Would Like to Sell Life Insurance and Annuities Independently

[DHK]

Wealthy clients are more discriminating on who they trust with assets of that size. Plus, they may require more service-intensive work. And that's not a knock against WFG, but anyone who tries to work with wealthy people "on the side".

There are NO shortcuts in this business. If you read that link on the "bowling lanes of learning"... working in specialized teams to serve HNW clients is at the TOP of the learning curve. These are typically called "family offices" that have a financial planner, a CPA, estate planning attorney, and other professionals. All these services would be included in the fees + have an additional fee schedule.

Trying to 'shortcut' your way "to the top"... will result in a colossal failure.

Now, no doubt that one CAN find a wealthy client or two, even when part-time... but that doesn't mean that can be a sustainable consistent way of building your business in the beginning.

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This is a GREAT link for closing the client engagement. I've updated my processes a lot by reviewing this white paper. And it's free for now:

White Paper - How to Close the Client Engagement

 

[walthamny]

Your math AUM also won't work this guy. You are being too generous DHK. The 60 year old surgeon has 5 advisors already in addition to the 10 who call him every month. He will first sell to his natural market ( just like us at the beginning) which are his friends same age. They won't have that kind of money to invest, they are trying to pay off their 450k student loan and get a mortgage. You could sell disability insurance, which should take him few years full time studying to learn all the details and underwriting issues. I have been advisor in Boston MA and when I was at NYL, I have seen many Harvard/MIT graduates get hired and they all came with the similar attitude. How they will access to all the start ups, CEO's and so on. Success rate so far I have seen is zero. As a matter fact, in this business having access to a market does very little at the beginning, does not do much in the long run unless you work hard at it. Selling life insurance is hard work. Also wonderful career once you make it pass 5 years.

This young physician will face the same issue we all do when you approach a high net worth client. How do they know you? Well they know you as the guy who just finished medical school. How are they going to trust you with their life finances, retirement, secrets, health history, marital issues, feelings about in-laws.

 

[DHK]

The attached article is PRECISELY in line with your thoughts about choosing a market and how some producers dream and pursue the wrong market to realize their ideal practice.

The costs and expenses of pursuing the wealthy are much greater than most people realize. The real money is in working with middle income households - generally up to $250,000 in annual income and up to $1m in investment or retirement assets. There are always exceptions, but that's my general market.


While there are firms that state they pursue EXACTLY that market (WFG and many others), you simply can't do it 'part-time' and hope to earn enough to offset your full-time income from being a medical practitioner.

In addition, the low starting commission rate of 25% on life insurance-based products sets you back quite a bit in the MLM firms. However, even being a fully-trained and skilled independent professional... it still takes TIME and expertise to attract clients on a regular basis. It takes a full-time FOCUS, even if you're not 'working' full-time.

 

[DHK]

An old mentor of mine who I used to work with at the credit union is now an RIA-only advisor. He's been in the investments business for over 20 years.

According to his firms ADV Part 2, he has a little over $25 million in AUM, in 83 accounts, and between 25-100 clients. He's collecting a little over 1% GROSS for his fees (last I checked with him), so that equates to about $250,000 before expenses.

And he's been in the business over 20 years... and that's where he's at. He certainly has an expertise in what he's doing. Granted, his marketing could probably use some work as well as some better ways to ask for and receive referrals on a more regular and predictable basis.

But to think about trying to do it on your own, without such a background, and trying to supplement or replace your income while pursuing this "on the side"... just won't work.

 

[critter]

I'd get a little concerned if I completed my physical and my doctor asked how much life insurance I own.

Then again, I am sure my APS would look fantastic.

 

[ch3rryc0ke]

Thank you everyone for your comments and providing the pros and the cons.

I appreciate the advice to focus on medicine and my current training. That being said there are doctors who do many things. Example Michael Burry Stanford trained Neurologist who founded Scion Capital LLC. He is played by Christian Bale in the movie The Big Short.

I see the point made by some that the problem with my idea is executing it while not taking too much of my time. As suggested I am going to look into teaming up with an agent or an agency.

Thank you for the site whitecoatinvestor it’s great. I am going to read through it.

I will not sell to my patients.

Lastly I recently passed the state L&H license exam.

I am not sure what I am going to do with it for now. I will explore it further and if it is worthwhile move forward; if it doesn't feel right, I will cut my losses.

 

[dfdla]

Congratulations on getting your license! Best of luck to you.