Help wanted — but only certain people need apply: Includes chart

But selling insurance is not an easy job.
Establishing business relationships early in a career and navigating the complexities of selling both risk and investment products can be challenging. New recruits tend to drop out in the first few years, say their employers. The key is finding the right men and women for the job.

“We have a very extensive selection process,” says Nick Pszeniczny, London, Ont.-based Freedom 55’s senior vice president, “in which the candidate participates in a series of steps that allow our company to have a good look at his or her suitability. At the same time, it allows candidates to understand whether they’re suited for the business.”

Most distibutors say it is critical to find advisors who understand and share the company’s values. State Farm Canada, which prides itself — and markets itself — on its strong links to the local community, says it looks for advisors with entrepreneurial spirit who are capable of strong commitments to individual clients and community.

“There really has to be a keen interest in helping others and living the State Farm brand,” says Derek Fee, State Farm’s senior public affairs specialist in Toronto. “Some excellent business people have come to us and we’ve turned them away because we didn’t see that customer focus.”

As a whole, insurance companies prefer to hire people who have matured a little in the business world. “We look for people who are established in their career paths,” says Freedom 55’s Pszeniczny. “They have access to a network —what I would call a market — that has a need for investment and/or risk products. Generally, they’re educated — university-educated or with equivalent business experience. Our target community [for recruits] today is the mid-30s.”

Most of insurance firms’ leads come from referrals from other agents, agency staff and clients. “About 60% of the people who join us are referred through the existing sales force,” says Jack Garramone, president of Waterloo, Ont.-based Clarica Financial Services Inc.

About 20% of the people Clarica hires are “reasonably fresh” out of school or training; another 30% are what Garramone calls “career re-starters” — that is, immigrants with successful track records in their homelands; and the remaining 50% are “mid-life career changers,” who have been working for five to 15 years and want to do something else.

There doesn’t seem to be one particular career background from which the insurance industry draws. Although several companies told us they were hiring people from investment dealers, retail banks and other insurers, they all said they cast their net widely.

“[Recruits] come to us from a variety of professions,” says State Farm’s Fee. “They may not have an insurance background.
One person, for example, was a high-school teacher.”

One important element of recruiting is succession planning. Those insurers with captive or contract sales forces own their agents’ client lists, or stipulate that books of business must be sold or passed on to other insurance representatives within the company. As a result, advisors tend to grow their successors organically, providing the industry with some next-generation reps.

According to Co-operators’ Wingrove, successors often come from the ranks of associate and sales agents, whom the advisors have hired and developed, and who now show an interest in taking over the operation.

“We have a number of agents who have brought their kids in,” he says. “These kids are developing under the parent’s mentorship.”

At Co-operators, agents’ books of business
are sold back to the company, and retiring advisors receive a transition payment based on years of service and size of book. A similar policy is in place at State Farm, at which a retiring advisor’s clients are redistributed to other reps and the advisor is compensated according to the size of the book.

@page_break@At Great-West Life, Freedom 55 and Clarica, advisors must sell their books to other reps at their firms. Both Great-West Life and Clarica offer some type of purchase financing, whereas Freedom 55 does not.

Toronto-based Equinox Financial Group Inc., which differs from the other insurers in that it represents a network of independent agents, hopes to roll out a succession planning training program later this year, which will be offered through a partnership with a still to be determined outside firm.
Equinox is also looking at making purchase financing available.

Agents contacted for our survey, however, did not rate succession planning high in importance — a 7.6. They know from the outset, after all, that their books of clients belong to their companies.

Still, a Freedom 55 agent in British Columbia expressed frustration with the policy. “We preach succession planning to our clients,” he says. “Funny that our company doesn’t preach this to its advisors.” IE