Recently I got a little upset over a post made by another blogger who positions himself as a financial guru for a specific audience, and my issue with a particular piece he did was based on some serious flaws concerning his framing of the issue.
…but there's some gold that I think comes from people like him (and please understand, this is not one my über sarcastic moments). I'll be bold enough to state that when he and his followers state emphatically that insurance agents are con-artists, they aren't referring to me. They are instead referring to the thousands of fly-by-night agents who get picked up from within the dark and scary gutters that the likes of many an insurance sales manager goes looking. Those attracted to the business with champaign wishes and caviar dreams. Those who have a vision board hanging up over their desk with a sports car and lake-house on it. Those who categorize their clients by the size of the paychecks they produced them.
This got me thinking. I'm frequently told that I do a pretty good job at this insurance stuff. People seek me out and I secure a healthy amount of referral business. So, assuming I at least have it half right (maybe even less), how would I advise someone about finding a good insurance agent? Here's what I came up with as a thought exercise.
I like independent insurance agents, but I can't say that I can unwaveringly recommend them to everyone. Here's why:
Independents can be the sign of a former career agent who learned the business while working as an agent for a big name company who eventually found his or her way into a circumstance that supported a business model that broke away from some of the chains with which a career (sometimes captive even) agent gets tied down (this is my situation). In my personal case, I had an opportunity upon which new agents rarely find themselves. The guy who recruited me (my sales manager) into the industry for a very big name insurance company was in the works of establishing a general agency with one of the big name mutuals (he had been at the helm of a general agency for one of the other big name mutuals for a little over half a decade prior so he had experience in this) and the ink on the paperwork finally dried a few months after I began my practice. He informed me of his impending resignation and I immediately figured out how to join him without violating his non-compete. Most people would have run far and fast away from this, and that's exactly what all the other agents he hired at this company did (they all stayed put). A brand new scratch agency with barely any resources is no breeding ground for an inexperienced agent, or so the seasoned “professionals” who didn't do it that way would tell you. But I look at things differently, so I threw caution to the wind and took the plunge.
What I got in return for this bold move was face time with people I never would have even had a method for contacting had I stuck with the other company. This led to industry resources that most agents don't get unless they decide to join management (I got all the goods, without the headache of senseless responsibilities, for a while).
After a while I left the career system, and haven't been all that upset about the decision. I know emphasize my ability to not care what product or company someone chooses, because I'm under no obligation with anyone to produce a certain amount. If it works for you, it works for me and not the other way around. Sure I have my favorites, but that's because I vetted the bad ones and landed on the ones I consider good.
However not all independent agents comes from this background. Some of them could never get a career contract with one of the big names (too much of a RAP Sheet), or they can't pass the personality profile tests that make them a coveted candidate. Some call themselves independent, but they actually work for a Marketing Organization that
promotes pushes certain products on their agents.
I remember a conversation I had with a Senior VP at the big name company with which I used to be a career agent right before I left. The guy showed up at my agency after the General Agent quit and was “interviewing” each agent. It was more a way to feel out what the agents were planning, and I'm a pretty transparent person. I subtly let him know that my interest in his company was luke warm at best and while they manufactured a quality whole life product (a fact upon which we both agreed) they weren't the end all be all company and there were plenty of other options out there that were–in some cases–better choices for people. I also let him know, in no uncertain terms, that my loyalty remained with my clients first and foremost, and I didn't care what he or anyone at the home office thought about that. As I saw it–and still very much do–at the end of the day, the clients I serve will always treat me better than the companies with whom I do business so long as I do a good job by them.
I bring up this story to highlight that not everyone views their role the way I do. A lot of agents are company guys and gals. There's a certain “quiet company” somewhere in the “north western” United States that is infamous for agents who champion the company and its well being. This paradigm doesn't work for me, and if I were a consumer, I wouldn't be crazy about it (remember the golden rule, it's good to follow). This is a really long winded (sorry) way of saying, avoid the company guy/gal. He/she doesn't have your best interest at heart.
If I had a dollar for every time someone contacted me after that fact and said “I'm not sure I did the right thing here…”
People like to be nice (usually). But picking an agent isn't really a time when that's necessary. You need to stress test their conviction, put them through the paces if you will. The good ones will persevere, the bad ones will go away. And don't mistake temporary (or even faked) success for competence. I sadly know a lot of dumb agents who get lucky and hit a big one and think it's a testament of their skill. There's also a lot of agents that live the traditional salesman lie (they leverage the hell out of themselves to give you the impression that they know what they're doing because they own nice material things, so they must be good). True attributes that signify quality/competence must be costly to fake, this is why grilling your agent is crucial. If you're looking for a good topic, Paid-up Additions are a great topic. I'm going to say something for which every agent out there is going to hate me, but don't be afraid to drag your heels a little bit if you feel its necessary, and never make a move if it doesn't feel right to you–keep asking questions until you've abated all fears and or uncertainties. Some people will move forward with things even when they don't completely get it. This isn't a bad thing, comfort level is entirely up to you, if your agent doesn't respect this, send him/her packing.
Do take caution of one thing, if you choose to drag your feet, don't be offended if your agent deals with more pressing issues in his/her life.
No agent should be afraid of a second opinion. I welcome them (they remove some of the liability off my shoulders when someone else signs off on my ideas, it also opens up referral opportunities for me). People also frequently seek me out for a second opinion, and I have no problem giving it. If your agent freaks out about your suggestion for a second opinion, you need to immediately question the legitimacy of their recommendations.
Here's the annoying part of the advice, you need to learn how to balance all of this. Otherwise you'll accomplish nothing. The internet is a great place for information, but not all of it is great. Still, your agent should be more than capable of comfortably explaining what something means, and why something you find posted somewhere online may be valid or invalid. This is a great test of an agents knowledge and conviction.
Brandon launched the Insurance Pro Blog in July of 2011 as a project to de-mystify the life insurance industry. A specialist in the design and application of life insurance cash accumulation features, Brandon is one of the foremost authorities on the subject of coordinating life insurance cash values in a financial plan.