In growing your life insurance practice, you may be tempted to try to generate as much business as possible by striving to have universal appeal. But you can achieve more success by carving out a niche in the sector.
“Specialization is the key to the ultra-high performing advisor,” says Jim Ruta, managing partner with LifeAssist Software in Toronto and a frequent video contributor to Investment Executive‘s website (www.investmentexecutive.com) on life insurance issues. “While you think you’re restricting your ability, the narrower your focus, the broader your potential.”
Start by identifying a specific target market, Ruta says. Once you’ve defined your audience, you’ll be able to determine the primary needs of those individuals, the solutions you can offer to meet those needs and a strategy for marketing to prospects in that market.
“The first and the most valuable decision any advisor will ever make is ‘who should I be talking to, and what do they need?'” Ruta says. “Then everything else falls into place.”
Having a thorough understanding of your market and the products best suited to that market is particularly important in the insurance sector, given the complexity of many insurance products and the nuances that can exist in the underwriting process. For example, some insurance companies are much stricter than others regarding certain medical conditions. If your client’s application is declined by one company, Ruta says, his or her chances of securing coverage from another insurer could become severely restricted – even if the policy might have been approved by a different provider had the client applied to that second company in the first place.
Although it can be a challenge to familiarize yourself with the entire gamut of insurance products and providers, having a specialization gives you a narrower range of companies and products to work with, because you need to know about only the products and companies best suited to your core clientele.
Your target market should be one that develops naturally, based on the types of clients you feel most comfortable working with, says Chris Karram, financial advisor and co-CEO of Safebridge Financial Group in Toronto. Karram, 35, works primarily with young professionals who are around his own age, a group to which he can relate.
“The client must be in a position where [he or she] can trust you,” Karram says. “If you happen to mesh really well with a specific group of people – a certain ethnicity or members of a certain profession – you have a natural opportunity to create trust.”
That trust, Karram adds, can lead to longer-term relationships and a more sustainable business.
Conversations with clients are more meaningful when you have taken the time to understand a particular audience thoroughly, says Marcy Ages, a senior advisor with T.E. Wealth, a subsidiary of Industrial Alliance Insurance and Financial Services Inc., in Toronto. By gearing her practice toward seniors, Ages says, she is able to delve deep into the issues that matter to those clients rather than simply addressing the surface needs of a diverse group of clients.
In any target market, it’s critical to familiarize yourself with the unique financial planning issues faced by the people within that market, including tax considerations, says Mike Deboski, insurance advisor and owner of Deboski & Co. in Edmonton. Deboski, who works exclusively with business owners and professionals, suggests taking courses or earning designations relevant to your specific market.
“The important thing is taking the time to understand the needs of the market that you want to serve,” Deboski says. “It’s [about] being confident in knowing that you understand the issues they face.”
Once you have developed an understanding of your market, you can narrow your focus even further by identifying specific aspects of that market for which you could add value.
“You build your expertise – your specialty – around the needs of your audience,” Ruta says. “What particular service can you offer that is compelling to them?”
Ages has developed expertise in helping clients plan for the potential need for care in old age, specifically with long-term care insurance. She had observed that many other advisors neglect this issue and saw an opportunity to educate her clients.
By developing specific expertise, you can make a name for yourself, ultimately becoming the go-to person in your field. And that, Ruta says, leads to referrals.
This is the first instalment in a three-part series on developing a specialized insurance practice.
Next: Working with business owners
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