In this column from Insurance Journal’s archives, Jim Ruta explains that homogenized coaching can be harmful for insurance advisors. 

Question: Some of the coaching advice I get conflicts with what I see some top life insurance advisors doing and hear you recommending. What’s the story? 

That conflict you feel when you read some coaching advice is real and it’s a serious problem if you are a life insurance agent or life insurance-based financial advisor. The reason is that financial advisor coaching has been homogenized. It is not routinely discipline specific and that’s what gives you that sense of conflict. Great question. 

It’s been common for some time now to think that “a financial advisor is a financial advisor”, so good practice management advice for one is good practice management advice for all. This seems sensible, but it’s dead wrong – just as your “spidey senses” tell you. 

Off target coaching will hurt you because it doesn’t account for the very different nature of the life insurance business model compared to the investment advisor model. Life insurance agents need life insurance business coaching advice because some of that common advice you hear is the exact opposite of what they need. There are many substantial differences but here are three of the most important ones: 

  • Common coaching advice today is that advisors can only work with a couple hundred clients due to the annual service work involved in managing them. With only some 2000 hours in a year and each client taking up say, 15 hours of service, you can only have 2000/15 or about 134 clients in your clientele. Yikes! This small total is a recipe for abject failure in the life insurance business where there are no such arbitrary client limits. ICON insurance agents can have literally thousands of clients. So, if you think you only need a few dozen, you are done.
  • By the same token, the common “A, B, C” client segmentation advice isn’t necessary for life insurance agents either, because they have a much lower annual client maintenance demand on them. We don’t review polices several times per year like they do portfolios. And, many small clients often grow into big clients and it can happen very quickly. ICONs can give everyone their best service because they only need to do it annually. If you segment your clients, you’re bound to lose some great clients for nothing.
  • Life agents also have a much greater prospecting urgency than investment advisors due to the number of new cases required to grow their business and their income – as many as 100 new cases per year or more. I just visited with a multi-million-dollar producer who sells 250 to 300 new insurance cases per year and has for years. Some do 1,000! By comparison, investment advisors, who are likely only looking to replace or exchange their smaller accounts with much larger ones, so they can grow their book, can probably only handle just 10 or 15 new clients per year. That would be a disaster for a life agent unless the cases were monstrous which brings its own set of problems. Stop prospecting in the life business and it’s over. 

The differences between the life agent and the investment advisor business models are stark. That means that coaching advice is not perfectly transferable between disciplines so don’t let it happen to you. Common coaching will decrease your performance not increase it. Be sure you get uncommon coaching advice for your specific business and you’ll lose that conflict and achieve more. 

This column by renowned advisor coach Jim Ruta was first published in the January 2018 edition of Insurance Journal magazine.

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Jim Ruta’s mission is simple – to preserve, promote and propel the financial advisor business. A former insurance advisor and executive manager of a 250-advisor agency, Jim is a highly regarded coach, author, podcaster and keynote speaker. He has spoken 4 times at the MDRT Annual Meeting including the Main Platform. Jim Ruta is an Executive Coach and Keynote speaker specializing in life insurance advisors and leaders. He works with top advisors around the world and re-energizes audiences with his deep insight and passion. 

If you have a question for Jim, you may send an email to [email protected]