-Jean Sullivan, Head of Wealth management at Celent
The distributor opportunity to transform advisor practices
The insurance distributor value proposition for advisors is built on a foundation of helping remove the barriers that restrict practice growth, create headaches and lower profitability. They already do a great job providing case management support, marketing support and access to carriers, but there is an overlooked opportunity to unlock advisor productivity and strengthen relationships.
The opportunity arises from a very specific advisor challenge.
The insurance advisor challenge: when growth outstrips inefficient processes
Financial advisors seeking to dramatically increase the value of their book of business do a great job of creating plans for finding more prospects and meeting more of each current client’s needs. They look for ways to optimize processes, improve productivity and drive agency growth.
However, even advisors who have set a clear vision and defined a plan for achieving their growth targets can run into trouble when growth outstrips processes. The irony is that, it's all too easy for advisors to enjoy growth in their business, but then see it choked off because of workflow-related obstacles and slow-downs. Sometimes it’s the simple problems that shut down grand ideas.
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Despite all the work an advisor may have done to put staff, structure and systems into place to kick-start their growth engine—if they are still reliant on manual, paper-based approaches to uncovering client needs, too much time is spent on each step in the sales process with each client.
Why legacy financial planning software can create its own bottlenecks
Financial planning software tools provided by carriers and vendors at some point in the past, are better than relying on jury-rigged Excel solutions, but it’s still not always good enough. Older solutions are less automated, and still require too many manual steps. They may be able to get the job done, but are cumbersome to use, don’t integrate with existing CRM and distributor or carrier systems, and require double entry of client data.
It’s not unusual for an advisor’s assistant to spend 45 minutes collecting information from a client and entering it in their older, financial planning software tool. And then, the advisor may still need to review the results and tailor the recommendations.
Accelerating the in-flow of new prospects brings with it a corresponding increase in the number of client discovery initiatives. And this turns out to be a cap on growth for some advisors. The math is simple; the amount of time each discovery takes, times the number of clients. Once that number becomes larger than a few hours a day, it’s like turning the advisor’s practice into a headwind. Everything slows down. Becomes hard. At a certain point, prospecting becomes secondary, and the growth curve flattens.
These bottlenecks mean that advisors are reduced to making money in their business based on the time they can spend with a client (which is a limited resource) rather than based on the value they can deliver.
Largely manual or inefficient processes create a form of business risk. Especially in a competitive marketplace where growth and being able to carve out a significant niche are vitally important. What advisor in the prime of their career would be satisfied with just maintaining their status quo?
How distributors can provide transformative solutions for advisors that want to increase productivity
The answer isn’t for advisors to hire more staff in an attempt to accommodate manual processes that are suffocating growth. Instead, this is an opportunity for distributors to deliver significant value for their advisors by providing an effective solution for eliminating roadblocks.