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The Lifetime Value of a Financial Professional

The financial services industry continues to struggle with the issue of sales capacity. Not enough new professionals are entering and staying in our industry to replace those who are retiring or leaving. Where will the sales talent – and their production – come from in the future? Although firms in both investment and insurance channels are re-engaged and making progress in stabilizing the sales force, more must be done to stem the tide.

Given the challenges of sales capacity faced by both manufacturers and distributors, it is beneficial to take a holistic view of the lifetime value of a financial professional. By doing so, organizations can benefit regardless of whether they actively recruit and employ sales professionals or partner with them on an independent basis.

Engaging a financial professional over a lifetime means developing a value proposition at each of four stages:

[1] Recruiting and Selection. What is your talent acquisition strategy? How are you differentiating your brand from other professional sales opportunities, both within the industry and outside the industry? Are you recognizing what today’s candidates value most in a sales position? Today’s successful organizations will be looking outside the box (and the industry) for creative ways to source and engage top talent.

[2] Onboarding. Is there a connection between selecting financial professionals and onboarding them? Or is there a disconnect? If newly hired professionals are not engaged early on, it will be an uphill battle to keep them on board and help them succeed.

Experienced professionals must be particularly engaged, not only with an appealing compensation and incentive plan, but also a strategy to grow revenue and establish the practice quickly. Successful organizations need to provide a framework around training, mentoring and support to build the foundation of a long-term practice model.

[3] Practice Growth and Development. Once financial professionals are established, firms can offer appealing support models to help take them to the next level and build a true financial services practice. Leveraging your firm’s access to products, services and support can help establish a clear market position, build and protect practice value and increase sales capacity. Focusing on sales effectiveness training helps advisors and agents better penetrate existing client accounts and open new market opportunities. Leading-edge practice management and social media platforms that drive efficiency and expand capacity can make a real difference to a practice. 

[4] Succession and Business Transition. Organizations have a stake in practice transition to ensure an ongoing relationship with the ultimate successor.

Business and transition planning is a long-term (10 years or more) endeavor, particularly for independent practices. Considerations such as revenue mix, client demographic profile and the growth trajectory of the business all contribute to valuing a practice. These factors cannot be addressed overnight.

By engaging today’s advisors and agents across the four stages of their professional lifetime, organizations can develop enduring relationships with top professionals. Organizations that can effectively establish and strengthen the links among these four stages will position themselves to attract and retain the best performers today and well into the future.

Patrick T. Leary, MBA, is associate tmanaging director, Distribution Research, for LIMRA. He may be contacted at [email protected] [email protected].

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