"
Adapt or die "
-
Norman G.Levine CLU, ChFC ( Top of the Table; Life and Qualifying member, MDRT )
Realizing that my practice must do more than just product peddling and single-need focus, especially after I qualified for my ChFC, CLU, CFP in early 2003, I stumbled this classic book written by our industry legend, Norman Levine, From Life Insurance to Diversification ( I prefer the word INTEGRATED now & I will tell you why later , it changed my life forever.
Let me tell you this "gem" among many classic books written by great people in the life insurance ( LI ) industry.
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It was published in 1987 ( yeap, 21 years ago! ) and Norman Levine wrote to share his experience about how he re-engineer his practice/business model in response to the changes in the LI industry changes in USA at that time.
Mind you, the changes experienced by Norman in USA in the 1980's are exactly the SAME as what we are experiencing now in Malaysia in the past few years!
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Quotes from the book:
Chapter 1: Why this book
• Why this book – until the mid-1970’s, life insurance selling was a relatively traditional and well-established business.
It was almost exclusively dependent upon life insurance agents to market what were basically very traditional and sometimes antiquated products
• Everything that had been traditional and constant suddenly experienced a dramatic evolution which some perceived to be a shocking revolution – banking, stock brokerage houses and most particularly the LI industry struggled through innovation and experimentation to cope with this noticeably evolving environment.
• Like everyone else, I found myself questioning every aspect of my business. Products that I had relied on were questioned or challenged by potential clients and my own self-confidence began to erode.
• Since all the books I have ever read and all my sales presentations and procedures I had ever used were based on the challenged yesterdays, I could find no proven track to run on.
I, like most other practitioners, continued to make do with procedures that still had some limited effectiveness, but at the same time I began to experiment and invent new wheels.
Finally there was a little light at the end of what had been a frightfully long tunnel.
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Hold your breath. Read on.
I finally found that there's light at the end of the tunnel after reading, thinking through and researching into what Levine said in this wonderful book over the last 5 years, which I suggest that you read it yourself.
In his book, Levine said:
• Now just a few years later, my personal sales operation and the organization that I built to support that operation, only vaguely resembles the traditional organization that had worked so effectively for the first 30 years of my insurance career.
For the first time in many years my business and the future are very exciting.
I am dealing with a more select group of prospects and clients.
These people are more stimulating, challenging and more rewarding in every way.
Now I can really feel what Levine mentioned above in his book and I like to share my thoughts in this blog with those colleagues in the industry who feel that
you must "re-engineer" your business/operation model in order only to survive, but also to thrive in this ever changing financial services industry in Malaysia.
One concept in Levine's book struck me:
• Let me begin with an analogy – if you are going to buy some new cloths, you could go to a store that sells ready-made clothes or to a custom tailor. Usually price is the main basis for your decision.
For most people, it is simpler and cheaper to buy ready-made but have to live with the compromises because you can’t get the exact fabric, or print or color you really want.
Even if all of those are perfect, you have to find the right style. Or you may prefer to go to your favorite tailor, pick out the exact fabric, pattern and color, and then get fitted very precisely as the finished garment is perfect for you.
• In the modern total financial services world all solutions, even at the most basic level, require a
customized approach
• ## due to the unique needs and financial situations of our prospects, and with the great varieties of products and services now available, each practitioner must make some basic decisions about which type of prospect they wish to serve and what products and services necessary to do the job right.
– the market;
- the products; and
- the salesperson’s current level of expertise.
• Pursuing the ready made vs custom made analogy, there have been changes in consumers’ attitude – increasing demand for ‘ high touch ‘ in the sales process – they want someone to care enough about them as individuals, to feel their financial concerns, and to respond with sensitive financial solutions.
In effect, all consumers want custom clothes but frequently at bargain prices. Happily, with today’s technology, we can provide more comprehensive and sensitive solutions to problems at a more modest cost than ever before.
In other words, we can do it better, for less, more effectively, with greater profit if we plan and implement effectively. ------------------------------------------------------------------------------------
Bingo!
That's it! I bought Levine's idea. So after I have qualified for all my " kuali " ( Quali -fications - ChFC, CLU, CFP )I wanted to do FINANCIAL PLANNING !!
so I got hold of all the financial planning books that I could find, to the extent of buying the expensive FP textbooks in Singapore! I also attended many FP courses and wasted my money on the so-called financial planning softwares!
Then I realized a few things:
1. Most Malaysians are not ready for financial planning; especially if you tell them you are going to charge fee!
- They have been getting the 'advice' from friends, financial products salespeople for free.
2. Financial Planning is important but not urgent.
- You tell them about topping up on their life insurance especially during financial crisis now, they say no budget;
- You tell them about retirement planning, they say can defer for a few years until economy improves
- You tell them that it is important to write their Will, they procrastinate ( delay )or say they don't have many assets
3. Consumers can't see or touch or feel the value of a written financial plan I had been a lecturer for CFP since late 2002. I have some CFP lecturing friends whom I met in one of the "train-the-trainer" course. After talking to them, I realized that many do not practise the comprehensive approach to FP ( meaning analyzing all the areas from cash flow; personal networth; to tax planning; insurance planning; investment planning; education planning; will & estate planning and then find out the gaps and the recommending the solutions & implementing it ). I also talked to some ChFC holders. Many do not practise too.
For some of the reasons which you may agree; disagree or want to argue with me, the fact is that many agency members in life insurance and unit trust industry or accountants/company secretaries who are ChFC and/or CFP DO NOT practise comprehensive financial planning. Some 'regress' back to selling products or back to single need planning.
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You may argue with me that some do multiple-need planning/selling. I agree. But most are at
"cross-selling" ( meaning carrying a range of financial products and get consumers to take multiple products )To me, banks are also at "cross-selling" level as well.
The reason is that players in the industry are conditioned to focus on products / single need and find it very difficult to think " client-focus " ( which is being taught in financial planning courses alike ChFC/CLU/CFP ). Why?
My theory - Evolution - the industry is still evolving and insurance companies and unit trust companies still dominate the scenes.
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But that does not mean that agency as a species should be just reactive to the ever changing environment and becoming extinct; instead one should be
PROACTIVE in
changing one’s THINKING and adopt a new concept of doing business.
My answer to that challenge is doing my own
R & R ( Reading & Research ). So, I challenged myself to lecture so that I keep up my my FP knowledge and because of the questions raised by adult students in my class, that spurred me to think through a lot of issues.
As a result of 5 years of intensive R & R ( reading; lecturing; writing articles for Borneo Post & Smart Investors; hands-on cases; & researching into problematic Estate Planning cases from my wife who is a practicing lawyer ), I have proudly developed my advisory & planning model I label it as:
Integrated Estate Planning ------------------------------------------------------------------------------------
As a result of my continuing research, I found that the estate planning problems of clients are
not FULLY addressed because their estate plan are un-coordinated and fragmented. For more details, read the explanation in my professional web site.
( please click on links on the top right hand corner of this blog )
Enjoy your reading!
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