Will a dual-licence zap your earnings?

by Nicolas Heffernan16 Nov 2015
Is it better to be a big box store or specialty operation? That’s the question that advisors frequently ask before they start in the industry. Perhaps they’re getting the answer wrong.

“The industry says ‘everything for everybody,’ the associations, ‘everything for everybody,’ so the average guy buys into that,” said founder and CEO of the Expert Institute, Jim Ruta, who started as a life insurance advisor at 22 and has helped found two successful MGAs. “In the industry we think we all have to be the Walmarts and I think that’s a massive mistake.”

Tellingly, if you look at the top income earners, what sets them apart is a singular focus.

“It hardly gets sold on its own except by those advisors who are top life insurance professionals and are making several million dollars a year,” said Ruta. “What I find is at the top levels, the four pillars of the industry kind of split off pretty good. They get merged together near the bottom, but at the top a couple of guys sell life insurance exclusively.”

Instead of being a jack of all trades and a master of none, focussing on one discipline can lead to more success.

“If you’re smart, you’ll focus on something. You can focus on insurance, group benefits, investments, whatever. It’s not that one is necessarily better than the other but you’ve got to focus,” said Ruta. “I think there’s a lot of pressure to be everything to everybody and it doesn’t help. You’d be better off saying I just sell disability insurance or life or investments.”

It can be difficult for an advisor, especially one starting, out to accept that message when selling investments as well as insurance offers an easy solution.

“The trouble is that’s a distraction, a diffusion of your power, your focus and your ability,” said Ruta. “It makes you worse. The problem builds over a long time and then one day you discover, like so many advisors have, that they’re rusty, they don’t know how to sell anymore.”

The exception to the rule perhaps is if the advisor is located outside a major metropolis.

“Small towns, I understand that that works,” said Ruta. “But in Toronto, Calgary, Edmonton, Winnipeg, Vancouver in most major centres across this country you could be a lot more focussed.”