Sales Quotas have NO Place in Financial Services

"Don't find customers for your products, find products for your customers." - Seth Godin

Q. What do wealth managers, bankers, mortgage brokers, CPA's, and insurance agents have in common?

A. They ALL work in financial services.

Let's contrast extremes: Wealth Managers & Insurance Agents. Are they each viewed in the same light? That is mostly a rhetorical question because answer is somewhat obvious. There are many reasons for the discrepancy in perception. Have you ever stopped to ponder why? Seth Godin's quote spotlights an underlying flaw in philosophy within the mainstream insurance industry. To illustrate this flaw, lets contrast wealth managers and insurance agents.

Why are good wealth managers viewed as advisors, not salespeople?

The value of modern wealth management (done correctly) is the philosophical placement of the consumer at the apex of the professional priority matrix. That doesn't seem like a far-out concept, yet it wasn't always the case. Prior to 2008, wealth managers routinely grew their businesses by finding customers for their products. The ensuing damage done to tens of thousands of investors during 2008 market crash resulted in a seismic shift within the wealth management sector. In the wake of that catastrophic event, the vast majority of wealth managers pivoted to what had previously been an emerging operational model which is philosophically predicated upon finding products for customers. Notable within this standard is the statutory REQUIREMENT that financial advisors proactively engage with clients to consultatively distinguish between what is "good" and what is "best" for each respective client. Central to this philosophy is the understanding that the identical product in the hand of two different clients can produce dichotomous outcomes. The flaws requiring attention were ones of product AND provider "fit." The solution was the creation of a regulatory requirement for truly objective, client-centered consultation, discussion, disclosure, and education as a requirements for continued work in the industry. Risk of loss of investment capital still exists for investors, but the responsibility for helping consumers discern and contrast their market-wide options begins with the reputable, objective, and independent-minded financial advisor.

Lets be clear...Wealth managers certifiably ARE salespeople, but they're increasingly not viewed that way because of the systemic (philosophical) assurance that they're not emphasizing a particular company's product. The CLIENT is at the center of philosophical model. In other words, consumer interests must supersede any particular group of shareholder interests.

Wealth Manager Priority = Client

Why are insurance agents too frequently viewed as salespeople, not advisors?

The simple answer: Philosophical mis-alignment

Almost everyone is selling something...The question you must ask yourself is: "What am I selling and how am I required to sell it?"

For better or worse, there is a right way and a wrong way to do everything. Teachers sell education, but nobody wants to "teach to the test." Doctors sell healthcare, but nobody wants to be relegated to a number in the game of "corporate medicine." Insurance Agents sell indemnification from financial loss, yet many people regard insurance professionals as one rung above used car salesmen.

Nobody wants to be perceived as a peddler, yet that IS the perception that the conventional corporate model creates within insurance industry. Individual risk is as unique as a fingerprint, yet corporations market one-size-fits-all solutions with oversimplification as their calling card. Can you buy & sell insurance as a commodity? Yes. Should you? That is a much more poignant & discerning question. The mainstream industry philosophy twists Seth Godin's quote to fit it's own narrative: Find customers for products, instead of products for customers.

The mainstream insurance industry philosophy is completely upside down because shareholder demands for profit are philosophically emphasized ahead of client needs for company agnostic, product-neutral, knowledge-centric, relationship-driven counsel and advisory services.

Mainstream Corporate Priority = Max Profit

Why can't the insurance industry figure it out?

The simplest answer to this logical question is that the mainstream industry structure has little to no interest in disrupting the lucrative status quo. There is a right way and a wrong way to make money. In financial services, the best option is the truly client-centric option. We're not talking about selling commodities, we're talking guiding high-stakes decisions that can significantly effect peoples lives. Post 2008, wealth managers figured it out. As of 2023, the insurance industry has not. Corporately managed insurance agents continue to perpetuate a philosophical problem when they're forced to sell pre-determined and finite corporate products instead of truly impartial consultative services. The industry-wide turnover rate in the first three years as an insurance agent is greater than 80%. That is a heinous indictment of the mainstream philosophy which is hidden in plain sight. The cut throat nature of the corporate & commoditized sales environment places the insurance company at the center of the philosophy...Not agents, not values, and certainly NOT clients.

It must be acknowledged that this is not to say that any one shareholder driven product is bad...They're certainly not. The massive issue that corporate and/or captive centered risk management professionals must regularly and delicately navigate is "fit." What is and what isn't covered, under what provisions, with what caveats, and to what extent? What are the objective differences between good, better, and best within the almost limitless power of the free market? These are fluid dynamics for both consumers and the insurance industry at-large. What fit last year may be different from what fits next year. Sprinkle-in the fact that some products logically generate more revenue than others and consumers regularly become unknowing recipients of a systemic lack of genuine objectivity that is hidden in plain sight.

When you look at managing risk (i.e. insurance), everything seems fine, until it is not. Price is certainly important, but coverage is the product that you buy with insurance. What were you sold? Were competitive alternatives understood or acknowledged? What were the alternatives for coverages, endorsements, exclusions, limits, or sub-limits? Whose best-interests were truly placed at the apex of the decision making process during the transaction?

Conclusion:

While the fundamentals of growing wealth are categorically different from the science of managing risk, the tie that "could" and/or "should" bind all segments of financial services together is the philosophical commitment to putting the needs of clients over the demands of any one group of shareholders. Wealth managers have figured this out and their reputation continues to benefit as a result. The same cannot be said for mainstream segments of insurance. Corporations press their products while consultation & objectivity gets lost in process. There remains an inconvenient truth with acknowledging that shareholder best interests are often not the same thing as policy holder best interests. This is a very real issue that corporately managed agents need to acknowledge.

Like wealth management, the free market offers virtually limitless options for managing risk. Like wealth management, insurance professionals should not have a mandate to sell (or even give preference) to one company's products over another. Despite that philosophical high-road that is plainly available, many insurance professionals have been falsely indoctrinated (and bought-in) into believing that product mandates, sales quotas, and commoditized sales are an unavoidable reality within the insurance segment of financial services. That is fake news.

Capitalism is not a perfect system, but it is irrefutably the most-perfect system the world has ever known. The wealth management sector continues to offer the insurance sector a beautiful template for innovation and philosophical evolution.

All of this starts with a fundamental truth that is all too often ignored: Sales quotas have NO place in financial services. If you are ready to free yourself from corporate handcuffs and align yourself with an organization whose philosophy fits your own, don't put off until tomorrow what can be done today.