Recruiting centers: quality marketing tools remain key to recruiting and retaining successful insurance sales professionals.

The challenges to developing best practices for attracting and retaining top financial ser vices sales professionals are tied to changing business strategies.

In the 1990s many thought big financial supermarkets with well-known brand names were a window on the future. A decade later, huge financial brands are now shedding businesses, product lines and distributors that are not a core competency or a profit center.

Broker/dealers continue to see their margins compress, but are expected by their registered representatives to deliver an expanding array of services. New restrictions on wholesalers' soft dollar activities and giveaways combined with added pressure to see more representatives and build more relationships more quickly are straining their ability to recruit and train producers.

Look beyond these challenges and it becomes clear that in order to recruit and retain leading professionals, financial services organizations--whether they are insurance companies, broker/dealers or banks--will have to be more creative about differentiating themselves in the marketplace. They will have to deliver new strategies that clearly show the financial professional how that organization will increase the recruit's success over the long term. As commodification continues and products grow ever more similar, a growing number of representatives are looking for firms that will help them both develop qualified prospects and sell products. But, how can this be accomplished?

Differentiation Equation

Perhaps the most compelling answer lies in the delivery of leading-edge sales and marketing tools that quickly and positively impact sales success. A value proposition highlighting such sales and marketing strategies appeals to advisers who seek to expand into new markets, leverage cross-selling opportunities and increase assets under management.

For example, why do independent broker/dealers typically fail to earn a share of their registered reps' fixed insurance and annuity business? In most cases, registered representatives perceive their broker/dealers as unable to provide value on the fixed side that is sufficient to destabilize existing relationships with fixed product providers. In an attempt to win their reps' fixed business, some of the larger broker/dealers have introduced in-house brokerage agencies that offer above market commission levels as an inducement. Others have made outsourcing arrangements with large independent marketing organizations or brokerage agencies. These strategies ultimately will fail when representatives are confronted with competition from noncommodified, marketing-driven alternatives. Which would a rep value more? The opportunity to make an additional 10% on a given sale, or a proven strategy to double or triple sales?

Representatives want to build their business based on strong client education, which leads to even stronger client relationships. They would prefer proven marketing tools to multiply their sales efforts. These tools must focus, first and foremost, on excellence in persuasive, understandable, compliance-approved content on a variety of complex financial products and topics, such as retirement income distribution planning, equity-indexed annuities, and high-end life insurance protection planning. A suite of materials should all work together seamlessly and include a variety of consumer multimedia presentations as well as individual rep-branded Web sites that stream these same presentations. The Web sites expand the reps' marketing reach, stimulate sales interest, and, in many cases, make a remarkable impact on their clients' ability to understand complex products and concepts. The marketing program should also offer printed marketing materials, seminar selling systems and simplified proposals.

Broker-dealer Invest Financial Corp. saw the value of using a strategic marketing program to cultivate more business and recruit more representatives. The management team wanted a way to bring the reps' fixed annuity business through their firm, while also helping representatives increase their variable annuity and mutual fund sales. Their solution? Use sophisticated marketing tools as the carrot. The company now offers its representatives a suite of leading-edge marketing materials and multimedia sales presentations that gives them everything they need to develop sales across multiple markets and ignite the reps' ability to exploit emerging sales opportunities.

In exchange for this compelling, new marketing program, the representatives agree to put 100% of their fixed annuity and life insurance business through the broker-dealer. The early results are excellent. To date, 60% of the firm's registered representatives have signed up for the program. The broker/dealer has enjoyed a significant increase in revenue from fixed business and it is attracting new representatives. Initially offered to its independent reps, the marketing tools are now being successfully extended to the company's many bank programs, illustrating how value propositions centered on powerful, conceptual marketing tools and strategies hold out the potential for a massive realignment of distributor loyalty.

Relationship Constraints 

Another recent dilemma facing the industry is the increased scrutiny by regulators on how mutual funds and variable products are sold from revenue sharing to 12(b)-1 fees. Regulators are concerned that registered representatives may be faced with a conflict of interest if they accept gifts, dinners, or trips from insurance company or fund family wholesalers and don't disclose the arrangements to their clients.

Relationship building with representatives is the foundation of the wholesalers' business. Their activities may include socializing with brokers, buying dinners, funding client appreciation events and giving various gifts. Today, many firms are prohibiting any type of activity that smells of conflict of interest. Plus, there is even greater pressure on wholesalers to see upward of 40 brokers, representatives or agents a week to keep their firm's name top of mind. How then can wholesalers truly build relationships? What can they offer to create value?

The answer may be found again in marketing. Most wholesalers can offer basic product information from their companies. Some may even assist representatives with seminars. In the near future, the most successful wholesalers, the ones who attract the best producers to their organizations, will be the ones who can offer new marketing concepts and train the representatives on how to use them effectively. These wholesalers will bring the full array of tools to the table, offering value that representatives can't find anywhere else. In addition, financial companies will be able to recruit great wholesalers only if they give these professionals the support they need to be successful.

So, while the insurance industry continually changes, with new products, new regulations and rules, what remains the same is the importance of adding value and helping representatives increase sales in a tough environment. The way to recruit the best professionals continues to be providing marketing and training tools, techniques and technologies to help them succeed. And, more sales mean more revenue for the financial services organization.

Key Points

* Leading-edge sales and marketing tools such as multimedia sales presentations can attract and help retain agents.

* Marketing concepts that acknowledge new soft-dollar restrictions can give broker/dealers an edge with agents.

Contributor David A. Macchia Sr. is president and chief executive officer of Wealth2k, Hingham, Mass.