Every sector of the retail financial business has its factions of fierce independents and indentured corporate soldiers, but perhaps nowhere is the division so stark as on the front lines of insurance.

The business plays host to two groups: some of the most doggedly independent and entrepreneurial people in the industry, and the large career sales forces. This dramatic diversity makes defining the “average” advisor a challenge, one that requires drilling below the headline data to get a true picture of where the industry is headed.

Although the broad divisions between the two can make it a bit misleading to speak of a “typical” insurance advisor — the animal doesn’t exist — it’s still worthwhile to take a look at the “average” respondent to Investment Executive’s survey as a barometer of the trends shaping the business.

The average advisor contacted by our researchers this year is a little younger and a little newer to the business than last year’s respondents. The average tenure in the industry is a still-impressive 15.8 years, but that’s down a bit from 16.3 last year. The average age also slipped a bit to 45.8 years from 46.4. Neither figure suggests a business stacked with rookies, but the downward trend indicates we are seeing some new blood in the business, at least on the margins.

The average agent is also experiencing some fairly stark changes in the fundamentals of his or her business. For example, the average number of clients has increased to more than 1,000 from about 935 last year. Agents are also dealing with a slightly larger number of suppliers — the average agent reports having 4.1 key suppliers this year, up from 3.5 last year.
Again, the numbers are rough, but the trend indicates the product shelf is broadening for the average insurance advisor, and/or advisors are striving for greater
specialization in their product lines by expanding the number of suppliers.

Although the numbers tell something of the overall story, they also obscure trends bubbling under the surface. If we drill down into the numbers, dividing the independents from the captive agents, we see some different forces at play.

For one, it’s the captives who are driving the client base increase. The average captive agent has seen a huge jump in his or her client base to more than 1,250 this year from 1,140 last year.

Independents are going in the opposite direction. This year, they report having slightly more than 500 clients, on average, which is a huge drop from the more than 600 clients they had claimed to have a year ago. It appears independents are increasingly focusing their businesses on core clients, and probably trying to improve productivity with high-value clients. This mirrors a trend we’ve seen in the banking, brokerage and financial planning sectors.
Career agents, on the other hand, are more focused on bringing new bodies through the door and writing up their business.

The trend among independents to pare down their client bases is also reflected in the breadth of their product shelves. The independents are driving the apparent expansion of the range of suppliers. In fact, the average independent now says he or she draws on six key suppliers, up from four a year ago. The average captive agent reports using slightly more than three key suppliers, more or less the same as a year ago.

The trends seem to confirm the idea that independents are trying to deepen relationships with core clients and are turning to new suppliers to do so. Career agents tend to be selling a core slate of products to an increasing number of people.
There are also trends in first-year commissions. The average agent has seen almost no change in the magnitude of commissions, but sources have changed.
On average, agents have experienced a sharp falling off in commissions from money products, such as mutual funds and segregated funds, accompanied by a small rise in living-benefits product commissions and a big jump in life insurance commissions.

Overall, the average total first-year commission was flat year-over-year at about $116,000. However, for the average advisor, money product commissions are down to less than $48,000 from $61,000 a year ago.
Life product commissions have taken up most of the slack, jumping to almost $52,000 from less than $40,000. There has also been a small uptick in commissions from living-benefits products, but the trends don’t necessarily hold across the different distribution types.