With an aging independent sales force threatening to erode the life insurance industry's primary distribution channel, recruiting young talent is becoming a key priority.
Managing general agencies (MGAs), industry associations and other industry participants are exploring new ways of attracting younger advisors in order to ensure clients will be looked after and sales will continue as older advisors leave the business.
"We're an aging industry, and there's a real scarcity of new entrants into the business," says Nancy Allan, executive director of Independent Financial Brokers of Canada in Mississauga, Ont.
One MGA is tackling this challenge through a new initiative that brings elements of the career agency distribution model to the independent channel. Specifically, Kitchener, Ont.-based Financial Horizons Inc. has launched a new division called Continuum Financial Centres, which combines succession planning and recruiting.
Through the program, the firm is offering to buy books of business from senior advisors who are preparing to retire or move into a different role. Financial Horizons then amalgamates those advisors' blocks of business into branches across the country, then recruits new advisors to service that business.
"We're trying to amass blocks of business from multiple brokers and almost build branches, like the old [career agency] style, into which we can then recruit new brokers," says Charles Cuffari, senior vice president of Financial Horizons' retail division and president of its mutual fund subsidiary, Excel Private Wealth Inc.
Efforts to recruit new advisors in the life insurance industry have declined over the past two decades as distribution models shifted. Historically, many life insurance companies invested heavily in recruiting and training new advisors within their dedicated sales forces - and some firms still do.
As the independent channel became more prominent, however, most MGAs have focused on recruiting experienced insurance advisors rather than rookies.
"The majority of MGAs are not bringing in green agents; they are not licensing new advisors," says Roland Chan, director of operations at MGA LiLand Insurance Inc. and founder of Find BoB Ltd., in Toronto. "It's a problem."
Now that MGAs' sales forces are aging, those agencies are recognizing the need to invest more heavily in recruiting and training.
"We have to bring younger advisors in," says Cuffari. "We've supported our existing brokers with training and we've done mentoring, but we have not been actively pursuing the recruiting of new brokers. That's what we're trying to do now."
Attracting new advisors has its challenges, however. For example, many people have a negative perception of life insurance sales. "The image [of the career] is bad," says Mary Art, director, distribution and technology research, with Windsor, Conn.-based global insurance association LIMRA International Inc. "That makes recruiting very hard."
Furthermore, given the intense pressure to prospect and sell policies in the early years, many new advisors don't last long in the business.
Financial Horizons' branch concept aims to make those early years easier for new advisors. Each branch will have a hefty roster of existing clients that rookie advisors can approach.
"We're utilizing these [existing] blocks of business to eliminate the prospecting problems that young brokers have," says Cuffari. "The clients will already be there."
The branch format also aims to provide new advisors with direct access to support, training and a collaborative environment. "[The insurance business] can be a lonely place if you're just a young agent on your own. You don't have anyone to bounce things off," says Cuffari. "There's a sense of community in a branch, which can facilitate growth [of rookies' client rosters]. And we can have the resources there to help [rookies]."
Advisors who are selling their book of business are encouraged to stay involved and introduce clients to the succeeding advisors in order to facilitate a smooth transition for both the new advisors and clients.
One problem with recruiting new advisors to serve existing clients, however, is that those young advisors may not have developed the skills necessary to solicit new clients, says Jim Ruta, a former executive agency manager who is now a career coach with Toronto-based www.JimRuta.com and a video columnist for Investment Executive.
"If you don't bring people in who understand that their job is to find business, then you start creating caretakers of business and not developers of new business," says Ruta. He says it's vital for new advisors to receive training in prospecting.
Another strategy for recruiting talent involves helping young advisors connect with established advisors who are starting to think about succession planning.
Chan founded Find BoB in 2014 as way of facilitating those connections. The service is an online marketplace in which advisors can create a profile and browse the profiles of other advisors who may be looking for a succession partner.
"We need to help those advisors who are trying to get into the business, or trying to build a practice, to partner with [senior] advisors," Chan says.
Perhaps the biggest challenge is motivating young people to pursue a career in life insurance. Although research from LIMRA shows that young advisors enjoy their careers, the industry needs to do a better job of communicating that message to other potential candidates, Art says: "I think companies need to get the word out about the positive aspects of the job."
For example, she says, conveying that insurance advisors play an important role in helping families while also earning a generous income tends to resonate with young candidates.
LIMRA launched a mobile app last year to help companies engage younger candidates. The app, called Recruit2Go, asks candidates a handful of questions about their values and career goals and, based on the results, highlights the aspects of a career as an insurance advisor that would align with a candidate's goals. Insurance companies and MGAs can use the app as a recruiting tool at career fairs and elsewhere to drive interest in insurance jobs.
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