Life Health Professional forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Commission changes would maim young

Notify me of new replies via email
Life Health Professional | 17 Jun 2015, 09:00 AM Agree 0
Regulatory moves on upfront commissions would significantly impact an important segment of the advisor pool.
  • Ken MacCoy, CHS | 17 Jun 2015, 02:33 PM Agree 0
    To clarify the last (above) paragraph:

    Anyone starting a new career requires training ....that you can't learn from a book. The life insurance business is no different.

    Sun Life &/or London Life have captive sales force and therefore with ...few exceptions ... you are only able to offer that companies products and services. However, these established companies have the experience and resources to provide the training required to become a successful life insurance agent.
  • mark m | 18 Jun 2015, 09:41 AM Agree 0
    I am strongly against any additional government/ regulatory intervention. Canada is less of a place of opportunity and more of a place where people can be equally poor. We have too much "red tape" and regulation.
    This will ultimately cause real financial damage to the general public. The regulators or whoever is proposing capping commissions has no idea of what they are doing. There are people who have real financial needs and it takes an insurance agent to go find these people, do the analysis and explain the solutions to them. It is a costly process and the people with the biggest needs will lose out because they take the most work. Agents will just focus on quick and simple insurance. The banks will take over and sell quick and easy. There will be a huge drop in large cases.
    There are not enough life agents so there will be less reason to try getting into the business.
    Captive sales forces will become the norm. Independent brokers will become extinct as the old agents retire. The insurance companies will be bought by foreigners and Canada will be locked out of another industry.
    Prices will rise because there will be less competition and the consumers will be hurt.
    Economically it is similar to back when Argentina and Canada were facing similar situations. Argentina chose to impose tarriffs to "protect" their industries and Canada did not. Argentina is now third world and Canada is currently first world but on its way down.
  • Sean Long | 22 Jun 2015, 02:17 PM Agree 1
    Well i wish that the agents from captive companies were indeed better trained....But the turnover rate is huge in both companies at the moment..If you took the total amount recruited (Remember these people had to go through batteries of tests,study for LLQP,meet the managers and then go through hours of boring on line or video learning) over a 5 year period you would see that the REAL retention rate is about 27%. When the average age of an advisor is 56 something is very wrong indeed...
    .If all the people whom entered nursing,engineering,law,medicine,banking or government positions and only 27% remained in service there after 5 years there would be huge industry questions to ask..
    After 40 years in this business the current training or lack of it is pathetic at best....You have a whole generation that have great computer skills,fantastic texting skills,BUT little no people skills. Yet most of all training that is done now is product knowledge,quote systems,record and file documentation, CYA protocols oh and of course who could forget the great but really successful webinars.
    Recently i was asked to assist and split commissions with two young agents (less than 5 years experience) on rather large cases where the premiums were each over $10,000 i was blown away by the technical quotes and analysis....But in both cases the clients could not make the final purchase decision...What i saw when i met both clients was they were totally afraid of the advisors...The advisors were technically spot on for the solutions but there was no trust,no relationship and no bond at all with the client.....They were aware of the problem,had a cost effective solution but the client just could not relate to all of their computer savvy numbers and wonderful compliant department documents....After meeting him without any print outs and just discussing his problems,from his perspective and what kind of solutions he wanted and his timelines we proceeded to set up a meeting to do the final paperwork.No numbers changed at all.We just talked.
    The point being the agents in both cases had the tech skills but no people skills,they both admitted to not understanding why the client would not buy....Both have come through the "system" one from Sun and the other from DFS. It is indeed a new era where the texting and twitter skills are indeed at an all time high for the young.But the face to face skills and the ability to have a meaningful conversation without having to resort to your iphone or computer in front of the client is what indeed is lacking in our industry.I tried to explain to these young agents that just because you are texting the client does not mean that you are effectively communicating.
    I am seeing a few of the banks now teaching these skills to there front line people for increasing their life and CI. sales.Some are using Helena Pritchards course which seems to work very well for them.As insurers come to rely more and more on technology to cut costs and streamline operations,i wonder if we are still in the business of protecting widows and orphans....I see more and more banks and credit unions investing in people skills and training, that is quickly increasing their sales.While my industry seems to feel that a 27% retention rate is acceptable for advisors and the average age of 56 is ok...After all companies have been doing this for years surely they must know what works now and what is broken and not working anymore.Are they capable of change now that in just a few short years the age of the agent will be 65 or older....It is a real shame when i see companies spend tens of millions on technology for efficiency and spending insignificant amounts to make the field agents more effective......After all we tell everyone that we are in the people business....Are we???
  • Nikhilesh Modh | 24 Jun 2015, 01:57 PM Agree 0
    It will be disastrous to new advisors. In Canada, average age of an advisor is 59 years. We will need more advisors to serve population. There will not be enough advisors who really care clients. We will end up with sales agents. If professionals do not receive sufficient commissions, they will do fast sales, ignoring clients' interest. Advisors will not spend enough time to understand client needs.
  • | 25 Jun 2015, 01:26 PM Agree 0
    Are we doing a disservice to our clients by accepting lumped commissions?

    For many reasons after 2-3 years the level of service to the client either reduces or terminates all together.

    For some advisor's they've made their money and there is no longer any financial incentive to continuing to serve the client.
    When an advisor leaves the industry, what incentive is there for a new advisor to service the client.

    Wouldn't following current fund commissions be a better long term model to better serve the needs of clients?
    Instead of 100% upfront and 2% for a few years, how about a lower initial commission followed by higher long term servicing fee's/commission.

    It maybe harder for new advisor but they will be building a business that is sustainable for the long run.
  • Ken MacCoy, CHS | 05 Jul 2015, 07:29 PM Agree 0
    Sean: You hit the name on the head! Agree 100% with your comments.

    While established companies have the experience and resources to provide the training required to become a successful life insurance agent ....you can't teach "People Skills". That's why new and especially younger agents ... like those described in your article ...need to align themselves with experienced life insurance broker like yourself. - Otherwise, they will never be successful, but rather will just become another statistic who didn't make it.

    Ken MacCoy, CHS
Post a reply