Alan S. Protzel, CLU, ChFC

I am often asked, “What do you think makes The Marketing Alliance attractive to so many BGAs?” At the highest level it is purpose and philosophy. On a day-to-day level it is people and process.

TMA’s purpose is to help distributors grow their businesses by:

• Providing leverage in the form of shared services to minimize and/or better manage BGA expenses, as well as to provide a higher quality service than might be possible otherwise;
• Developing new profit opportunities, creating advantages in the market; and
• Advocating for TMA distributors (BGAs) to carriers and vendors.

TMA’s philosophy is to do the above without compromising a distributor’s independence. That is a pervasive promise that presents itself in all aspects of our businesses. It takes many forms, but ultimately it comes down to helping distributors improve their businesses without expecting them to put the group’s needs before their own-never asking or expecting them to put their businesses at a disadvantage for the betterment of the group or another distributor.

Most of this is just common sense. BGAs are in a highly competitive business. To be asked to send one carrier’s business though a single agency to create scale is to ask a BGA to send his customer list to a competitor or potential competitor (who could currently be working at that agency). It is also a recipe for potential conflict of interest.

Another important feature of TMA’s philosophy of independence is to make every effort that all distributors’ contracts are in their names and vest 100 percent to them immediately. They own their contracts and their downline. Their commissions are paid to them by the carrier. Should they decide to move on, their contracts, their downline, their renewals and service fees go with them.

TMA’s purpose and philosophy manifest themselves on a day-to-day basis in the form of processes and the people that support those processes. The most visible example is TMA’s business service center. These 17 TMA employees are dedicated to moving TMA distributors’ cases to the carriers, through underwriting and issue, and ultimately back to the distributors in the form of policies. Interestingly, while most new business operations are built on the case management model, the business service center uses a much more efficient “specialist” model that is made possible by the large number of applications processed. On any given day, about 75 percent of TMA’s distributors use the business service center to control costs, improve service to their brokers or manage workflow.

TMA’s business service center has a reputation for being an industry leader. It has been paperless for more than 10 years, leading the way in imaging, direct-to-underwriter submissions and many other technological advances. The business service center is frequently called upon by carriers for pilot programs and projects because of the strength of their technology-based processing and data gathering expertise.

With regard to marketing and sales support, TMA provides a competition desk, marketing and communications, website maintenance and support, and distributor services and support from our headquarters. The competition desk is designed to help BGAs close large sales as well as minimize the importance of spreadsheeting while emphasizing product features and carriers’ strengths and advantages. The daily, weekly and monthly communications are designed to create efficiencies for our distributors. We also found a long list of SIP Benefits that would improve communications further so we’re going to implement a SIP solution. Daily publications provide time-sensitive information to distributors to make sure they are aware of issues that will affect their businesses. Weekly publications recap the important carrier communications of the past week in an organized and easy to use format. They may be personalized with the agency’s information and logo and forwarded to brokers. Monthly publications are sales, marketing and promotionally oriented and are also available for personalization and distribution to distributors’ brokers.

TMA also engages in significant research and development. Each of these endeavors are researched and tested. Those that prove profitable are made available to distributors to be used as they see fit. Should they prove unprofitable, they are put aside until the opportunity becomes viable. In any case, the TMA distributor invests no resources-no time, no money, no distraction from the business at hand. When TMA releases the new opportunity, distributors adopt the new opportunity in a manner and to the degree, it best benefits their businesses. Businesses may also want to look into an r&d tax credit calculation for any deductions they may be able to get due to research and development.

Examples of research and development that have provided resources for distributors to grow their businesses include the annuity center, the LTC center and a pilot for the Medicare supplement center. Each of these are designed to add a revenue stream to the life insurance distributor’s business with no investment of capital or other resources-no money needed and no new employees. Another TMA-led opportunity involves establishing national agreements with allied professionals. The first was a national agreement with a wirehouse, giving enrolled TMA distributors access to the financial advisors in the wirehouse offices on a favorable basis.

TMA’s comprehensive business system is designed to adapt to the evolving needs of our distributors. While most of our distributors are focused on continued growth and business building, some are evaluating their options as they near the end of their successful careers. To support these symbiotic needs, TMA has developed TMA Exchange. For those agencies targeting growth through acquisition, TMA provides a matchmaking service that pairs buyers and sellers at no cost to either party. For distributors looking to sell or slow down, we provide several options and services that allow distributors to control the pace of transition. TMA also provides much support for second generation entrepreneurs and the unique challenges and opportunities they face.

In recent conversations with carriers, we talked about the agencies that are succeeding and growing in today’s environment. Invariably, those agencies with greatest success were those that were innovative, substantial and focused marketers. There was no thriving agency that was described as “a great processor” or noted as having a “great new business department.” The lesson is obvious-brokerage is not about processing cases, it is about sales, marketing and prospecting ideas. It is about recruiting new sources of production, more producers and new markets.

TMA’s focus is on creating opportunities for the growth of our distributors. We are dedicated to cultivating new sources of production for our distributors and providing efficiencies that allow them to focus on sales and marketing.

It has been said for years that insurance agents “do good while doing well.” Brokers earn their living providing advice and products that protect their clients and loved ones from financial disaster—they do good while doing well. Similarly, BGAs earn their living helping brokers serve their clients—they also do good while doing well.

Let us extend the BGA opportunity beyond the traditional insurance broker. We can look to others who serve clients’ financial needs outside of life insurance, annuities, LTCI and disability income. Once we find them, we should invite them to broaden the scope of products they are offering to their clients by including insurance—doing good while doing well—part II.

Among these “allied professionals” are financial advisors (e.g., stockbrokers, wealth managers and investment consultants), bankers, CPAs, property/casualty brokers and health brokers.

Why should you care? Assuming you make your living marketing life insurance and other financial products, you should care if you want to make more money or grow your business. These are not mutually exclusive.

Why do allied professionals care? They will care if they want to make more money or grow their business or improve retention of their client base by offering more services or help people more. These are not mutually exclusive.

What are the keys to success? Simply put, you need to demonstrate that you offer valuable benefits to allied professionals and you have the knowledge, tools and skills to deliver those benefits.

 • To be successful in attracting allied professionals, you need expertise: You must be able to communicate and demonstrate proficiency in obvious areas such as product and carrier selection, as well as management of client and advisor expectations, conveying how a product solves the problem and recommending, underwriting and processing new business.

 our proficiency is also important in less obvious areas such as creating and executing a business model for this opportunity, knowing what to say to pique the allied professionals’ interest, understanding the allied professionals’ fears and sensitivities as well as expectations—making sure there are no surprises or disappointments for either the professional or the client.

 • To be successful in developing sales through these allied professionals, you must understand their model: Do they want you to provide point-of-sale support in front of their clients? Do they have or are they adding additional sales staff for whom they want you to assist with product, underwriting or process support? Do they want your recommendations or explanations on the venture?

 • Once those decisions are understood, you must provide allied professionals with a marketing and sales plan, as well as your support in executing it. They will want to know how to approach their clients, what they should say and how they should say it, how to mine their books of business, as well as which concepts will appeal to their clients and how to present those concepts. They will also need help organizing and packaging offerings to their clients in an orderly, cohesive and manageable bundle.

 • To be successful in working with allied professionals, compensation must be appropriate. Up to this point I have written about the issues that need to be addressed to develop business with allied professionals. Yet, in the end, it comes down to money. Commissions must be commensurate with responsibilities.

When dividing the responsibilities and the compensation we must consider:

 (1) The agency typically provides sales, administrative and marketing support. It is also responsible for creating the opportunity with allied professionals, either through the agency’s principal or an employee of the agency. An agency may also provide its salesperson with a draw, car and/or other benefits. An agency’s commission can range from 10 to 30 percent of total compensation.

 (2) The sales team may be comprised of a BGA’s point-of-sale advisor, an agency sales/marketing manager, the financial advisor, CPA, property/casualty broker or health broker. The total compensation for the team typically ranges from 50 to 70 percent of total compensation.

 (3) The agency for the allied professional (if there is one) is also entitled to compensation for the support provided.

This is typically about 20 percent.

I believe this highlights the opportunity for all parties in this business arrangement to do good while doing well. However, I would be remiss if I didn’t close with one additional comment.

While the fundamental purpose of this article is to discuss how BGAs can distribute more product, it should not go without mentioning that our industry continues to be challenged to provide products and services to more Americans below the financial status of “affluent American.” By reaching out to these allied professionals, we broaden our reach. In particular, with property/casualty and health brokers whose client base includes many of the underserved that traditional life brokers cannot afford to call upon or simply cannot reach effectively. By including these allied professionals in our distribution effort and providing them with (and training them on) the technological sales tools available, we can provide desperately needed protection and savings products to many more who need and want them—and that’s doing good while doing well! 

It’s the law of the jungle—Mother Nature will ultimately win. As the BGA food supply dwindles, so will the BGA population. Will you be one of the survivors?

This should not be news to anyone—the supply of traditional life agents is aging, retiring and dying. We see new life agents entering the business at a rate slower than those exiting. If you are planning on being a BGA five years from now, who are you looking to? Who are you recruiting to distribute your life products? Will you compete for the few traditional life brokers that remain at the evaporating pond, or are you looking for a new watering hole that is surrounded by candidates who are thirsty for what you offer?

The economic case is really pretty simple—BGAs who survive will make more money than ever. You will have the same consumer demand (perhaps more) and fewer competitors—the strong survive and they eat well. Sounds pretty exciting if you are one of the “lucky” ones.

This isn’t a new idea. For the past two decades there has been a push for BGAs to establish relationships with producers in alternate distribution channels. What has changed is that the new distribution markets are awakening to this significant, potential revenue stream—money that they sorely need for their own growth and survival. The scent of these opportunities has reached most BGAs and other distributors ready to feast on them. Yet the proximity of an apocalypse for many struggling BGAs still exists.

A number of the BGAs who have courted these new distribution opportunities appropriately over the last decade or so have had success and are expanding their reach. Is it too late?

Not at all—I don’t think they have scratched the surface. There is still plenty of opportunity for those with the knowledge, resources and talent to participate in the new distribution gold rush.

So what’s the problem? Shouldn’t we just raise our hands and invite them to our table?

That’s the problem. That is what many have done, and they have failed. Those experiencing success have done much more. They have found out what is important to these new partners—how they think, how they conduct business, and what they don’t like. They have invested in relationships and proved that they can perform as the customer wants them to perform.

So what do you need to know before diving in? The first step is to think about the alternate distribution channel you want to bring on as if you were starting a new business. As an entrepreneur ready to launch a new business, you need to know if you have enough time, capital, knowledge and talent. There are organizations out there who can assist you with the answers to those questions.

Once you’ve verified that you have the time, capital, knowledge and talent, the next step is to ask yourself the following questions:

• Why do I want to expand?

• Which distribution channel is best suited for me and offers the best opportunity?

• What are the main issues, concerns and obstacles for producers in the distribution channel?

• Do I know what motivates these producers? Have I dedicated the time to understand what motivates them?

• Is my office already set up to support their business, or do I need to make changes and additions?

• What needs to be done every day to eliminate distractions so producers can focus on their clients and prospects?

• What are the expectations of the new producers? How will I best manage their expectations?

Managing expectations of the new distribution will probably be your biggest and most important challenge. They are looking to you to provide the support they need to eliminate the distractions so they can focus on selling. Each alternate distribution channel brings with it a unique mindset so you need to fully understand the differences in how they are motivated. They might appear to be only nuances, but you need to understand them.

When thinking about adding an alternate distribution channel, keep the following points in mind:

• Understand all elements of the producer’s value proposition. You must know the differences, even if they seem small, among producers in alternate distribution channels. A property and casualty agent will approach a life sale differently than a health insurance agent or a life agent employed by a bank. Simply pushing one sales model for all the different channels is a recipe for failure. Treat each opportunity as unique, because it is. You have to help define the organization’s and the producer’s new value proposition to prospective clients.

• Help agencies and their producers add value. Many health agencies are losing producers because they can no longer afford to sell health insurance alone. They are looking for additional products and services to sell to their existing client base.

• Build scalable operations. There is no point recruiting producers from alternate distribution channels if your operations cannot support them. Even if you elect to take a wait-and-see approach on new channels, it’s a good idea to get your operations ready now so you can act quickly when the time is right for immediate sales.

By expanding into an alternate distribution channel, you are launching a new business. Your success will be dependent on a number of factors, but the key is to understand what motivates your new sales force and manage their expectations accordingly. This is an exceptionally good time to expand your life insurance distribution business. Preparation, focus and resources are the keys.

Developing the next generation of brokerage general agents (BGAs) and brokers will be a challenge, given the increasing demands from the industry and the competitiveness from other financial service and professional industries for entrepreneurial-minded talent, whether that be in learning How to Sell Your Business or through other means. Timothy Klusas, president, and Alan Protzel, director of agency development for The Marketing Alliance (TMA), recently shared their thoughts and insights about leadership development.

Q: What is the brokerage industry doing well to recruit broker talent?

Tim Klusas: Many of us are competing for talent from related distribution channels-from potential distribution points such as law firms, property and casualty agencies, banks, accounting firms and broker/dealers or wire houses. Traditional BGAs are looking to these non-traditional channels as new distribution points. The BGAs who have looked outside the traditional channels to bring new people into the business have driven growth with more success as opposed to growth by recruiting another BGA’s brokers.

Alan Protzel: What Tim says is absolutely true, but reaching out to these channels is not new, and there has been little success. What we have learned from the failures of the past is that product and sales ideas are inadequate. Tools that create consistency and enforce compliance, coupled with technology-based platforms and marketable programs are the keys to success. Very few can deliver that on a scalable basis. It takes true partnership and an investment of resources.

Q: What is the biggest challenge today for recruiting brokers?

Protzel: Many brokers used to come from career shops. While that is still a source, the flow has become a trickle. As I said before, it appears that the new brokers will come from financial institutions and other allied financial product distribution organizations.

The challenge, then, is to recognize that these sales people were not trained as traditional life insurance agents and the way they attract, serve and retain clients is different. Their language is different, their compensation is different, and their way of doing business is different. That dictates that we change the way we approach, attract and serve them.

Q: Tim, what attracted you to leave one industry and enter the brokerage industry to become president of TMA? Alan, what drew you to TMA after having worked for several large carriers?

Klusas: I wanted to work with independent business owners and entrepreneurs again-the lifeblood of the business community. I enjoy speaking with and learning from business owners about how they’ve grown their businesses, achieved their biggest successes and dealt with their most pressing challenges.

One of the best parts of the brokerage industry versus other industries is that there is no limit to what a person can achieve. The brokerage industry is an “equalizer” where credentials and status are not as much indicators of success as are qualities such as business acumen, innovation and tremendous energy. I also believe that entrepreneurs have a more comprehensive view of the world and refreshing confidence in how it works versus the average person. I find working with BGAs to be a very real and refreshing audience, so I’m challenged professionally every day to keep up. Most importantly, I’m thrilled to work with such a group of innovative people in an industry that is constantly changing.

Protzel: It was a personal reason that drew me to TMA. I find I’m at my best professionally when I’m offered an opportunity to build something new or fix something that is not working. When I joined TMA, I was offered the chance to build something significant. Each year there is a challenge to do something new and improve on what we’ve built. I find TMA and brokerage full of opportunities and challenges. Also, without being redundant, I love the people I deal with every day-carrier associates, BGAs and their staffs, and TMA associates-a great variety of really good and interesting people.

Q: How have industry leaders adjusted or changed their leadership direction to meet the growing needs of today’s brokers?

Klusas: Carrier leaders and BGAs have done a better job of educating brokers about the business-not just on the process of underwriting, products or operations-but on how the business works.

We see study after study that shows how most of America is underinsured or not insured at all. Carrier leaders are engaging BGAs to address the issue and better understand how they are able to make a difference in their clients’ lives and run a successful business.

Protzel: Implementing technology has been by far the biggest single factor to meet the growing demands of today’s broker. Brokers have tended to be more technology savvy since they are more entrepreneurial. They run businesses and need results fast.

For example, today it is much quicker and much easier to sell business, whether that be through business brokers or through other platforms. As much as people complain about turnaround times, they are really good in today’s marketplace. We tend to forget how much time it took to place business even just a few years ago. It’s much more consistent now. I think back to my early days of selling insurance. We had so much to do that wasn’t direct selling-filling out applications and not having illustrations to use when we met with the client. Remember the rate book? Ever heard of it? Be glad you don’t have to deal with it. The difference is amazing today. We have much better analytical and sales support tools. The implementation of technology has elevated the brokerage agency from quoting term and shopping impairments to much more of an educator, marketer and business partner with the broker.

Q: What is TMA doing to grow brokerage sales?

Protzel: Our central focus is to help our BGAs increase sales. It’s what we do through our marketing pieces, educational programs and communications. We are offering BGAs tools to be more valuable to their brokers. On any given day, 70 percent of a BGA’s day is dealing with administrative stuff that can distract him from his number one priority-selling. BGAs are bombarded with too much information that doesn’t necessarily pertain to them.

Successful BGAs now understand that one way to increase their sales is to have case managers involved with the sales process. A case manager can still provide a status on the case but really position himself as a resource for the broker and a marketer for the agency. By helping a BGA change the focus of his current staff, we help our clients’ businesses grow organically.

We also help our BGAs turn variable costs into fixed costs. This makes our BGAs more profitable and more focused on selling. We offer underwriting and case processing on a per case basis, relieving them of fixed expenses and overhead. Also, particularly in the case processing/case management arena, we are able to offer these services very economically due to the economies of scale we achieve in processing a large number of applications at our facility. Variable versus fixed; economy of scale; not placing business through future competitors-these all allow our BGAs to focus on attracting brokers and helping them sell.

Klusas: We are paired with amazing, off-the-chart salespeople in the BGAs. Their highest and best use is selling. We try to remove any obstacles that prevent them from selling. BGAs are obsessed with information because they need it to grow their businesses. What we attempt to do is provide easy access and sort out the pertinent information they need to operate their business. We provide their staff with information specific to their roles. We strive to cover everything from product changes and carrier updates to sales ideas and industry news.

Also, I want to expand on what Alan mentioned earlier about the increased pace of how business is processed. It has changed dramatically just within the past two years. We are doing everything we can to get out in front of all business changes before our clients learn from someone or somewhere else and find themselves in “reaction mode.” We want to be their go-to source for information since they trust us to provide them with accurate, real-time and complete answers the first time.

Q: What will brokerage look like in five years? Who will be the brokers? What will be the profile for a BGA?

Klusas: I think the BGA is going to increasingly find himself in the distribution business and less purely in the life insurance business. For example, in order for a boutique BGA to be successful, he may have to align himself with an alternative distribution channel like a bank or property/casualty company to sell insurance. It will become tougher to survive just doing business on your own without building a network or alliances. I also think that the industry needs to pay more attention to regulation currently being proposed as it could cause dramatic changes in our business with unintended consequences.

Protzel: I see fewer traditional life brokers and more non-traditional channels selling life insurance. I’m already seeing it. I can see the boutique BGA aligning himself with the big BGAs. More life insurance will be distributed by people who do notidentify themselves as life agents-just as more equities are distributed by people who do not identify themselves as stockbrokers. They will have more resources available and will offer more diversified products and services.

Q: Who is an ideal candidate to add life brokerage to what they do?

Protzel: Someone who has the ability to sell intangibles. A person who can sell cars doesn’t necessarily have the ability to sell financial services. Such a person needs to understand wealth management, finances, business principles and accounting, and to work with a prospect to understand why a certain product is needed to protect family and invest in the future.

Klusas: Despite the technological ad-vances introduced over the past several years to make selling faster and easier, the selling that still matters is when a broker is sitting face-to-face with a client. Selling is not easy. It takes hard work and perseverance to be successful. This will not change in the future regardless of how much technology improves the process. Skills and traits that successful brokers still must possess are empathy, active listening, and the ability to teach and explain the benefits of life insurance in a sincere, intelligible way.

Q: What can carriers do to be more closely aligned with the brokerage business?

Klusas: Continue to manufacture high-quality products and publish sound sales ideas. The single best thing carriers could do, in my opinion, is maintain a consistent, sustainable product portfolio that a BGA can build a business around.

Protzel: They need to continue to leverage the benefits of technology. It aids in the sales process and makes life insurance more affordable.

Q: What advice do you have for someone thinking about entering the industry as a broker?

Protzel: Find a BGA who adds value. Find a good BGA who can help you sell by keeping you away from administrative tasks that distract you from the sales process and, more importantly, provides you with educational, sales and marketing tools to improve your service-make you more valuable-to your clients. Interview a BGA’s top five brokers.

Also, ask yourself if you have a “natural market.” There are excellent opportunities available for well-defined cultural markets or industries where you previously worked. People who have had careers in other industries come into the brokerage industry with an advantage of already being knowledgeable and knowing the language in that industry.

Klusas: Some of the most successful brokers work with underrepresented audiences-whether it’s first language, gender or ethnicity. The key is to speak, literally or figuratively, the language of your audience to create mutuality and build credibility. It also allows our industry to reach people who are truly underserved by us all.

Thank you, Tim and Alan!