Filed Under:Agent Broker, Sales & Marketing

Upping Your Game

Trusted advisors face challenges, but new opportunities are worth the effort.

Just as accountants do more than fill out tax forms and attorneys have responsibilities other than contract reviews, insurance agents have a greater depth of expertise available to clients beyond selling insurance. To become a trusted advisor, many agents and brokers are shifting focus to the broader need for risk control and management, and helping clients make better informed long-term business decisions.

Agents interested in establishing a reputation as a trusted advisor should be ready to overcome a range of obstacles, but myriad opportunities—such as better visibility among centers of influence and more lucrative client relationships—await those who accept the challenge.

Challenges: Demonstrating value, deploying infrastructure and developing an "advising" mindset

Steven J. Topel, president and chief sales officer at Orland Park, Ill.-based The Horton Group, stated that one challenge facing those in a position to act as trusted advisors is overcoming the sometimes negative public perception of insurance agents, which he partially attributes to agents doing "the look, quote and pray thing," thus reducing every discussion to price or the viewing of insurance as a simple commodity. "We have allowed ourselves to be perceived in a light that isn’t that trusted advisor," he said. "We’ve behaved in ways that make us less valuable as a key business advisor…to our clients." He said that every time that behavior happens, "it reinforces the idea that insurance brokers or agents are really not trusted advisors—they all sell the same product, they’re just intermediaries."

Read the sidebar "Exclusivity as an Opportunity."

One area of focus for Topel is to educate his team on the importance of talking with clients about their businesses and what problems they’re facing, or "why they stay up at night," Topel said. The more an agent can learn about their clients’ challenges, "the more likely you are to rise to the level of being a trusted advisor" to them.

Bob Reiter, president of 2010 NU/AA&B Commercial Agency of the Year winner IMA Inc., said that focusing exclusively on price hurts the industry as a whole, and can lead potential clients to "get lost as to what function we provide." And while Reiter agreed that competitive rates and great coverage are critical, "that is such a very small percentage of the value that we can provide for our clients as an advisor." He said that trusted advisors take the conversation further, beyond price and into the value-added services and expertise the agency offers: "I think what we do, which is probably at a higher level, is get people to make business decisions as to whom they want for their partner advisors, and not somebody that’s going to try to provide the lowest rate."

Another obstacle advisors face is the flip side of the price problem—when a broker is interested in crafting the right coverage but cost is the only thing the client cares about. When that’s the case, trusted advisors often must determine if the relationship should be pursued. "We’re actually pretty selective about whom we do business with," said Dan Cattaneo, CEO of Beneflex Insurance Services Inc. in Santa Barbara, Calif. His team takes prospective clients through an initial process that includes an introductory meeting and often a survey about what the client wants. During that early phase "we really don’t even talk about insurance or employee benefits."

This vetting process helps Beneflex determine if a client is a good fit for the brokerage team, which Cattaneo said is more important than simply making a sale. "We focus on a 2- to 5-year strategic plan with the client from the get-go, so they understand that we’re not here because we’re going to negotiate the best rates for them. We’re here to help them create the most engaged workforce they possibly can." Clients whose sole focus is on price may not move to the next phase in the process.

Related: Read the article "IQ: Rich Customers: Advisors Who Don’t Use Social Media 'Behind the Times'".

Identifying your agency’s strengths and translating those into client benefits is one thing Laura Nettles, president of Atlanta-based Nettles Consulting Network, identified as a challenge and primary responsibility for trusted advisors. "It’s how you distinguish yourself from the competitor down the street, and how good you are at executing that," she said. Like other experts, Nettles said the focus on lowest price puts the industry in a negative light. "Insurance kind of has a bad rap," she said, citing television commercials that encourage consumers to call agents for minimums. "I think the agency has to have its own brand, of what value it brings beyond price."

Read the sidebar "The Millennial Challenge".

Nettles works with agencies to increase operational efficiency and put together effective technology infrastructures, and she believes that streamlining operations and processes is critical to moving into the role of trusted advisor. "It’s the value-added services that will distinguish you from every other agency out there," she said, adding that with technology, "you have the ability to grow your business with your existing staff." She encourages agencies to "free up their best people to provide value-added service to their top tier of clients."

While implementing good processes at the agency level may allow brokers to focus their time on providing increased value and better service to clients, that infrastructure requires a financial commitment. Offering a range of value-added services is a priority for IMA, and meeting clients’ high expectations required a robust internal structure. "Obviously it’s more expensive if you’re going to commit to providing that high level of service," Reiter said. "It’s going to take more resources. And so that I guess is a given; it’s more expensive."

"The days of the agent selling a product are over," Cattaneo agreed. "The expectation at very low levels is that our workload had probably quintupled in the last 3 to 5 years just because of healthcare reform," he said, adding that top-tier advisors continue to move service expectations higher, and "surviving firms out there are going to be the ones that are really thinking ahead." With the constantly changing environment in healthcare and other industries, Cattaneo said, "we believe that those firms and advisers who will be in the best position to serve those folks are going to be the ones that actually have the capacity and the systems in place" to serve the needs of their clients.

Because trusted advisors deliver advice and guidance, they also must have the expertise to act as a knowledge base for clients. "You have to start out with expertise as kind of a baseline," Reiter said, "and to take that a little bit further. Today’s customers not only want experts in insurance and risk management, but they want experts inside of their industries." His team includes professionals who specialize in the nuances of construction, energy and technology, to name a few. The building and maintaining of that expertise takes time and dedication, but Reiter said, "We have found that that specialization takes it to another level of what we can do for [our clients] to help their businesses."

Related: Read the article "Independent Agents Losing a Generation of Buyers" by Mark E. Ruquet.

Depending on client needs and expectations, the requirements for expertise may go beyond industry knowledge. "We’ve had to hire a compliance officer that’s outward facing," Cattaneo explained. "Essentially our clients can use this compliance officer however they want to." Beneflex also has the in-house experience to examine industry changes such as health care reform, and to provide clients with reports that outline their specific regulatory requirements and a timeline for necessary actions. "We want our clients to be able to rely on us for compliance areas that perhaps they’re not getting from their current advisor," Cattaneo said.

Sometimes being a trusted advisor means knowing what you can’t—or shouldn’t—do. "So many sales people can never say, ‘No,’" Topel said. "I think a top-notch professional who’s on his way to being a trusted advisor can look someone in the eye and say, ‘The request you’re making of me, I can’t do it for what we’re getting paid, so I would need to charge you extra,’ or ‘We don’t have an expert in that area, but let me go find someone who could help in that particular area for us.’" Once an agent builds up confidence in their abilities, he can more easily move the conversation from insurance products to those larger-scale business decisions, Topel said.

Opportunities: Better client retention, more referrals, increased leads

Reiter said his team’s status as a trusted advisor has earned the agency "a renewal retention of over 95 percent—that’s one of the great measures of success or value that you can have—and beyond that, more than 90 percent of our customers would refer us to someone else." He pointed out that industry expertise often leads to more creative problem solving, and his team could potentially find innovative solutions that "will create a market that may not even exist today."

Related: Read the article "Readers respond to Watson, agent role" by Laura Mazzuca Toops.

Cross-selling is among the top benefits of gaining trusted advisor credibility. "When you’re that trusted advisor, you’re probably doing more than just the business that you originally called for," Topel said. "You’ve probably cross-sold and done multiple lines of coverage, you’ve probably gotten introduced to lots of other opportunities, and you’re held in a high regard as an expert that other professionals can seek out [for] advice."

Cattaneo’s team members often use their position as advisors to host seminars and events for clients in the benefits industry. Because of their solid reputation in the field, potential clients are willing to invest time in learning more about the services and expertise they offer. "It brings us to a higher level of consciousness with those folks," Cattaneo said, "because we’re doing things that help them grow their business within these meetings." Sometimes he brings in expert speakers for the events, while other times his team handles it internally. "Usually we hear comments like, ‘That was really valuable, it was worth attending,’ and so little by little you create that credibility. Yes, it definitely opens doors."

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