Like asking a toddler to share a favorite toy, insurance agents need to treat stockbrokers with kid gloves to build trust and gain access to their wealthy clients.
At least, that was the consensus of a panel discussion at a recent conference on how to build alliances between the insurance and brokerage industries in a changing marketplace.
"Many individual broker-dealer representatives do not do comprehensive financial planning for their clients," said Thomas Cross, a marketing vice president with Securities America Inc. an Omaha, Neb., broker-dealer owned by American Express Financial Advisors.
"They know when they have a wealthy client, but they don't know how to go about doing the case," he said.
"There's really a hesitancy on their parts to get in front of the client -- how to do it, and what to say." added Mr. Cross, who spoke at the National Association of Variable Annuities conference in New Orleans, which drew about 400 insurance agents and insurance and mutual fund marketing executives.
His comments underscore a changing environment for insurance agents. People used to buy insurance when an agent called and explained their insurance needs. Now, brokerage houses get to the clients far sooner by offering policies through their reps as they provide investment advice.
Mr. Cross suggests that agents take advantage of brokers' lack of enthusiasm for, and experience in, selling insurance by teaching them how products fit into wealthy clients' estate plans.
"Inside the brokerage, there are people who trade stocks," said Mr. Cross. "They never even see their clients. They talk to them on the telephone."
insurance 4% of sales
Eric Busse, a vice president overseeing brokers who sell insurance at Edward Jones, said the St. Louis brokerage began selling insurance about five years ago. So far, insurance sales generate about 4% of total revenue. He agrees that Jones' brokers can use help. "We don't expect them to become experts in the insurance field," he said.
But to crack the broker market, agents will have to tread lightly on the broker's client, says Steve Florman, a financial adviser specializing in insurance at the American Express Financial Group, the Minneapolis insurance subsidiary of American Express Co.
Not all will immediately warm up to some estate-planning solutions, which can mean losing control over assets.
For instance, some agents might recommend locking assets into an irrevocable trust for estate tax purposes, a move that would make assets inaccessible to the broker.
That "may be a little unnerving for some people," Mr. Florman said. "But this is where we can add some value, and where we can provide some products for the client's advantage."
Edward Jones' Mr. Busse identified one key to cracking the broker market. "Everyone would probably agree that every insurance company has similar products," he said. "The main thing is quality of service. That's what's going to set companies apart."
