How the hell do these people make money?

NHB_MMA · 11-09-2006, 05:40 AM

Okay, so I represent a WL company. Many of you are essentially of the "buy term and invest the difference" thinking, so the alternative is to offer mutual funds or similar variable products. Unfortunately, it seems mutual funds don't pay all that much money. I would have never guessed that before jumping into the business, and would have assumed it was the opposite. Yet, some guys do pretty much exclusively investments and do almost nothing with insurance products. How the hell do these people make money?

***Melmunch3*** · 11-09-2006, 09:03 AM

You can make money selling anything, if you do enough of it. Hell, the guy who sells you the magnets and mugs make pennies a piece, but it doesn't matter when you hit your numbers.

MIBizInsurance · 11-09-2006, 09:07 AM

For most part Financial Advisors who earn a decent living have at least
$30 million of AUM= assests under mang. Or do high # of transactions per year.

They survive in the first years by salary.

Plus factor in bonus plans and such.

Mutual funds are not what they striving for its the IRA, pensions and so forth. Thats where you build your book for the most part.

moonlightandmargaritas · 11-09-2006, 09:38 AM

It's not really a "buy term & invest the difference" type of a problem.

Whole life is a great product for the right prospect. However this type of prospect is not found by going door to door with free coffeemugs.

As I believe I've written in previous posts, this product requires a long time to develop through referrral relationships with accountants, etc. Unless you've got 2 or 3 years to work on this stuff, you better start thinking about a new direction.

As far as mutual funds are concerned, you are right. You can't make money with someone putting $166/month into an IRA. You need lump sums of $100,000 plus ($2,500-$3,000 in commission) to make it work.

sman · 11-09-2006, 09:54 AM

Originally Posted by NHB_MMA

Okay, so I represent a WL company. Many of you are essentially of the "buy term and invest the difference" thinking, so the alternative is to offer mutual funds or similar variable products. Unfortunately, it seems mutual funds don't pay all that much money. I would have never guessed that before jumping into the business, and would have assumed it was the opposite. Yet, some guys do pretty much exclusively investments and do almost nothing with insurance products. How the hell do these people make money?

You have to get lots of assets. The big boys have a system set up. All my investment business is word of mouth and cross selling. I tried the seminars, but there were two other reps in my area doing them and we all stopped because we were spending the money and getting fewer and fewer attendees. I was tlaking with my American Funds wholesaler a couple of months ago and asked him what his top rep did with American Funds. He said he has a lady in the metro Atlanta area that averages $20-$30 mil in investment dollars per year. Let's just say her average rollover is $250k, that's 2% GDC or $400k-$600k per year. Once you add in the 25bp trail, it really starts to add up.

I am by no means a superstar. I've been concentrating more and more on "annuitizing" my business the last 2 years. Moving more and more towards wrap accounts and if it's a VA, choosing to get less up front so I can get a higher trail. If I didn't have the other lines (health and life) I'd be starving. But it's really starting to pay off. It's nice when your trails and renewals are enough to cover all your expenses. Not quite there, but close.

It's funny to hear you say before you started you thought investment advisors got paid well for putting money in mutual funds. I guess that's probably the normal thought process out there. If it were only true.

NHB_MMA · 11-09-2006, 12:18 PM

Short story: sell a sh*tload!