will all be commissioned salespeople.
So, what's more interesting to us is what Northwestern says about where the recruits will come from. They expect that more than half of the new “hires” will be career changers, or professionals who believe they've reached the ceiling in their current occupation are looking for more opportunities to grow.
There's gold in them there hills!
Or better still, there's gold in those cubicles you left behind at your old job. All those people you worked with, are loosely acquainted with and all the people they know are prime prospects for Northwestern.
Sure, most of the new recruits will wash out in the first year but not before the company picks up a truckload of new business that costs them virtually nothing to obtain.
This is their most effective marketing strategy. It's not television commercials during the super bowl or full page spreads in the WSJ, it's much more grassroots, boots on the ground. Their business is a recruiting business and the machine requires constant feeding.
Social Media Probably Won't Work
That's a pretty bold statement…right?
Every coach, strategic marketing planner, etc. is telling financial professionals that they have to be everywhere on social media. They need to have a strategy for dealing with it and it can be a great way for them to get new clients.
Uhhh….probably not.
A recent article written by Kristen Luke of Wealth Management Marketing for Investment News tackled this issue head on. I'd like to link to the article directly but unfortunately it's hidden behind a registration page and I can't link to it directly.
Since I can't link to it I'll briefly summarize the points she made (which are spot on):
- You'll use canned content–Posting to social media channels is a lot like work and most advisors aren't going to dedicate the time it would take to pull it off with any regularity. Ms. Luke says, “Posting generic content on social media is a huge waste of time and money since it is the same information everyone else is posting and is guaranteed to be uninteresting to your prospective clients.
- You aren't willing to put in the time–Despite what you might think, it's not free. While it may have no hard-dollar cost, social media marketing takes up vast amounts of time and the payoff is slow, painfully slow. You have to build your network, engage regularly with your network, find interesting things to say, and be relevant. The time commitment is substantial.
- You'll connect with the wrong people–I've seen this so many times with different businesses and their social media efforts. At some point, you'll be patting yourself on the back for having 1,000 facebook likes on your business page or something like that only to realize that most of the people who “Like” you are really your competitors. It's fine and natural to have friends in your industry but if you're pouring time into a marketing strategy you really want to make sure you're talking to your potential customers, not educating your competition.
All excellent points and certainly things that we (Brandon and I) have experienced firsthand. In fact, there have been many an occasion where people have asked us to layout our strategy for the Insurance Pro Blog and we don't have any big secrets, it's all out there for anyone to see.
And someone could certainly do the same thing that we've done; however, it's not easy to duplicate. There's no initial payoff. In fact, I'd tell you that you can look forward to consistently publishing content for months having very few people read it or engage with you at all.
There was a time that we mused we were really just having a conversation with ourselves. Admittedly, it's tough to keep pushing forward when it seems no one cares. What starts as a great idea, full of possibilities, quickly begins to feel a lot like work.
Nothing wrong with working at it, but we think that's the part that everyone touting social media as THE thing misses the boat.
Let's Raise the Minimum Wage…That'll Fix It
I'm guessing after this story none of you will accuse of being liberal anymore.
Is raising the minimum wage really the answer to solving the poverty problem in our country?
We found this story from back in August of 2013 and thought it would make for interesting fodder on the Financial Procast. I encourage you to click that link and spend five minutes reading the article, it's super short.
These sorts of debates among politicians always leave me scratching my head and wondering, “Are they really that dumb or are they just pandering to what they think is their constituency?” Could be a bit of both I suppose.
It seems that too many people just don't understand basic economics and the law of supply and demand. I was a history major, so I don't claim to be the smartest guy in the room when it comes to economics.
But…
I do hire people on a fairly regular basis to do any number of things from lawn care, administrative office work, cleaning, transcription services, etc. and there is a maximum that I'm willing to pay for all of those services.
I'm capable of performing them all but I choose to hire that work out because it leverages my time to work on more profitable endeavors. However, if I ran a business that was dependent upon labor to operate and I couldn't sell my product at a price that the market was willing to pay, I'd soon make the choice to shut down my business.
Businesses must generate a net profit, otherwise what's the point? And if I shut down my business because I can no longer generate a net profit, all those people I pay to perform various tasks will no longer have a job. They're problem won't be having a job that pays too little, they're problem will be not having a job at all.
If I pay someone to do something and they don't like what I pay them, they are more than able to attempt a negotiation with me for a higher wage. And if we can't reach an amicable agreement, they're more than free to seek employment elsewhere.
All Annuity Agents Must Die or At Least Wish They Were Dead
Please go and read this article. You really have to so that you can put into perspective what we're talking about in this discussion.
There are so many things I could write hear but I really want you to listen to our podcast and to what we have to say on this topic. Just remember, there are bad people in the world regardless of how much we regulate a product/industry.
Annuities Don't Hurt People, Bad People with Annuities Hurt People!
If you'd like to discuss the particulars of your situation, feel free to contact us, we're always willing to help.
