Is Your Insurance Professional a Life Insurance Superhero?

My family grew up around financial entrepreneurs who chose to make Valmark their home. Over the years, my children got to know these entrepreneurs–both personally and professionally–when accompanying us on company trips, industry meetings or just joining us for dinner. This exposed our kids to wonderful people, many of whom have become lifetime friends and pseudo-family members. Unsurprisingly, two of my four children are interested in the profession and are currently pursuing that passion in their respective educational endeavors.

Back when my son, Lance, was five he declared, loudly and proudly, that he wanted to become a “Life Insurance Superhero.” His declaration inspired the title of a talk I delivered to over 5,000 top insurance professionals. ?

Almost everyone I have met in the profession claims to be good (some great) at what they do. I wonder, though, about how clients, prospects, and other referring professionals measure quality. What does it take for an insurance professional to be considered great at what they do? Historically, life insurance companies award the professional who sells the most in a given year. In fact, the original qualification for the Million Dollar Roundtable was a million dollars of death benefit sold (back when most people took out policies with 5 or 10 thousand dollars of face amount death benefit). Spurring the public to take action to protect their families/businesses is certainly a measure of a good financial professional. But is that it? Should quantity or volume of sales be the sole metric of success?

For those who consider themselves financial planners, the measure has evolved from sales to assets under management (AUM). Firms at the billion-dollar AUM level can only do this if they get and retain clients. If clients are happy or at least satisfied, they keep their assets with the firm. I believe another objective measure of quality is a historical absence of client complaints. If an advisor is FINRA-licensed, a quick search on FINRA’s BrokerCheck will reveal how many years they’ve been in business, how many firms they’ve been with, and the number of client complaints they’ve received.

So, back to the question, what does it take for insurance professionals to be considered great at what they do? What ingredients are required to make a life insurance superhero? Our company, Valmark Financial Group, has been working with some of the best people in the business for over 60 years based on these criteria. We partner with a range of professionals, from those who solely offer insurance services to financial planners who include insurance as part of the many services they offer.

Based on our experience at Valmark, I think the qualifications for excellence should include the following:

1. Are existing clients happy?
2. How good is the advice being offered?
3. Does the professional represent multiple companies and can they offer all types of products?
4. Does the insurance that was placed stay in force?
5. What standard do these professionals wish to be held to? Do they meet that standard? Do they exceed it?
6. What systems are in place to monitor and manage insurance once the paperwork is signed?

If the insurance professional is FINRA-licensed, much of this objective data can be found on BrokerCheck or Form CRS. How about for those who hold themselves out as insurance professionals without FINRA licensing? Not having these licenses means they have no access to variable products, arguably the best-performing product type over the last 15 years.?? It also means a lower regulatory standard of care, absence of information about client complaints, and no written disclosure of conflicts.? Interestingly, a major study of all financial advisors found that insurance agents who have dropped FINRA licensing are three times as likely to have a serious client complaint. [i]

As I mentioned earlier, the life insurance industry has traditionally measured success differently than I do, and many companies have granted awards based on who sells the most each year. I recently received a photo of a producer who was named “Advisor of the Year” by an insurance company. The industry colleague who sent the photo asked me, “If he is Advisor of the Year, what is his advice?” It turns out, at least some of his advice is not very good. I was asked to be an expert witness in a case against him and declined. The litigation team bringing the suit informed me that this individual (along with his organization) has been sued 12 times, mostly by clients, who allege that the policies he sold had damaged them. Despite these allegations, he was smiling on stage and receiving a plaque in recognition of being Advisor of the Year.

At Valmark, we aim to help our firms further develop these qualitative measures.? Recently, we’ve commissioned a study at a local university, with plans to publish a whitepaper on the findings in 2024. An individual with a Ph.D. in finance is just beginning to analyze data on thousands of policies being managed on behalf of our Member Firms through The Valmark Policy Management Company. This study will examine policies from dozens of practices and will include every product type and in-force policies with billions of dollars of face amount from over 40 insurance companies.

An early finding from the study has emerged that I would like to share. When comparing policies that have an annual written review and report to the client (formal service plan policies) with those without annual reviews/reports (informal service plan policies), the success rate (those on track to provide promised benefit) is double for those policies with formal service plans. I strongly believe that this key component can assist professionals with their goal of reaching "Superhero" status.

For those firms that wish to engage in a candid assessment of where they stand in comparison to the idyllic life insurance superhero, we have scorecards available that measure insurance practices on six dimensions of excellence. Please email Brandy Friedt, M.A. at [email protected] to request this scorecard today and learn to become the life insurance superhero of tomorrow.

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[i] WANDERING FINANCIAL ADVISORS. Colleen Honigsberg, Edwin Hu and Robert J. Jackson, Jr.