Why is It Getting Harder to Find Good Agents?

[Guest]

Don't you just love when someone is talking about how dumb others are and they use the wrong word in their rant? It's "than" not "then". Hilarious!

You got a good ha-ha out of that? I'm glad.

The piece was partly about how so many agents lack enough education to be successful in getting into any other occupation other than selling insurance. How many occupations can someone go into with a 10th grade education and not be rejected ... and even be successful (although the odds are against it?)

I'm sure many here know the answer. It's even easier to figure out than "then" and "than!"

Let's see how many can punctuate this ditty:

"That that is is that that is that that is not."

We'll know which agents got past high school. (When I taught school in West Virginia I would give the kids this riddle on the first day of class.)

I hope some of you get a ha-ha out of this as well.

 

[tins]

Let's see how many can punctuate this ditty:

"That that is is that that is that that is not."

Looks like fun! I'll give it a go.

That, that is, is that. That is that, that is not.

??

I have about an hour before I go out. Let's do 2 more>>

 

[Guest]

Looks like fun! I'll give it a go.

That, that is, is that. That is that, that is not.

??

I have about an hour before I go out. Let's do 2 more>>

Good try. It goes like this: (say it FAST out loud BUT pause a second at each comma)

That that is, is that, that is that, that is not.

 

[Norwayguy]

I'll bet that when your uncle started out the vast majority of agents were "captive" in that they began their career with a single carrier and while they might have moved to another one over time, they probably did not go the indie route.

The career houses, like Met, NYL, Equitable (where my father started in 1958) and a large number of other carriers had educational standards as well as "cultural" standards to be hired. Most required several interviews, perhaps a general intelligence exam, and even some, a college degree or be working toward it. If nothing else you were expected to know how to read well, write well, choose a conservative suit and tie a necktie.

These days anyone who is not a felon and who can fog a mirror can be an agent. There are no gatekeepers like there used to me. Entry is easy and cheap. Anyone with a 10th grade education can pass the insurance exam for most states and I believe that insurance (like real estate) is where so many people "go" when they can't find a job doing anything else.

Also, the paradigm has changed. The carriers no longer spend a lot of money on agents for training. The concept today is to appoint as many agents as they can and hope each writes one or two cases before they wash out. It cost virtually nothing to appoint an agent... a few dollars for a background/credit check and a few dollars to the state DOI to register the agent.

The general agency distribution system was supposed to be a mechanism to "winnow out" the dullards as well as train those who passed the standard. However, there are no standards and thus no vetting.

I don't mean to imply that there are no "smart" agents out there. But I do believe that there are many more "unintelligent" agents then there used to be because the requirements are either low or non-existent.

Just my opinion. YMMV.

Al3,

I believe our industry changed dramatically when the state of NY imposed its comp guidelines on carriers that do business in NY must also limit commission on agents in other states if that carrier is going to be allowed to do business in NY. It left little to know room for Agencies to grow managers and pay them....The paradigm has also shifted from when the Carrier channel produced 95 percent of the life volume and now the brokerage channel accounts for about 80 percent...

But I think the real reason recruiters find it hard to find good agents is they recruit new agents and say look if you sell only this many policies you will make $XXX in your first year and they tell them that good agents have a referral business (which is true but those agents didn't start out with those referrals) and have then emulate producers that have been in this business for 20 years and they don't come out and say look kid this is a tough business 95 percent of the agents are out of the business in three years, the rewards are great but you need to work hard push your comfort zone and get out their and talk to people.

 

[tins]

Good try. It goes like this: (say it FAST out loud BUT pause a second at each comma)

That that is, is that, that is that, that is not.

Oh, one sentence...
Baack to study hall for me.

 

[Guest]

Al3,


But I think the real reason recruiters find it hard to find good agents is they recruit new agents and say look if you sell only this many policies you will make in your first year and they tell them that good agents have a referral business (which is true but those agents didn't start out with those referrals) and have then emulate producers that have been in this business for 20 years and they don't come out and say look kid this is a tough business 95 percent of the agents are out of the business in three years, the rewards are great but you need to work hard push your comfort zone and get out their and talk to people.

Peter is spot-on (as the English like to say.)

I place most of the blame on the carriers. They have not wanted to invest in the future of the industry.

I like going to carrier road shows and NAIFA local mini-conventions held once a year here. Easily 90% of the room is age 50 or older.

Where are the young men and women in this industry? I don't see many of them.

What does the insurance sales industry look like to a young guy or gal getting out of college with $50K of loans to pay back? Some of you younger men/women here will have to answer but as I see it, it's not a rosy picture.

I hate recruiters. They sit down with young people and paint them an idyllic picture of big money and independence and self-reliance for joining a captive company. My question to them is that if selling insurance for their company is so great... why aren't THEY doing it?

Except perhaps for law and medicine where the managing "partner" usually makes less than the top rain-makers (i.e. Tommy Jefferson in Harry's Law or House in House!,) in just about every industry these days the home office middle and upper tier of "do nothing" manager-drones and executives make more than 99.9% of the sales force including the very top producers.

Read the annual reports of the salaries that the CEOs and senior executives get (with bonuses) and compare it to the sales guys busting their humps trying to make a $100K (without vacation pay, benefits, etc.)

A young guy or gal getting out of school where they majored in business or perhaps just got an MBA and they look at the insurance industry and they say "fail."

You can spend about 8 months on your own learning how to admin and develop on a Sharepoint server and walk out into the world and get yourself a $70,000 a year job. And a year after that you can quit and become a hired-gun and make twice that. Don't believe me? Go to dice.com and take a look at the job openings, pick one, call one of the recruiting houses and ask what the position pays. They will tell you.

I could be wrong but I see commissions trending downward, mainly because agents will eventually be replaced by technology or by government mandated insurance where agents become order-takers like at the Burger King drive-up window.

For those of us who are in their later years (I'm 64 on Dec. 1) and who don't either need a $100K a year or who don't want to work their butts off, this is a great biz. You can make $30k without breaking a sweat, and 50K by working 35 "easy" hours a week (not goofing off!) Add that to your investment income/retirement plan and you will do well (assuming your lifestyle is not too extravagant.)

But you young guys? If you see a great future of $100K+ a year, year after year after year, in insurance sales I can only hope that it works that way for you but I don't see it happening.

Going back to that young guy or gal who has a degree in business or economics or marketing... do they want to go into insurance sales or would they rather join the HO staff in finance or product development, or IT management or claims management? If it were me, I'd go into the merger and acquisitions dept. because there is bound to be some consolidation in this industry and they guys/gals who can make the deals will be seen as the up-and-comers.

Who has the better shot of moving up the ladder to the big senior exec bucks? Some guy in Altoona selling term life policies as an independent agent or even as a captive NYL guy? Or is it the guy in the home office who is abreast of the company politics, who gets a chance to hob-nob with the power-players, and who has an actual career path of advancement as opposed to just higher sales quotas each year?

This is a great biz for anyone who is seasoned in sales and who is already financially secure. But my hand is out and my hat is off to those who are in this biz as a career... for the next 40+ years.

I'll end this ramble with a simple question and hint to an answer. In this venue, whom do you think are making the big bucks? Is it the sales guys here who are "expert" in their field... Medicare, DI, LTC, etc. Or is it the guys who are selling quote engines, leads, software? Or is it the guys running GA shops?

My bet is either the guy who sells a well-known/respected life insurance quote service, or it is the likable guy who is the lead vendor who is on the forum from time to time.

I live at the entrance to the "gold county" in CA. I'm sure some of you have visited the area where gold was discovered around 1849 (hence the 49ers.) The woman I married is related to an old-line San Francisco family. They started to pan for gold but found that they had a better opportunity selling canvas tents and pants to the guys seeking the yellow metal.

There are no more gold miners. But I'll bet a whole lot of you wear the pants that the family makes. **

Al

** Here is a bit of trivia. The early models of the pants caused a lot of complaints. As most of you know copper rivets were used to keep the seams from pulling apart. There was a metal rivet in the crotch of the pants. The minors would squat around the campfire and that rivet got really HOT! The miners voiced their LOUD dissatisfaction to the company and the rivet was removed and the seam double-stitched instead.

 

[DHK]

I've posted about these issues before (you can do a search to find them), but I'll narrow it down to a few points:

1. More of a 'financial planning' mindset over just selling policies. Most people need life insurance, but they really don't want/need to go through a 30-page fact-finder and a 85 page report telling them how much they should have.

2. The 'financial planning' approach can yield higher premiums, so managers will focus on that aspect so they can get paid faster.

3. It's very difficult/impossible to cold-market a 'financial planning' process to people you don't know. Therefore, you are limited to the people you know and the referrals you HOPE to obtain from those people. If your 'warm market' are full of 25 year old partiers... you'll have a difficult time.

4. The DNC list makes it difficult to follow all the laws and be able to survive just selling personal policies.

5. Therefore, the best people to 'recruit' for financial planning firms are those who are older, have a network of professional contacts and can begin working on larger cases right away.

If that isn't you, you'll have a very difficult time getting started with a financial planning-type firm.

 

[xrac]

We have heard a lot of good input on this subject. The two most recent posts by Al3 and DHK all have good points. I will like to add that part of the problem is too many younger people want a pay check but not a job. Especially a job that will require 50-60 hours each week for the first 1-3 years of the hardest work they have ever done in their lives. Not hard as physically demanding but hard in the sense of staying motivated, dealing with rejection, working a plan, and keeping one's nose to the grindstone.

 

[BNTRS]

Even of you come from a seasoned professional background it can still be a bitch to get this thing off the ground, sure you can make some decent money in the short term working with some friends/family, but once this list is exhausted where do you go? In most cases to monster or career builder.

They key is marketing. And the failure rate is much like any other small business, too little starting capital.

We've developed such an entitlement society that I think young people graduating from college come out with the impression that had been beaten into their head from a young age "go to college because that will guarantee you a better job." Terribly bad advice, but it's sort of the mainstream thought. Al is probably also correct in pointing out the debt loads graduates have, which might make starting out in this industry impossible.

I don't think I'd declare a home office job as the better path to prosperity. Sure the income is more guaranteed, but there's a lot of dealing with office politics and having your future left up to a very small group of people who may not be all that bright.

 

[xrac]

........We've developed such an entitlement society that I think young people graduating from college come out with the impression that had been beaten into their head from a young age "go to college because that will guarantee you a better job." Terribly bad advice, but it's sort of the mainstream thought. Al is probably also correct in pointing out the debt loads graduates have, which might make starting out in this industry impossible.........

BNTRS, this is a large part of the problem. The people most likely to succeed are people with some life experience or younger people with very limited financial requirements. A spouse with a sizeable income, a large financial reserve, low living costs all help one survive. A 26 year old with a wife, one child, a mortgage, student loans, and auto loan payment who needs $4,000 per month just to survive probably should and will look somewhere else because they probably won't make it. The high consumer debt and student loan levels that a lot of younger people have is almost a death sentence in surviving a business start up.