NAILBA Perspectives - September/October 2014 - (Page 9)

chairman's corner Future of Brokerage BARBARA CROWLEY NAILBA CHAIRMAN OF THE BOARD T he subject of the future of brokerage has been under discussion since I joined Brokers Clearing House, Ltd. over 30 years ago. The answers have changed for many aspects of our industry and remained unchanged for others. Opinions on this subject vary as one would expect. To imply that I hold the secrets to the future of brokerage would be ridiculous. To think I would share such secrets on these pages is also comical. I will however share my observations and opinions with you. What We Sell Consumer needs have shifted somewhat over the years. Income replacement, family protection, business insurance, and health insurance remain among the more important needs. However, extended longevity has increased worries about the cost of living too long. Now the consumer worries not only about dying or becoming disabled, but they are deeply concerned about what will happen when they retire and if they outlive their income. The variations of products offered by insurance companies have become so proliﬁc, complex, and complicated that insurance brokers and their clients have trouble differentiating between them and understanding how they truly work. I am concerned that complicated and confusing bells and whistles added to products are special features that confuse consumers. They want to know what they are buying is a good deal-and that it will be there when they need it most. The industry has compromised its strength by not showing the ability to offer simple solutions to complicated problems. I believe the future of brokerage product sales depends on our ability to bring simplicity to the process and to meet the long term ﬁnancial needs of the consumers with products that can be understood. Who We Sell The industry has changed from what was once a silo model where ﬁnancial and insurance professionals focused on their core product lines, to a more holistic product offering. While this creates an amazing opportunity for brokerage ﬁrms, it also makes our work more difﬁcult than in the past. In the old days, agent training focused on teaching them how to prospect, identify the need, and close the sale. For years our industry moved toward long PowerPoint presentations trying to explain the products and how they work. There has been positive movement toward needs-based and concept selling again, but training lags behind on many fronts. The complexities of many products and riders require extensive product training. This means brokerage ﬁrms need to be prepared to provide these services. With growing distribution coming from property and casualty ﬁrms, wealth managers, banks, credit unions, and investment representatives, there is more need than ever for education, support, and hand holding. Here's where I see brokerage continuing its diversity. There is clearly a huge market for mass distribution, either through brokers or direct to the consumer. There is also opportunity for smaller, more personalized brokerage ﬁrms with local presence to become very valuable to the populations of professionals who are not selling life, annuities, LTC and DI as part of their offering. I believe there will always be diverse audiences with different requirements. Brokerage agencies will need to determine which path they are best able to follow. How We Sell Technology is changing the game. Not only has it reduced barriers to entry in our industry it has changed the way we do most everything. The rapid changes keep us constantly reviewing our processes. Social media is becoming an integral part of our operations and needs to be embraced for the future. I have heard and read materials from Amy McIlwain and she lays it out better than most. These thoughts are from her material. If you could be successful reaching more people regardless of your marketing budget or business size-wouldn't you? "Social media levels the playing ﬁeld." If you could have the budget to build a brilliant marketing campaign aimed at your target audience, build your brand, and cost very little- wouldn't you? "Social media is marketing at its ﬁnest." How we sell is so affected by every aspect of technology. My opinion here is that to be part of the future of brokerage we need to accept that very little is as it was and we need to be excited to look at the new opportunities to prospect and communicate with potential clients. However, we need to remember that technology cannot replace those aspects of our business that require personalization. If we expect to penetrate the segments of our business that do not have expertise in the products we distribute, we must be prepared to use whatever means necessary to educate, hand hold, and bring them into our industry. The Future According to Barbara I truly believe that we need more involvement by carriers, vendors, marketing groups, BGAs and brokers in our industry. We need to support the various associations who help to further our industry in one way or another. We need to be diligent regarding government affairs and get involved when and where possible. We need to work together to promote our industry and its rewards to encourage more people to join our profession. We need to feel good about what we do every day because ultimately we work in one of the best industries in the world. We provide more beneﬁts, more solutions, and more peace of mind than anyone else. At the end of the day what do consumers want? They want simple solutions to complicated problems. They want to understand what they buy and what it will do for them, and most importantly, they don't want it to disappear or dissipate so they can be assured it will be there when they need it most. I believe the future of brokerage is bright. It's harder, it's different and it keeps changing. To be part of that future we need to change too! www.nailba.org 9 http://www.nailba.org

Table of Contents for the Digital Edition of NAILBA Perspectives - September/October 2014

NAILBA Perspectives - September/October 2014
Contents
Chairman’s Corner
CEO Insights
Servicing Orphan Policy Holders: The BGA’s Role
NAILBA 33 Preview
Life Happens
Future of the Independent Marketing Organization
NAILBA Charitable Foundation
Member Profiles
Agency Successor Networking Group
Agency Resources
A Path Forward: Part 1 of 2
Reading Ahead
Calendar of Events
Index of Advertisers

NAILBA Perspectives - September/October 2014