Where will you be when money is on the move? Will you be positioned properly with a significant number of clients when they experience a life-changing event? Are you staying in touch so that you are their go-to person when those life-changing events take place as they surely will?
According to a 2008 study by the Bureau of Labor and Statistics, half of people age 55 to 64 had an average tenure of less than 9.9 years. They may have retired or just changed jobs. Either way, over half of those surveyed could have moved money from their qualified plans from age 55 to 64.
There are 108 million Americans above the age of 50 according to the latest data at the U.S. Census Bureau. Establishing a relationship with the client at any level with any product positions the producer so that when the money moves, that producer will have an excellent chance of doing further business with that client.
What will establish the relationship? Any amount of assets under management is one answer. It is very dangerous to take the exception for rules and make them a rule. We hear of advisors who only take larger quantities of assets or they don’t want the client. What is not discussed is how they are able to do that.
For those of us who are not in a strong enough position to command such rules, we have to fight our way up the ladder to millions under management. In the meantime, how can we make money? Insurance is a great answer.
Establishing a relationship with an insurance product and making sure the client is clear on the fact that the advisor does more than sell insurance, can establish a relationship at a strategic time so that when their 401(k), 403(b), thrift savings plan, ESOP, profit sharing, deferred compensation, etc. are available, so is the advisor.
The advisor also pays the bills at home with insurance sales and grows the practice over time. This practice of establishing relationships can create nests of opportunity. If you do business with an employee of a large bank, it’s likely you will get referrals to fellow banking employees, thereby keeping the new prospect flow consistent.
I recently had an opportunity to help a retiring federal employee place about $600,000 from his Thrift Savings Plan. When we met I was able to discuss just his savings, but I discovered that he wouldn’t retire for several months and he didn’t want to make a commitment just yet. I sensed danger and possible competition so I decided to establish a more stable relationship by selling him life insurance. At age 61, it was easy to replace his Federal Employees Group Life Insurance with a 20-year level term policy.
It required extra work as he lived out of state. However, we were able to talk more often about an unrelated subject and prove that I can do good things for him. I saved him over $1,200 per year by making this simple change. That’s a $12,000 saving over the next 10 years, not to mention that his FEGLI would double again in premium at age 65, saving even more money.
By the way, if you have federal employees in your area, get a Federal Employees Almanac for $25 (Google it), and you will learn a great deal about the federal employees’ benefits.
I love to establish relationships by way of term insurance. It’s a very simple sale with affordability and very few people have enough life insurance. I am now working on a new project utilizing a simple but very effective product sale that leads to referrals and larger follow-up business. I’ll keep you posted on its progress.
The key word is patience. It takes patience, persistence and quality work to build a substantial practice. Create prospects from what you have and make sure what you have continues to grow and brings you more prospects.