Broker Words—April 2023

“Well, I’ve been afraid of changin’ ‘Cause I built my life around you…”—Stevie Nicks

Hope and I joined my awesome sister-in-law and brother-in-law, Christy and Rick White, in Raleigh, NC, last October for what Chris described as a “bucket list” event—Stevie Nicks in concert. The venue was an amphitheater with maybe the best acoustics I’ve ever experienced, but traffic to, and parking for, the event was indescribably abysmal…it took more than two hours to travel the final two miles to the venue and to get to the nearest open parking spot more than a mile from the gate. We missed the opening act and about a third of Stevie’s performance. But we heard easily a dozen wonderful classic songs including my favorite (and Hope’s), Landslide.

Although an astoundingly talented singer and songwriter, I wouldn’t have put this concert on my “bucket list” simply because…I’d seen Fleetwood Mac a number of times times, the first in 1977 and the last in September 1987…when annuity rates were around 9.5 percent with seven percent commissions. The late 80s marked perhaps the heyday of the band, and the following years would see the all too common departures, reunions and reformations, and one could argue that they found it difficult to recapture the true magic they produced in years past. Annuities would continue to climb for the next decade or two and that’s with the word “indexed” pertaining most commonly to the organization of library books.

What I can tell you is that Stevie Nicks still looks amazing and can belt out her magical songs as wonderfully as ever. It was truly an amazing two-thirds of a concert and worth every penny and traffic exasperation. But our industry looks a heck of a lot different than it did in the 80s, 90s, 2000s, etc., which isn’t necessarily bad…or all bad…it just is. And the last 10 years have brought about more change than most of us could have ever imagined.

Let’s begin with the lack of purely brokerage companies. I miss First Colony, and Fidelity Bankers, and Life of Virginia, and a bunch of others. Mergers and acquisitions. Brokerage divisions within carriers are still vibrant and alive, but one wonders if all the advancements in automated underwriting isn’t a slippery slope sliding us away from the origins of the brokerage business—finding coverage for the less-than-preferred risk. I sure hope not, as I count a bunch of underwriters and medical directors as friends (especially Dr. Bob). Is our industry sneaking toward the Space Odyssey where Hal decides that the fit get coverage and the rest of us simply become Soylent Green? Wow. Quite a stretch from You Make Loving Fun…

From hundreds of companies offering DI there are now only a handful. Same with stand-alone LTCI. With the wonderful, in my mind, advent of asset-based long term care, one wonders if, without State or Federal government intervention, my buddy Hagelman isn’t shoveling against the brown tide. Back to annuities. The climbing interest rates (biting my conservative tongue) that make it haphazard if not ridiculous for me to entertain the thought of a new house, with a new mortgage, may reinvigorate the fixed, non-indexed, annuity market but for how long? Meanwhile, non-literary indexing seems to be working well. This and the previous are just two examples of our industry’s incredible ability to adapt to circumstances and still prosper. But where is “Middle America” ultimately to turn for life coverage on a budget when it is extremely challenging for agents to make a living on term commissions? Agent initiated term sales to families just starting out must by necessity be viewed by producers as either a long-tailed investment in a client relationship or simply as service work. Add to this the chronicled aging of the independent agent force, the dearth of new recruits, and the fact that more people in my outside circle of acquaintance have fallen prey to time-share salesmen than have actively initiated or even researched a life insurance purchase via the internet on their own.

Further on distribution, the National Association of Independent Life Brokerage Agencies (NAILBA), the bastion of brokerage for more than four decades, has merged with Finseca. Similarly, you used to couldn’t swing a dead possum without hitting a BGA marketing group, and now the merger of LifeMark Partners with BRAMCO, and more recently IDA, has formed one “super” marketing entity, with TMA still flourishing on the outside, but leaving some fewer others to find a decent niche and/or compete with varying degrees of success. And the mergers and acquisitions don’t end there—literally dozens of BGAs I’ve come to know over the years, and a remarkable number of my best friends in the industry, have been acquired by various incarnations of aggregators. I have no choice but to be optimistic for these friends, based in no small part on their unquestionable integrity, but taken as a whole I’m holding my breath regarding how this trend will affect the BGA system and the dedicated agents they serve.

Stevie Nicks is reported to have said that, “Landslide is about the fear of everything coming crashing down and not knowing how you’re going to hold things together in pursuit of a dream.”* If anything, 40 years in this business has taught me that the brokerage industry is nothing if not resilient, always finding a way to create new products to adapt to market conditions and provide the best possible solutions for you dedicated agents to meet changing consumer needs. We can take heart in that.

“But time makes you bolder, even children get older, and I’m getting older too. Oh, I’m getting older too.” [SPH]

* stevie-nicks-describes-the-true-meaning-of-landslide/