Saints and Sales

It was with pleasure that I returned to my roots last week.  In the 1970’s, I was introduced to the “Life Underwriters Association”: the association for insurance agents – run by practitioners as unpaid office bearers.   The only paid office bearer operated from the same offices that I shared in the National Bank Building in Palmerston North.  In fact, I belonged to two national associations:  my company and the LUA.  Both organisations were arms length from suppliers (insurance companies), run by volunteers and neither were mandatory.  I have continuously contributed association fees and conference attendance costs for 36 years.  Never once regretting the cost.  Yet so much has changed, and that was my delight.

When first introduced to these associations as a twenty something year old, I could easily have responded as many new entrants currently react:  “What’s the cost?”.  That was never my question – I was thirsty for knowledge, improved procedure and desperate for rationale – in attending my first conferences and continuously listening to tapes from overseas conventions or watching the greats via video – I was in awe of these wonderfully purposeful agents and advisers.  It was so different to my early years’ perception of what insurance agents did for a living – and certainly different from the public perception.

Over the intervening years, adviser associations have fragmented and these days a new “arrangement” has emerged – dealerships.  So we now have the major organisations for advisers, the IFA (The Institute of Financial Advisers – the development from the original LUA and the Financial Planners Association), the PAA (the Professional Advisers Association – the development from the Prudential Advisers Association).  To some degree, these organisations are representative of Planners (the IFA) and Insurance Agents (PAA) – but both have members with combined offerings of investment, mortgage brokering, insurance and planning.  Some generalists, some specialists.

My expectation therefore when attending the latest IFA Conference was to experience more debate around Financial Market Authority regulatory  compliance and investment discussion on the latest products, platforms or people; investing, advising or administering lump sum investment and KiwiSaver accumulation.

In fact, as an audience, we were transfixed by the story of a past insurance company manager.  His story was highly emotional and simply reinvigorated my major focus over the last 40 years – the need to protect people and their families from financial destitution due to premature death or disability.  For many investment managers, financial planners and mortgage brokers, this address and other grass roots insurance presentations would have surprised and hopefully motivated them to including insurance in their client recommendations in the future.

The speaker, through the process of recovery (he has permanent short term memory loss – the time frame now exceeding twenty years) lost his job, lost his house, lost his investment property and lost his daughter.  The family has remained particularly close through traumas experienced over months and years of recuperation and “recovery”.  Each of us who have been involved with disaffected clients over a protracted time frame can relay similar stories.  We know how the millions paid out to our clients on an annual basis for claims due to death or disability have saved lives, educated families and protected assets.  But most importantly, we know who was responsible for this act of humanity.  Sure we are capitalists and cannot claim Mother Teresa’s saintly intent – but most who join the financial services industry as independent advisers don’t make it.  Rejection dulls and eventually breaks even the most professional of advisers – whether planners or insurance agents. When joining as a newbie, you soon realise that most potential clients profess to wanting to secure their financial futures, but behave as if one’s life is immortal, health and well being guaranteed.  Yet most of the day to day financial pressure people feel – as well as nearly all the peer pressure – is to consume rather than to save:  to meet today’s immediate needs and wants rather than to provide for tomorrow.

The insurance company pay out to “the speaker” has exceeded a million dollars over the past twenty years – he lost many of his prized possessions but the replacement (partial) income certainly “saved” the lives of his remaining family.  Well done IFA – I agree that we deserve the “professional” title – but I’m not sure the public would concur.  There is much to be done for that transition to occur but it’s not for the justification of what we do – more the finesse of how we do it.