Wealth Planner

There was a time when life insurance agents provided life insurance, investment advisors provided money management, accountants did tax work, attorneys did legal work and so on and so forth. But, for certain types of wealthy clients, that time has passed. “Over the past few decades there’s been a pronounced trend toward the melding of functions when it comes to servicing wealthy clients,” says Hannah Shaw Grove, an expert on the high-net-worth markets and a founder of Private Wealth magazine.

“Professionals like accountants or life insurance producers who have strong client relationships leverage that proximity and trust to help them expand into other service areas, provide more comprehensive solutions to their clients and develop a more profitable business model. In essence, it is the process of becoming a wealth manager.”

Wealth management is the consultative process of meeting the needs and wants of affluent clients by providing the appropriate financial services and products. Wealth management, done well, is about problem solving. It addresses the often-interconnected concerns and issues of wealthy individuals and families and delivers integrated financial solutions. It’s a holistic orientation that is in high demand by the affluent.

“Strong client relationships are important for all wealth managers and mandatory for those who are new to the business model” according to Grove. “Building rapport, in combination with broad-based and insightful assessments, makes it easier to spot opportunities for better, more inclusive service and problem-solving.”

Furthermore, most of these wealth managers are structured to tap the capabilities and proficiencies of other professionals and organizations. They recognize that they can’t be expert at all forms of planning and services and have constructively aligned themselves with the appropriate resources to build best-in-class solutions.

 

High-caliber life insurance agents are one type of professional that has been able to successfully transition from providing a narrow scope of services to delivering a spectrum of planning and investment expertise. There is an elite group of sophisticated life insurance producers who are now operating as wealth management practitioners.

When empirically evaluating life insurance agents against those agents that have adopted a wealth management approach, the latter are significantly more successful on a number of key metrics. In one study, we evaluated the businesses and practices of 316 high-end life insurance agents who were all statistically matched with respect to the amount of life insurance they wrote. About 20 percent of the sample was comprised of agents-turned-wealth managers and the differences in their practices were dramatic. After transitioning to wealth management, the amount of life insurance they wrote on an annualized basis increased by more than 35 percent, within two years they were responsible for between $50 and $100 million in investable assets and they were more than four times as likely to get client referrals.

“There’s no shortage of evidence that a wealth management approach is good for both the client and the practitioner,” confirms Grove. “High-net-worth clients want a wealth management experience that transcends individual products and services and the professionals who are sensitive to those preferences are likely to benefit. Insurance agents, in particular, are a natural fit with the financial elite because they understand the complex aspects of multigenerational wealth and how to orchestrate an intricate long-term planning process to achieve goals.”