Newbie: Need Career Advice: opening practice

May 18, 2008

  1. InsuranceCFP
    Offline

    InsuranceCFP New Member

    Posts:
    2
    Likes Received:
    0
    Just found this great advice and have read through some of the posts already. I was hoping some of you experts could give me some advice.

    A little about me:

    I am looking to open up at Financial Advising practice and also sell life, health, and long term care insurance. I would also like to sell Med Supps.

    In terms of cash flow, I have 110k saved up, and am 26 years old. I am single and can live off about 12k a year, so I have a great reserve built up.

    As far as experience, I have worked 1 year for an independant insurance agency selling life, health, and a few med supps. No P&C experience. I also have worked as a broker in a call center environment for 2 years as a stockbroker and financial advisor.

    Im hoping to open up an RIA and be a full service broker.

    I am just in the beginning of my planning. I am hoping to open an office in Charleston, SC and am just beginning to research what steps I need to take.

    For prospecting, I was thinking of door knocking. I am somewhat inexperienced when it comes to sales, but I do have a wide social network.

    Going independant and having my own practice is my only consideration, and I refuse to work for anyone else. Also I am a quick learner who is eager to learn more.

    Anyone have any advice on how/what I need to do before I can open my practice? Any advice on my plans would be much appreciated!
     
  2. theinuranceguy
    Offline

    theinuranceguy Guru

    Posts:
    936
    Likes Received:
    3
    Congrats on your accomplishments my friend! There are alot of people, regardless of age, that cant say they have done the things you have.

    Some advice I would to a person just going independent would be:

    1. Get High Contracts. Ask for GA contracts and see what production you need to get up to MGA and SGA levels.
    2. Get a release in writing before you sign anything. Most Marketing organization do not release people when they want to move to another hierarchy. This will cause you to wait at least 6 months. Get in writing that you will be able to get a release whenever you want.
    3. When at all possible, get paid directly by the carriers, do not assign your commission to a broker house. Some companies (Medicare Advantages in particular) will force you to assign commissions to an FMO.
    4. Find a niche and become an expert. Try not to overwhelm yourself with LTC, Annuities, Final Expense, Medicare Advantages, Medicare Supplements, Indemnity Plans, Dental, or whatever all at once. You will get burned out. But learn one product, and become an EXPERT. Then expand from there.
    5. After you find your niche figure out how are you going to find clients. LTC/Annuities? Maybe a seminar. Final Expense/Indemnity? Maybe Door Knocking. Medicare Advantage/Supps? Probably Direct Mail or Cold Call.
    6. Make sure to do an entire fact finder in the home. Even though you are in the home talking about LTC. You still want to ask about Medicare, Interest on savings, Final Expense and then pivot to LTC. IF there is a need set another appointment for that need.
    7. Start off small. Dont think you have to get an office right away and higher a staff. Start from your home and see how you like it. At first, try to keep your overhead as low as possible.

    I wish you the best of luck. Feel free to call me if you ever have specific questions.
     
  3. Insurance Phoenix
    Offline

    Insurance Phoenix Super Genius

    Posts:
    105
    Likes Received:
    1
    You are 26 and have $110,000? Sounds like you may want to keep doing what you've been doing, whatever that was.
     
  4. SportsNut
    Offline

    SportsNut Guru

    Posts:
    2,381
    Likes Received:
    7
    State:
    Indiana

    It would be helpful to know what and how you have been successful within the P&C agency ranks...? The only reason that I ask, is many times (especially young folks), we want to jump out on our own, and in doing so we stop doing the very things that made us successful elsewhere. So an honest evaluation of how you go there, (based on a daily breakdown of tasks) can help determine what you should be doing next.

    If you do independent, you should associate with an independent B/D who also offers RIA cookie cutter services. Otherwise you end up having way too much time and cost associated with reinventing the wheel of compliance. You can find a comprehensive listing of them at the link below:

    http://www.investmentadvisor.com/directories/0602-BDDirectory-FORWEB.pdf

    Once you go independent it may be unrealistic to think that you can maintain the low financial profile, because being in business for yourself does cost money... so be certain to accurately assess this in advance. You may find that you are better to associate with other like minded investment professionals, as loose partners or simply having commonality of goals, which will reduce your overhead drastically. There is no override or supervisory role there, just common goals and work ethic under the same roof, at a reduced cost. This can also present a much more professional image to potential clients; "The Firm", so to speak. Years ago I had a similar arrangement, and it worked well.

    Door knocking is the lowest cost form of prospecting. Ut should allow you to build a list of prospects from which to begin... although cashflow may be slower than you expect, starting out on your own... so be certain to fully understand the realistic time line involved.
     
  5. InsuranceCFP
    Offline

    InsuranceCFP New Member

    Posts:
    2
    Likes Received:
    0
    Right now, Im working 60 hours a week. Thats why I have been able to save as much as I have. I am not going to sell P&C because I want to be primarily a financial advisor, but able to do insurance on the side for those that dont want to give me their investments.....which is why life, health, and ltc would come in handy.

    "1. Get High Contracts. Ask for GA contracts and see what production you need to get up to MGA and SGA levels."

    Im not really sure what this all means, what is ga, mga, sga, and are these through some sort of broker?

    2. SportsNut, given my plan, do you recommend any of those companies to set up my RIA through? I will need one that will take on a Newbie with no book of business. I would like one that would allow me to charge a 1.25% asset fee for the financial assets, yet allow me to get paid by commission on insurance products. Also, any idea on if any of those companies listed will assist me in setting up my RIA?

    I am willing to expect a couple of years before I become profitable. I will probably just rent a house and live there and have my office there until I start making enough money to buy some office space....good idea?
     
  6. xrac
    Offline

    xrac Guru

    Posts:
    11,542
    Likes Received:
    88
    State:
    Indiana
    GA = General Agent
    MGA = Managing General Agent
    SGA = State General Agent ?????????????????

    These are levels of contracts you will have usually directly with the company. The higher you go the better the payout and more production required. I am not sure what SGA is. I guessed.
     
    xrac, May 18, 2008
    #6
  7. mercedes350
    Offline

    mercedes350 New Member

    Posts:
    8
    Likes Received:
    0
    Why not build a virtual agency so you can build a bigger team. You can build in US & Canada. Also I would keep your expenses down.
     
  8. vic616283
    Offline

    vic616283 Expert

    Posts:
    38
    Likes Received:
    0
    Im doing the same thing. Im putting off the RIA thing until I have good enough cash flow from my insurance business. But Im gonna go the BD route instead. I think RIAs dont offer 10% of the value they take so that model of ripping people off and doing mental gymnastics to justify it doesnt appeal to me. I'll open up a BD just so i can be a true, complete financial advisory firm and i can avoid the problem of "when all you have is a hammer, everything starts looking like a nail." This is a problem I see with almost every insurance guy.

    PLus a BD takes $9k to open up and $4k ongoing renewal fees per state. $12k if you want a consulting firm to hold your hand (which you most likely do)
     
  9. Guest
    Offline

    Guest Guest

    I know its an old thread but SGA used to mean Senior General Agent
     
    Guest, Aug 29, 2013
    #9
  10. smokin goose
    Offline

    smokin goose Guru

    Posts:
    2,963
    Likes Received:
    3
    State:
    Kentucky
    You forgot to factor in that some of that 110k may be gone. Being as this thread was started 5 years ago. :-)
     
Loading...