How should FAs sell their insurance products ?

First of all, calm the fuck down.

[ Note that this post was removed from the Seedly discussion group because of my use of the four lettered word. Moderators wrote to me to explain their stance. There is no hard feelings but this reflects how much FAs fear articles like this on the web. They rather censor me than debate earnestly on this topic. Do spread it around because the context behind my use of 'fuck' is not meant as a cuss word. ]

I'm not here to bash Financial Advisors today.

I am teaching myself how to sell better and thought the best way would be to get to the level that I can teach someone so that I can become an ace salesman myself. Also, Dr Wealth sales staff are fans of my blog and I want to give them a little bit of training of my own.

I think there is nothing better than to demonstrate to FAs how to sell better to level up my own skills as a sales person. As it turns out, the old formula of introducing the product, acting exceedingly fake and optimistic about it, trying to close and then working super hard to deal with objections, is a thing of the past. As consumers, we know that you will employ these Jedi mind tricks on us and this explains why the internet is full of negative press about financial advisors.

Instead int he book Flip the Script by Oren Klaff, a much better model is proposed.

I think if an FA were to follow this script, they can do much better.

[ Note that I am not qualified as an Financial Advisor and the dialogue serves to demonstrate a sample sale and should not be taken as investment or insurance advice * Wink * * Wink * ]

Oren calls this the Buyer's Formula :

a) Introduce the buyer's formula

The trick is not to sell any product, but to sell a buyer's formula. Unfortunately, this formula has to come from a position of sincerity and earnestness. I will demonstrate my Buyer's formula for term life : "Look, a lot of students I have overpay for insurance. The quickest way around this is to find a mix of products that produces the lowest commissions for insurance sales personnel. This means hunting for a range of products that they will NOT SELL to you."

Now I got your attention, I'm not a just another fly-by-night FA.

b) Outline obvious ways to fail.

" Look at ILPs being peddled by FAs. They are obvious commissions generators. I know someone who is aged 60 and he tells me that he pays so much for his mortality credits for his ILP, his investments no longer increase in value after he pays his premiums. Also his ISP's with a Class Ward A has just gone up in premiums again. And critical illness is just a lottery ticket that pays when you get cancer.  That's no fun if you are at the age where you can't work anymore ! "

This is not only believable. This can be true. More interestingly you are an FA who seems not to be interested in pushing expensive products to the buyer. Intriguing.

c) Highlight Counterintuitive ways to fail.

"I'm all for buy-term-and-invest-the-rest and I can process your term insurance purchase right now if you wish, but the problem with term life is that it may not cover the case where you have some accident or mental illness and can't perform your task. I have disability income insurance and I bet no other FA has ever tried to sell to you before."

You highlight the small flaws for strategies that investors employ like BTIR but support it along so that I can find a genuinely good product to complement it - Disability Income insurance.

d) List Obvious Actions

" The trick would be to buy insurance without an investing component but figure out how to invest for a better future. Investors need a different kind of insurance plan : a cheap accident policy, a minimalist hospitalisation and surgical plan of up to B1 ward, and this disability income insurance. You can do all this with your term life for less than $300 per month if you already have AVIVA Group Term Life. You can focus the rest of your income on dividends stocks."

e) Less Obvious Hacks.

" Oh yes, you're probably smart enough to create a REIT portfolio on your own. At 6% yields, this insurance is free if you have a $60,000 REIT portfolio. A good investor should never pay for insurance from his earned income ! "

Genius ! Who thinks of shit like that ?

f) Hand over Autonomy

" Look, you are already a dividends investor, I can't really tell you what you should buy but I've done this hundreds of times with other clients and they are really happy with this combination of insurance products. "

Modern buyers don't like to be told about how to run their financial lives by Financial Advisors. This pisses me off. If you hand over autonomy to me, I am actually more plaint to future requests.

g) Redirect to keep buyer in bound.

" Yes, the combination may not pay out too well if you get cancer because there is no Critical Illness insurance, but that's what your investment portfolio is designed to do. Your investment portfolio will cover contingencies not covered by insurance such as getting retrenched, kids going to university,  or that stupid cousin wants money to open a coffee stall. "

Just let the customer object and get their satisfaction. You don't have to deal with every objection aggressively.

I'd like FAs to seriously consider using this gentler sales approach to earn their money, it requires a more intimate understanding of the customer and an honest assessment of products you can sell to make the world a better place. Maybe over the long term, you may earn lower commissions per sale but you can make it up with stronger volume coming from better referrals.

Another way of looking at this is that competing FA reading this will try out my script and actually starts getting sales from it - can you risk ignoring this different approach used by your competition ?