I often ask reps, “What’s your biggest challenge?” The answer is almost always the same: Prospecting.
They tell me that they are great at fact finding, building a relationship quickly, and putting together a plan. But, hands down, the thing they feel they have the most room for improvement in is prospecting.
The reason why this is the case has become obvious to me and it has everything to do with the mindset of financial advisors.
What reps work really hard at, during every single moment of every single day, is to fight the negative perception that consumers have of financial advisors.
Let’s face it: The overall image that society has of financial planners, despite the incredibly positive impact we have on so many clients, is pretty low.
Time and time again, surveys show that the financial services industry ranks among the lowest of professions in the public’s eye in terms of trust and honesty. From their perspective, we are right on par with used car sales people.
They think that insurance agents just go out and sell stuff that nobody needs and are only concerned about making a commission. That we won’t provide any service after we make a sale and then we will get a list of all their contacts and prospect with it relentlessly.
The list goes on and on.
That’s why financial advisors work so damn hard, on both a conscious and subconscious level, to make sure that their client and prospective clients don’t have that same perception about them.
This is why prospecting is so difficult for the majority of advisors! The pinnacle of behavior that could trigger a client to have a negative perception of a financial advisor is asking for referrals. It’s the very essence of what you are trying to avoid. And yet, it’s one of the most important aspects of your business that you must do.
What I’m here to tell you is that there are some very unprofessional ways to prospect that warrant those feelings by clients. There are advisors who use sketchy sales tactics and only care about making money. This is the minority of cases.
The vast majority of advisors I’ve met genuinely care about people and got in the business to help others.
For these advisors, there are also extremely professional and attractive ways to prospect. And it all comes back to your mindset.
You need a deep conviction that the people who get the opportunity to work with you are lucky. The work you do with your clients vastly improves their overall financial security so that they can have peace of mind and serenity. Your clients and community need you more than ever. You follow a system, add tremendous value, and you follow up and follow through. That you have the courage to tell people not always what they want to hear, but what they need to hear.
With that mindset, prospecting is not about asking for a favor or just trying to make a sale. When you ask for referrals, you are giving the individual that you are asking a referral for a gift that they can give to the people they love and care about most.
That’s just not a play on words or something you can trick yourself into believing. It’s has to be authentic and genuine. It has to be the truth that you believe in the deepest part of your soul.
The biggest reason advisors fear prospecting and asking for referrals is that they are going to be pigeonholed as society’s negative perception of the insurance salesperson.
There are some other associated reasons as well. For example, asking for referrals is asking for help. It’s goes against the ego. Once a rep has an established business, sometimes their mindset is that, “They don’t need any help. They’re already successful.”
"When you ask for referrals, you are giving the individual that you are asking a referral for a gift that they can give to the people they love and care about most."
When this thought process is combined with the fear of coming across as the “salesy” insurance agent, this becomes a powerful force driving you to avoid prospecting.
Yes, every advisor needs a system for prospecting and they need to master great language. But the first step to becoming a masterful prospector is to master your mindset. Getting rid of all your self-defeated thinking and replacing it with empowered thinking.
Without first addressing what goes on in the six inches in between your ears, no system or language will be able to help you. Your body language, tone of voice and subliminal communication will always manifest what you really believe inside.
If you are an advisor who can relate to this post, I highly encourage you to try out P2P Academy, my virtual sales training website. One of our most popular courses included on P2P Academy is the course on prospecting.
In this course, I go more in depth on ways that you can develop and master an empowered prospecting mindset, but also give you my eight-step prospecting system and powerful language that hundreds of advisors have used to elevate their practice. Check it out at P2P-Academy.com!
I’ve always been the biggest believer in the power of permanent life insurance.
In fact, I call it the eighth wonder of the world in my presentations and on P2P Academy, and I share eight reasons that make it such a powerful financial tool.
In today’s world, the case of permanent life insurance is even stronger. There’s NEVER been a greater need for permanent life insurance and for advisors to have that conversation with clients.
The simple reason why is that it provides certainty in an uncertain world. Right now, there is probably no better word to describe the times we are in than “uncertainty.”
What are the biggest fears on people’s minds right now? In the midst of this global pandemic, hands down, they are worried about job loss, serious illness, and death.
Permanent life insurance is probably the only tool in the world that can help address all three of these issues. Here’s how.
At the time of purchasing a permanent life insurance policy, nobody buys the product for its ability to provide access to cash. It’s an afterthought.
But cash is king in times of need. And life doesn’t go in a linear path. It throws some curveballs, and COVID-19 has been a big one for millions of people.
Despite the fact that the statistics on jobless claims have been improving, each week since the middle of March, we have seen jobless reports of an additional 1 million or more people and the overall unemployment rate stands at about 11% as of August 2020.
Typically, the cash value from a permanent life insurance policy can be accessed through a withdrawal or by taking out a loan against the policy. The fact that permanent life insurance comes with accessibility to cash, that doesn’t require a bank loan application or a cosigner, and can be quickly transferred to an individual’s bank account, is a huge deal.
Also, I have yet to ever see anybody ask their advisor when they need to access their cash value say, “Oh by the way, what was the rate of return on that policy since I started funding it?” Nobody cares. What they care about is that the money is there when they needed it most.
I often think about the word control. Most breadwinners have some degree of confidence that they will always figure out a way to provide for their family no matter what happens. They think even if they needed to work three jobs to create the necessary income, they’ll do whatever it takes.
However, there are a few things that are out of our control. One of them is in the event that you become disabled of have a long-term serious illness that prevents you from working.
Disability insurance obviously plays a critical role in managing this risk. However, from a life insurance perspective, the waiver of premium feature is another powerful tool.
"There’s NEVER been a greater need for permanent life insurance and for advisors to have that conversation with clients."
This benefit is typically added as a rider. While it can differ from policy to policy, the basic premise is that if you (the policyholder) cannot do the job that you’ve been trained, educated and experienced to do, the life insurance company will make the premium payments on your behalf.
In other words, it literally becomes a self-funded long-term financial security tool. This is an incredibly important feature to speak to your clients about that doesn’t exist in any other financial instrument out there.
Last, but definitely not least, is the guaranteed death benefit of permanent life insurance. Over 163,000 people in the U.S. have died from COVID-19 since March.
People want certainty that, if God forbid something were to happen to them, their family and loved ones would be OK financially. During times of a pandemic, the risks are obviously higher and so is the need and demand for having a guaranteed death benefit.
In fact, a recent Wall Street Journal article reported that some carriers were having to turn away business from some Americans who want a life insurance policy!
Whether it’s a young couple in their 30s, a married couple approaching retirement, or a senior looking to leave a legacy or avoid being a financial burden, life insurance is critically important. And permanent life insurance is the only kind that is guaranteed to provide a death benefit when you die.
The time to plan for this is not when you’re sick or in the midst of a global pandemic. It’s during a time in life, as early as possible, when you think you are never going to need it. The current crisis opens the door wider than ever before for this important conversation.
The best outcome of a solid financial plan is that it gives you options. No one knows if or when you’ll get sick or disabled, be out of work, or how long you’ll live. That’s why permanent life insurance is the eighth wonder of the world – it gives you the flexibility to handle so many of life’s curveballs.
I hope that this gives you a renewed sense of purpose and commitment to talk to every single one of your prospects and clients about life insurance. Don’t wait for the next crisis. Don’t wait until they bring it up to you – by then, it’s usually too late. Start now with the foresight that the only thing certain in life is uncertainty.
On P2P Academy, every month I share a new episode of JIM’s TAKE which is dedicated to tackling topics that have recently come up in my training sessions with advisors.
In this month’s episode, I address a disturbing recent trend, most frequently with newer advisors in the business, which is their hesitancy to engage their clients in a conversation on life insurance.
They feel that collecting assets under management (AUM) is the sexier thing to do. That it’s more fun to talk to their clients about it. The real money is in AUM. That they don’t want to be cast as a life insurance salesperson.
I feel like advisors who have this mindset are doing a major disservice to both their clients and themselves. In this month’s JIM’s TAKE, I cover eight reasons why they need to sell life insurance (and there are many more), but I want to share a few of them here as well.
The first reason is the most obvious, and we could probably end the article right here. Selling life insurance is simply the right thing to do.
If you believe in the philosophy of overall financial security and planning, then it starts with a solid foundation of risk management. Planning for the “what ifs” in life.
Perhaps no question is more important than, “What would happen to my loved ones or the people I care about if I were to die prematurely?”
You can’t have a complete financial plan without addressing this question and life insurance is a powerful tool to deal with it.
"Embrace the struggle. Be proud of what you do. It makes you unique and attractive to the marketplace, especially when you have the passion and knowledge behind it."
When working with younger clients, typically they don’t have the assets built up where they could be a significant client for wealth management purposes alone.
Traditional wealth management firms often require a minimum six-figure investment in order to establish a relationship with a wealth manager. These firms are not calling on young professionals because they don’t have the accumulated assets to meet that criteria.
The advantage to you as a financial planner is that you CAN call on these types of clients. And, you can be well-compensated for working with them by getting them started with a foundational life insurance program.
Whereas traditional wealth management tends to focus on numbers and data, life insurance is a more emotional topic. As a result, addressing it paves the way for strong client relationships built on trust. There is a direct correlation between a client’s trust in you and the length of time they work with you. The stronger the trust, the more likely they are to be a lifelong client.
If you’re picking the right people, other individuals in their 30s who have a very bright future, they are going to have assets down the road. By the time they have those assets, you’re going to be the natural candidate to manage them.
The benefit of working with these younger clients is that your practice is going to grow with them. If you are only working with 50 - 60-year-old clients, they may have the most assets now, but soon they’ll need to begin living off those assets. While you may immediately benefit from something like a 401(k) roll over or a lump sum payment into an annuity, the future sales opportunities will be limited.
If you get a new client at the age of 30, on average they will buy risk-based products seven additional times. The best clients may buy even 11 or 12 more times from you.
Additionally, each sale will get easier and easier. I have seen studies that show that to make the first sale to a new client takes approximately 23.5 hours. The second sale takes about three hours. The third time only takes one. The speed of the sale is increased through the trust built with the client.
If you are only doing business with people age sixty and up, you will be constantly seeking out new clients. It’s like doing the business from year one over and over again. That’s not say you shouldn’t be working with this age group, but a healthy practice should have a good mix of both younger and older clients.
After spending ten years as a financial advisor, 12 years leading an agency of 117 full-time advisors, and now working with hundreds of advisors across the country as a trainer, I understand the challenges of selling life insurance. However, I also know from experience that the long-term rewards of it are profound.
Embrace the struggle. Be proud of what you do. It makes you unique and attractive to the marketplace, especially when you have the passion and knowledge behind it. This is not a quick fix, but the best things in life really do take time.
For more reasons on why you should sell life insurance, I encourage you to try out P2P Academy. You can watch the most recent JIM’s TAKE for more on this topic and check out over 170 training videos on how to master your professional sales skills.
I’ve got a long bucket list of the things that I want to do in my life. I’ve been very blessed and fortunate to be able to accomplish many of them, including playing Augusta, skydiving and climbing a mountain.
But one of the things that remains on my bucket list is going on national TV to have a live debate with Suze Orman or Dave Ramsey on the benefits of permanent life insurance.
The bottom line is that they are probably both way smarter than me. And the facts that they throw out about life insurance are correct.
But the reason they are far off base in their negative opinion about life insurance is because the facts they present are from a text book. They are from a lab. They’re from a classroom.
What all of you know, given the profession you’re in, is that life doesn’t happen in a text book. Human beings are irrational and make decisions based off of emotion, not logic.
In a debate with them, there are a whole list of life insurance benefits that I could bring up that they’ve never considered. But the one I am going to cover here is one that even most financial advisors don’t consider. In fact, many advisors apologize for this benefit and I think that’s a huge mistake.
The benefit that I’m referring to is the “forced savings” element of permanent life insurance.
It’s no secret that I am a big fan of permanent life insurance. The easy argument is that I think that anyone who has someone that they love or care about needs life insurance in force when they die.
We all know the often-cited statistic that fewer than 1% of term policies ever pay a death claim. Most often the policy expires before the policy holder does.
Conversely, permanent life insurance policies that remain in force throughout a policy holders’ lifetime will pay a death benefit.
Additionally, permanent life insurance also has a cash value component. A portion of every premium payment goes towards insuring the policy holder’s life, while another portion of it goes towards building a cash value that also earns interest. This cash value can be available for the policy holder to withdraw or borrow against when they need it.
Here’s the point. When people buy permanent life insurance, they pay their premiums and it creates an environment of “forced savings.”
If there’s anything that the American people desperately need, it’s to save more money. And, they need the environment around them to create the discipline for saving that they don’t have on their own.
Consider the hypothetical example of a 35-year old married couple and imagine we were running a spreadsheet ledger for them. In one column, we show their savings using a Roth IRA that’s invested in an S&P 500 index fund that they contribute $5,000 every year from age 35 to 65.
On the other side of the ledger, they purchase a permanent life insurance policy that has a $5,000 annual premium payment over the same time period.
No matter who you look at it, or how good the particular company’s permanent life insurance policy, the Roth IRA will blow the life insurance policy away every time. This is where Suze Orman would make her case for the Roth IRA over permanent life insurance. On paper, she would be right.
But the truth is that the majority of people don’t have the discipline to contribute to the Roth IRA every year for 30 years. In fact, the median balance of IRAs for individuals in their early 50s is $31,692. Considering that, historically, the annual contribution limit on Roth IRAs has been $5,500, this is a far cry from what the average balance could or should be.
The reason why this is the case is simply because, despite people’s best intentions, life gets in the way. In the case of the 35-year old married couple, the story goes that they begin contributing to their Roth IRA. Then they have kids, buy a new house, adjust their lifestyle to their income, and they start having other major financial commitments.
When people buy permanent life insurance, they pay their premiums and it creates an environment of “forced savings.”
As a result, the first thing that gets put on hold is the Roth IRA account because retirement seems so far off in the future. There’s no immediate penalty for putting their contributions on hold. The devastating impact of skipping 4, 5, 10 or 20 years of Roth IRA contributions aren’t felt until much later in life.
On the other hand, the life insurance policy has a loss if they stop contributing to it. They lose the death benefit. And for that simple reason, it is far more likely that at the very least that 35-year old couple thinks very carefully before stopping their premium payments and losing the death benefit.
I got into the insurance business as an advisor, 100% on commission, at 22 years old in June of 1989. In August of 1989, I bought my first life insurance policy for $100 per month. The next year, in August of 1990, I bought a second one for $150 per month.
While I went on to buy many more policies over the years, at 23 years old I was contributing $250 to life insurance. Even though I didn’t quite understand the need for it at that early age, I listened to my mentors and knew it was a smart thing to do.
In 31 years, I’m proud to say that I have never missed a policy payment. That is not a result of any special mental fortitude or ability. I am not a natural saver! I did it because it was forced savings.
Through my career as an advisor, I conducted 3,512 fact finders in which I never met a single person that contributed to a Roth IRA for 30 years with that same level of discipline.
Most financial advisors I work with either a don’t like the long-term commitment of permanent life insurance premiums or apologize for it. When I hear that I can’t help but say, “Are you kidding me? That’s the beauty of it!”
The commitment to making the payments is an unbelievable benefit of the product. When you make those premium payments, you are putting yourself in a position down the road to have access to assets when you need them – thereby providing peace of mind and financial security. That’s a gamechanger. So, stop apologizing for it and start promoting it!
And, if you run into Suze Orman or Dave Ramsey, let them know I’m ready for a debate.
I truly believe that being a financial advisor is one of the best careers on the planet.
But, if we are being honest with ourselves, we have to address the elephant in room: the majority of reps don’t make it. Some analysts estimate that about 90% of first-year life insurance agents burnout in the first year.
When I entered this business as a Northwestern Mutual agent, I earned “Rookie of the Year” my first year in the business and then went on to qualify for MDRT and Top of the Table. After that, I was an agency leader for about a decade and am now a speaker and trainer. I absolutely LOVE this business.
So, on the surface, you’d probably think that the thought of quitting never crossed my mind. But the truth is I definitely thought about it. In fact, in the early years, I thought about it almost every day.
Being a financial advisor is a tough job, especially in the early years. It’s a strange thing. On one hand, when you consider the typical savings rate and overall lack of financial planning of the average household, there are so many people that desperately need our services.
Conversely, it can still be so difficult to make the calls, hear “No” all the time, deal with canceled appointments and clients who refuse to take action, even when your plan is 100% the right move.
You have to work hard and face your greatest fears on a regular basis. You have to fight through rejection from prospects and clients and are sometimes cast in the eyes of others as “just a salesman” trying to make money.
I remember sitting down one day as a young rep and really fighting back the urge to quit. I was filled with so much anxiety and stress. And, in one of my critical think time sessions, an idea struck me that changed everything, which I describe in the video below.
Many times, reps succumb to the feeling of wanting to quit. They feel like the job just isn’t a good fit. They feel like they aren’t doing well, they’re beaten down, or they simply can’t get past the feeling of wanting to give up.
If this is you today, or you feel like you’ve ever been there, I want you to know that I’ve been there too. But this is an industry of endless benefits. If you can push through those feelings, the is a world of possibility ahead.
You get to noble work that can have life-changing impact on people’s lives, by providing them with financial independence and security. You’re your own boss and in control of your future. You have unlimited income potential and are in a career that progressively gets better over time.
The next time you feel like you want to quit, make a list of your “entrance reasons.” Ask yourself:
1. What attracted me to this industry?
2. What factors contributed to your decision to join the company you did?
3. What got you excited about this industry?
4. What resonated with you the most?
5. What has been your biggest win thus far?
Once you have your entrance reasons, evaluate if any of these reasons have changed. If they did change, how so? Is the only thing that changed that you realized how hard it is in this business? Or was there a seismic change in your life that you need to reevaluate how you are approaching the job?
I am a firm believer that there is no genetic wiring to this business. To succeed you need to work hard and face your fears. We all have the power to do it. Reaffirming why you entered the industry can help expel doubt, realign your beliefs, and elevate your performance.
Step two is to create your own life saving story. The basis of creating this story lies in the belief that if you believe in the greater purpose of your work, then nothing can stop you. When you’re truly working for a higher purpose, and believe in the power of your work, you will never quit.
Think about the work you’ve done. Review your career and pull confidence from the work you’ve done for past clients, especially if you’ve delivered a life insurance or disability benefit. If not, imagine what that would feel like if you were to do that for one of your clients. If you feel like you can’t resonate with either of these options, you can borrow my story about the people on the pier or create your own.
The point is to put yourself in touch with your real purpose for being in this industry. To realign your values and reaffirm your focus. Once the mind changes, there is room for new behaviors that will help you overcome the feeling of quitting.
Our industry requires this level of mental growth and stamina because there is a direct correlation to how worthy, exciting, and noble things are to the degree of difficulty to obtain them.
In the history of my 30-year career, I have never met a rep who embraced activity and did not overcome the feeling of wanting to quit. I encourage all reps to pick up the phone and start dialing when they are struggling.
If you can crank out a high volume of dials per day, you’ll have a feeling of hope regardless of how the calls went. The same is true with having kept appointments. Whether they go well or not, the feeling that you get when you keep appointments with people help combat those negative feelings that are intensified when you’re in isolation.
The bottom line is that I want you to know that you are not alone in feeling like quitting. Everyone has felt that way at one point or another. But, looking back 30 years, I could talk for hours about how grateful I am that I stuck with it. While you may feel like you’re in the midst of driving through a storm, I promise you the sun is shining on the other side. Keep in mind the positive impact you have on others and commit to activity. It’s the fuel that will get you to your destination.
As a financial advisor, it’s important to understand that you are not in a logical business. This is an emotional business.
The key to becoming a masterful, high-producing advisor is being able to connect with clients logically AND emotionally. You need to bring both aspects together.
This is evidenced by a common industry ratio: 10, 3, 1.
You’re probably familiar with this ratio. On average, you’re going to get ten referrals, you’ll meet with three of them and you’ll end up with one new client.
Have you ever thought about why this is the case? When you think about all the financial issues of most Americans, between the dismal savings rate, how few people have a plan, and high percentage of people who are under insured, almost every needs help.
When I was a rep, I took 3,512 fact finder meetings. I could count on one hand the number of people who had a complete, well-developed financial plan that they had fully executed. No one had all their i’s dotted and t’s crossed.
With this in mind, these ratios make no sense. Why is it that out of ten referrals you only end up with one new client? Clients should be beating down your door to work with you! However, the reason these ratios do make sense is because so many advisors only operate in the logical space.
If you only work in the logical space, it’s all about timing. It’s about getting in front of the right person, at the right place, and the right time. That’s if you work logically, or what I like to call transactionally.
What I like to teach is to become transformational. If you work in a transformational mindset, you can blow those ratios away. The key is to connect with clients emotionally, and there’s no better way to do that than by asking great questions.
What is the point of asking your clients questions?
When you work in a transactional mode, the questions are very basic, superficial and lead to token answers.
The purpose of advisors who ask these kinds of question are to gather data, fill out a form, and put a check in the box. Or, even if it’s with good intentions, it’s just to lead the client down a path to make a sale.
In order to become a masterful advisor, your purpose must be more profound. A master’s purpose is to create a path to truly understand their client, not just by what the client says but by tapping into past behavior and observations.
In addition, it’s to help the client acquire a deeper understanding of themself. When you ask great questions, you help the client better understand their own financial behavior and mindset through self-reflection. This allows them to buy into and make the necessary changes for them to be more successful in the future.
It can lead to eye-opening, profound moments for your clients, and that’s how you bridge the gap from transactional to transformational.
Let’s take a look at how these concepts are put into action with an example of an advisor conducting a fact finder meeting and talking to their client about their income and saving money.
A transactional advisor will ask the basic questions like:
- What is your annual income?
- After taxes, insurance, and deductions, what is the net amount you take home every month?
- How much on average do you save?
For simplicity, let’s say the client’s monthly income is $10,000 per month and he or she says they typically save 25% of that amount. At that point, many advisors would be satisfied and simply move on to the next section. They feel that they’ve gathered the data. Mission accomplished.
A transformational advisor will still gather that essential data, but also go deeper.
The truth is that the majority of clients have very little to no true savings. The majority of their wealth is in their house or in their qualified plan. So, when they don’t have a significant amount saved up, yet they tell you that they typically save 25% of their income every month (or conversely that they only spend 75% of their monthly income), you know there is a disconnect.
A transformational advisor will get to the root of this by asking questions like:
- You mentioned that on average you spend about 75% of your monthly take home income every month on expenses. This means that you save about 25% of your income every month, is that fair to say? If that’s the case, where is that money?
Most clients will answer along the lines of, “Well, if we had a met a few months ago, you would have seen a bunch of money, but just recently we had to do some renovations on the house and I had to help out a family member financially.”
It’s at this point you can have a conversation about the difference between deferred savings and true savings. Deferred savings is money we save for a period of time to be used, for things like renovations, a new car, or helping a family member. Some of these expenses are expected, others are not. True savings is money we put away for a time period when we will no longer be working.
This is when most clients realize that the monthly amount they put towards true savings is often zero. This is when a transformational advisor can follow up with questions like:
- Looking at the past few months, do you think you could find discretionary spending that you could avoid?
- When you think about doing that, describe to me the pain that comes along with it?
- What would be your greatest challenge to give up that spending and to save?
- How can I help?
Do you see how different this conversation can be by digging deeper and asking great questions? This is transformational, not just transactional! And it leads to action based on the client owning their own situation.
This is the key to developing deeper relationships with your prospects and clients and dramatically improving your ratio so that you can convert a much high ratio or referrals into clients.
Think through other great questions you can use throughout the other stages of your fact finder and planning meetings. Or better yet, watch the latest episode of JIM’s TAKE on P2P Academy to see some more examples. Most importantly, make sure you are going deep with your clients not just asking superficial questions to fill out your forms.
I believe that the career of a financial advisor is the best job you could ever have.
You have unlimited income opportunity. Nobody is in control of the size of your paycheck other than you. You don’t have a boss. You can manage your own schedule, decide when you work and which people to meet.
However, with all this freedom over your own schedule, comes responsibility. Many reps work 10 hour days without spending one hour earning a dollar because they fail to spend time on the revenue producing aspects of their business.
Managing your schedule and deciding how to structure your day is a challenge. Today's "work from home" environment presents a whole new unique set of challenges and opportunities.
On one hand, you could be sitting in sweatpants all day, watching countless hours of the news, and thinking "I can't wait until I can get back to my normal job."
On the other hand, you could embrace the mentality of top advisors and SEIZE this opportunity. In this environment, you could be having more meetings and reaching prospects on the phone at a higher rate than ever before. People have never been more in need of a trusted advisor and by being forced to conduct all meetings virtually you are in a phenomenal position to operate at the highest levels of efficiency. The key is to understand and implement the concept of "billable hours" into your practice.
Billable hours exist in other industries, if you have ever worked with a lawyer you are familiar with the way they use billable hours. These are the hours that are paid for directly by the client. For our purposes, I define a billable hour as, “an hour of work for which you are paid.” In our work that looks like one of two things:
The first qualification for a billable hour is an hour spent with a client having a meeting for the purpose of moving your business. While phone meetings, Zoom meetings, and other online meetings are all valid client meetings, you cannot mistake meetings to simply catch up or gather information like outstanding underwriting requirements, as a meeting that qualifies for a billable hour.
The second qualification for a billable hour is a simple equation. Every 30 phone calls you make for the purpose of making an appointment is one billable hour.
Now that you understand what qualifies as a billable hour, ask yourself, "How many hours in my day meet that criteria?"
Typically, when I sit down with a rep and review the billable hour concept, they have an “aha moment!” They realize that something needs to shift, but don’t know what is getting in the way of their growth. Let’s break that down, starting with an evaluation of what it is you’re doing in the hours that are not considered billable.
The most common culprit is a lot of admin type work. Many reps can solve this problem by hiring more staff or utilizing the capable staff members they are currently employing. Perhaps you’ll find you’re spending an exorbitant amount of time looking at emails or LinkedIn. Begin thinking through 2-3 times a day when it makes the most sense to take out time for email and commit to only working on it during those times.
Once you’ve spent time combing through your day and considering what you are doing in your non-billable hours, you can begin eliminating the low-hanging fruit. By moving responsibilities and structuring the day into pockets of time, you can begin to watch your billable hours percentage grow.
The billable hour's percentage, or efficiency rate, is determined simply by dividing your daily billable hours by the hours you work in a day. Let’s say you work an average of 10 hours a day and you have 4 billable hours in a day. Your efficiency rate is then 40%.
Throughout my career, I have seen the most successful reps operate at a 60% efficiency rate. It’s difficult to maintain, but that is why these reps are the best in the business.
Once you have committed to improving your efficiency rate, a core concept to improving your billable hour efficiency is to team up with an assistant, mentor, or manager to help you in three different ways:
1) Figure out your billable hour's percentage
2) Determine opportunities for growth and improvement
3) Track the rate over time and your progress
Once you have walked through the billable hour's concept with your accountability partner, the real work is about to begin. Changing this rate requires a restructuring of your day, your calendar, and your mindset. However, to the extent that you can implement this billable hours concept in your practice, your confidence, professionalism, job satisfaction and overall trajectory of your business can improve tremendously.
Stick with it. You'll be amazed at what is possible.
Albert Einstein once said the definition of insanity is doing the same thing over and over again and expecting different results. This old adage has been repeated time and time again, and yet, many people haven't accepted the fact that if you always do what you've always done, you will always get what you've always gotten.
Throughout my career I have met countless reps who approach me saying they met me at the perfect time. They were beginning to feel defeated, unchallenged, or unengaged.
When you began your career in the financial services industry I’m sure the pace of change helped you feel as if you were constantly evolving - because you were.
However, as reps approach years three, five or seven, they begin to establish their “familiar,” a sense of how you conduct yourself as a rep, how people interact with you and how this business should go. Although there is nothing inherently wrong with your "familiar," it can be the thing stopping you from turning your potential into maximum performance.
This rut is the biggest culprit that breaks down reps’ productivity and sense of satisfaction with their jobs. The question becomes, once you outgrow the rapid pace of change driving you in the beginning, how do you break out of the rut?
In the latest live episode of JIM’S TAKE, this is the topic that I addressed in-depth. Watch the clip from the recording above to see how I explain the biggest culprit and be sure to check out our blog post on the previous episode of Jim's take here.
To see the full episode and learn how to break out of this rut, sign up for a free 30-day trial of P2P Academy using promo code BREAK (valid until 1/30/2020). You’ll also gain access to the rest of the video training on the site with over 160+ training videos designed to help you master your professional sales skills.
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In today’s age of incredible technology, financial professionals have the potential to run their business almost entirely virtually, never meeting clients in-person or face-to-face.
Many reps are conducting a high percentage of their meetings through phone calls, FaceTime, Skype, GoToMeeting or various other online meeting platforms.
This is convenient and likely saves time for both the financial professional and client. On the surface, it seems like this would make sense to do with as many clients as possible.
In a few cases, it does make perfect sense. However, there are far more times when it does not.
In the latest live episode of JIM’S TAKE, this is the topic that I addressed in-depth. Watch the clip from the recording above to see why I think it’s a big mistake to only meet with clients virtually or on the phone.
To see the full episode, sign up for a free 30-day trial of P2P Academy using promo code TAKE (valid this week only). You’ll also gain access to the rest of the video training on the site with over 160+ training videos designed to help you master your professional sales skills.
Click the button below to sign up now!
Over the past 30 years, I’ve had a diverse background in the financial services industry. I spent the first 12 years of my career as an advisor and lifetime Million Dollar Round Table (MDRT) qualifier. Then, I became a managing partner of the Effner Financial Group, managing 117 full-time advisors, insuring over 65,000 policyholders and a face of amount of nearly $27 billion. Now, each year I work with hundreds of reps across the country helping them transform their potential into performance.
One of the key elements that’s made me successful in each of these stages is my belief in permanent life insurance. Clients tend to make purchasing decisions through emotion not logic. So it is critical to your success as a financial advisor to find out what you believe. Those beliefs will shine through in your presentations to clients. If your beliefs aren’t in line with your language and actions, they’ll sense it. However, when everything’s in alignment it makes you a far more compelling and effective financial professional.
With this in mind, here are three of my strongest beliefs on permanent life insurance.
First, permanent life insurance is a great forced savings plan. The reason is that people pay their life insurance premiums automatically in order to keep the policy. They may miss contributing to their kids’ education plan or their IRA due to competing priorities, but they’ll never miss a premium payment. I know that I haven’t.
As proof, pull up a typical clients’ financial history. Their biggest asset, other than their home, is usually a 401(k), which is also a type of forced savings. Like permanent life, it doesn’t require clients to have a tremendous amount of self-discipline to achieve a positive result.
If you ask a client, “Mr. Prospect, you’re 35 years old with $100,000 in your company’s 401(k). How much would you have if you could have spent the money?” Most will answer “none.” The importance of forced savings cannot be overemphasized.
Unfortunately, the dilemma for most clients is that their 401(k) is not enough. They need to replicate the forced savings element in their personal planning, and permanent life provides the ideal vehicle.
Advisors often adopt a self-defeating attitude about permanent life insurance. Before a meeting, they might have thoughts like, “A thousand bucks a month is a lot of money” or “twenty to thirty years is such a long commitment.”
If these thoughts get in your head, imagine how your clients will feel! A commitment to a long-term savings program is exactly what your clients need. In fact, if they had it 5 or 10 years ago, they would be so much better off today.
The tax treatment of permanent life is a big deal for your clients. They can have an asset that builds up for decades with zero tax liability. Tax deferral is one of the greatest gifts the government has to offer. Deferring taxes means that as long as your clients leave the money in the account, they do not have to pay tax on the accumulated dividends, interest, and/or capital gains. How many other assets offer this great benefit?
You can tell how good the tax advantages of permanent life are when the government tries to impose some limitations. There are modified endowment contract (MEC) rules that limit the amount you can contribute and still qualify for the favorable tax status.
Think of it like the Roth IRA, where the government also puts limits on the amount that can be deposited. Help your clients understand how the tax status of permanent life will make it easier for them to achieve their financial goals.
The belief that I’m the most passionate about is that everyone needs life insurance when they die. Permanent life insurance has a guaranteed death benefit whether someone dies at 30, 50, or 104.
Suppose you meet a 35-year-old couple with young children. They know they need life insurance to protect their family. However, in the back of their minds, they are thinking that they only need life insurance for 20 years or so. At 55 years old, their kids (hopefully) will be on their own, their house will be paid off, they’ll have plenty of money, and life will be grand. They think they won’t need life insurance anymore, and, therefore, term insurance is a good solution.
Logically, this scenario might make sense. Yet if you think about your clients who are 55 years old, who feels like that? The short answer: nobody. They are still concerned about not having enough for retirement, still have debt, and their kids’ college tuition is a drag on their budget. They will have a need for life insurance beyond age 55. At 35 they can’t see it, but your job is to help them see it.
Next, consider a recently retired married couple with $1 million in assets under management. They have children and grandchildren. This couple has both a fear and a desire. Their fear is that they will outlive their money and be a burden due to health or long-term care needs. Their desire is to create a financial legacy for each of their kids and grandkids.
Based on their fears and desires, they will attempt to preserve the $1 million, not spend any of it, and live off their Social Security income. However, imagine if they had purchased a permanent life insurance policy while they were in their thirties, and funded it for twenty or thirty years so it was paid up when they reached retirement. Their lives today would be so different!
Their permanent life insurance policy would free up their other assets, ensuring that they could leave a legacy. They could enjoy spending the $1 million in assets on their own lifestyle needs. Yet, without life insurance, they’re stuck worrying about how much they can spend and still accomplish their legacy goals. It’s important that people are aware of these possible outcomes when they are in their thirties and forties.
These three beliefs are part of my core beliefs of why permanent life insurance is so important. Internalize these beliefs and I promise you that it will help you become a more effective financial professional and strengthen your sales process.
However, these beliefs are just the tip of the iceberg. For a discussion of all seven of my beliefs on permanent life insurance, check out the “My Beliefs” course in my P2P Academy. The My Beliefs course has 44 training videos that cover my beliefs, not just on life insurance, but on disability insurance, saving for retirement, long term care, overcoming fear, and more.
It’s one thing to read these posts, but you’ll get more out of this by being able to watch these videos, hear and see me, and then watch them over again until you’ve mastered your mindset. Best of all, you’ll just be getting started since we have over 150 training videos on P2P Academy that cover everything I’ve learned throughout my 30 years in financial services, including proven sales processes and language in all stages of the sales process, from prospecting to annual reviews. Best of luck to you!
