more annuity strategies that work

3
“So,” he continued, “assuming you’re in it for the long haul, let’s look at what we have going for us. I think most distributors of product would contend that banks are very uniquely positioned to do a great job in getting personal lines products to their customers. And these are some of the things we have. We’ve got brand. How many people have seen First Union commercials, all over the United States? There isn’t a First Union branch, other than maybe some securities offices, within 500 miles of Milwau- kee. Yet, I see their commercials constantly! They’ve got brand. “A lot of that is built through mass marketing and media efforts. For smaller banks, you’re there. You have a presence. You’re trusted. You have tons of things going for you. And there’s also the issue of affinity. A lot of people would dispute the fact that card businesses have a strong affinity within the banking relationship. Because, much like the insurance industry has taught customers to shop, the credit card business has taught customers to s h o p t o move their balances. They hook people with these teaser rates, that are out there.” Dumbauld emphasized banks’ strengths here. “My contention,” said Dumbauld, “is that your brick-and- mortar banking franchise has a very, very strong affinity. And for smaller community banks, that have partnered with independent agencies, that affinity is something you absolutely, positively need to play on. For larger institutions, you’ve got to roll with the developments within your organization-with different card portfolios, or however you decide to approach that.” Banks definitely have an advantage when it comes to distri- bution. “Don’t thinkthere’sany question about that, at al1,”Dumbauld asserted. “And probably the most important thing is that we have relationships. We’ve got relationships with carriers, we have relationships with important third parties, we have relationships with state banking associations. And most importantly, we have relationships with customers.” A positive future? That makes Dumbauld feel positive about personal lines for banks. “I think that these advantages tremendously outweigh, in the long term, the other barriers to entry,” Dumbauld revealed. “But can we rest on our laurels? Can we say that we’re all insurance professionals, and we know what our customers need? We know that we can’t necessarily bow to any whim. But that’s not the true state of affairs. Customers are looking for value. “What do they want?’ he asked. “They want personal insurance that’s cheaper, better, easier, and faster. And I think this is the battle that the whole industry has been fighting, all along.” W MORE ANNUITY STRATEGIESTHAT WORK ant some annuity strategies that work? W Tom Streiff has some good ideas. Streiff, who is a Certified Financial Planner (CFP), Certified Life Underwriter (CLU), and Chartered Financial Consultant (ChFC), is also an insurance and banking consultant. He is president and CEO of Talbot financial services, and co-founder of the NFC Consulting Group. Streiff revealed some valuable insights at a recent convention of the Association of Banks-In- Insurance (Washington, D.C.). No commodities! For one thing, he strongly believes bankers shouldn’t sell fixed annuities as commodities-because we will suffer when rates plummet. “And 1 can tell you,” Streiffoffered,“that there are a number of very successful fixed annuity programs, inside and outside of banks today-because the bank, or the distributor of the product (if it isn’t a b a n k t h a s not commoditized the product!” So what do these banks do? “They do illustrate the differences,” Streiff noted. “They have not forgotten the fundamentals of what is an annuity, and how fixed annuities are advantageous in the accumulation and distribution phase of somebody’s retirement savings plan.” - The most successful fied annuityprograms refuse to sell their products as commodities. That’s the key. “If you forget that, they’re commodities!” Streiff said. ‘‘If you don’t forget that, they’re not commodities. So that’s my little pitch on fixed annuities. If you can put that together with a sales program, you can successfully be selling fixed annuities today!” But he added some caveats. ‘‘It’s not as easy on the dedicated rep side,” cautioned Streiff. “And you know what? Frankly, it’s not so easy on the platform 12 BANKS IN INSURANCE REPORT SEPTEMBER 2000 0 2000 John Wiley & Sons, Inc.

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Page 1: More annuity strategies that work

“So,” he continued, “assuming you’re in it for the long haul, let’s look at what we have going for us. I think most distributors of product would contend that banks are very uniquely positioned to do a great job in getting personal lines products to their customers. And these are some of the things we have. We’ve got brand. How many people have seen First Union commercials, all over the United States? There isn’t a First Union branch, other than maybe some securities offices, within 500 miles of Milwau- kee. Yet, I see their commercials constantly! They’ve got brand.

“A lot of that is built through mass marketing and media efforts. For smaller banks, you’re there. You have a presence. You’re trusted. You have tons of things going for you. And there’s also the issue of affinity. A lot of people would dispute the fact that card businesses have a strong affinity within the banking relationship. Because, much like the insurance industry has taught customers to shop, the credit card business has taught customers to s h o p t o move their balances. They hook people with these teaser rates, that are out there.”

Dumbauld emphasized banks’ strengths here. “My contention,” said Dumbauld, “is that your brick-and-

mortar banking franchise has a very, very strong affinity. And for smaller community banks, that have partnered with independent agencies, that affinity is something you absolutely, positively need to play on. For larger institutions, you’ve got to roll with the

developments within your organization-with different card portfolios, or however you decide to approach that.”

Banks definitely have an advantage when it comes to distri- bution.

“Don’t thinkthere’sany question about that, at al1,”Dumbauld asserted. “And probably the most important thing is that we have relationships. We’ve got relationships with carriers, we have relationships with important third parties, we have relationships with state banking associations. And most importantly, we have relationships with customers.”

A positive future? That makes Dumbauld feel positive about personal lines for

banks. “I think that these advantages tremendously outweigh, in the

long term, the other barriers to entry,” Dumbauld revealed. “But can we rest on our laurels? Can we say that we’re all insurance professionals, and we know what our customers need? We know that we can’t necessarily bow to any whim. But that’s not the true state of affairs. Customers are looking for value.

“What do they want?’ he asked. “They want personal insurance that’s cheaper, better, easier, and faster. And I think this is the battle that the whole industry has been fighting, all along.” W

MORE ANNUITY STRATEGIES THAT WORK

ant some annuity strategies that work? W Tom Streiff has some good ideas. Streiff, who is a Certified Financial Planner (CFP), Certified

Life Underwriter (CLU), and Chartered Financial Consultant (ChFC), is also an insurance and banking consultant. He is president and CEO of Talbot financial services, and co-founder of the NFC Consulting Group. Streiff revealed some valuable insights at a recent convention of the Association of Banks-In- Insurance (Washington, D.C.).

No commodities! For one thing, he strongly believes bankers shouldn’t sell

fixed annuities as commodities-because we will suffer when rates plummet.

“And 1 can tell you,” Streiffoffered, “that there are a number of very successful fixed annuity programs, inside and outside of banks today-because the bank, or the distributor of the product (if it isn’t a b a n k t h a s not commoditized the product!”

So what do these banks do?

“They do illustrate the differences,” Streiff noted. “They have not forgotten the fundamentals of what is an annuity, and how fixed annuities are advantageous in the accumulation and distribution phase of somebody’s retirement savings plan.”

-

The most successful f i e d annuity programs refuse to sell their products as commodities.

That’s the key. “If you forget that, they’re commodities!” Streiff said. ‘‘If

you don’t forget that, they’re not commodities. So that’s my little pitch on fixed annuities. I f you can put that together with a sales program, you can successfully be selling fixed annuities today!”

But he added some caveats. ‘‘It’s not as easy on the dedicated rep side,” cautioned Streiff.

“And you know what? Frankly, it’s not so easy on the platform

12 BANKS IN INSURANCE REPORT SEPTEMBER 2000 0 2000 John Wiley & Sons, Inc.

Page 2: More annuity strategies that work

side, either. But just because it isn’t easy doesn’t mean we shouldn’t do it!

“There are a whole lot of things that we d e a n d work very hard to do--that aren’t easy,” he pointed out. And frankly, sometimes the best rewards come from doing something that isn’t particularly easy. Because, you know what? None of our competitors want to do it, either! It’s also a way to differentiate yourself from your competitors. So that’s the end of my fixed annuity commercial.”

Combined programs: What works? He then turned his attention to hybrid or combined pro-

grams, which use both dedicated reps and platform people to sell.

It isn ’t easy selling fured annuities. But that doesn ’t mean banks shouldn ’t do it!

“Okay, what works today on combined programs?” Streiff asked. “Well, the first thing you have to do is view it as a combined program. If you view it as, ‘I’ve got a dedicated rep program,’ or, ‘I’ve got platform program,’ you don’t let these people talk to each other, and you don’t let these people work with each other, because they’re really competitors. So you have significantly lowered your probability of success. You have probably failed!”

There’s a better approach. “Instead,” Streiff instructed, “what you should do is view

these as a combined approach, a combined program-where you’re saying to yourself, ‘We’re a team! And we have common management goals. We have a team approach to delivering the product, and we have a team approach to our compensation system.’ There’s probably a lot of branch management who would bristle at what I’m about to say. But here’s what seems to work in most cases-not all. And that is, that the dedicated rep is basically the team leader. And the platform folks work with the dedicated reps.

“Now, you may not actually do that,” he added. “But it really makes the dedicated rep feel good if you do that. And if the dedicated rep is feeling good about this process, the whole process is going to be much more successful. So that’s some- thing, I think, to keep in the back of your mind.

“You may have political, or other organizational reasons why you can’t do what I just suggested. But you also may find that if you can do it, it can be highly successful. If you put it all together in a team approach, it significantly increases the prob- ability of success.”

These days, Streiff thinks bankers should place special emphasis on who they hire.

“On the platform side,” advised Streiff, “clearly, make sure you have a selection process that chooses the right people. You don’t want to be in one of these situations where you’ve licensed 400 people, and only eight of them are selling the product. And in some cases, we’ve seen that! It may be a little bit of an exaggeration-but not much.”

Instead, model your own program after successful ones- like the one at Mellon Bank. There, teamwork really counts. And everyone pulls his or her weight.

“Mellon Bank is absolutely on the other side of the spec- trum,” said Streiff. “But you don’t get to the other side of that spectrum-where 400 people are licensed, and 350 of them are selling your product-unless you do some things that are really right. And you can really suffer if you go through the pain of getting a lot of folks trained and licensed, and they aren’t selling for you. You know that!”

Makesureyou selectthe rightpeople. You can ’tafford to license 400people-and only eight of them are selling the product!

Showing support Support is key. “But you must not just talk about support,” warned Streiff.

“You must show support! And this support has to come from everywhere. The platform folks have to really feel this is happen- ing. They have to be supported by the top management of the bank. They also have to be supported by the branch management of the bank. And they really have to feel that support in the delivery ofthe product. Ifthey don’t feel that support, you’ll have a significant amount of trouble.”

“Third,” he continued, “you want to have the overall team approach support. So they have to be supported by their peers on the platform, they have to be supported by the branch manage- ment, they have to be supported by the top management, and they have to be supported by the dedicated rep program.”

But what about sales training and product training? “If I didn’t mention those, I could probably be accused of

malpractice here,” Streiffjoked. “But I want to go beyond what most of us might consider to be sales and product training. I will add in an education curriculum, and I will bring this all together in the form of a discussion of education training.”

Streiff’s idea of an education curriculum involves long-term planning.

“I believe strongly,” Streiff asserted, “that you should have a curriculum put together that includes a schedule of at least a year. And actually, in some cases, we put these together for two or three years. We say, ‘Here are the classes. Here’s what’s going to be happening on product training. Here’s what’s going to be

BANKS IN INSURANCE REPORT 0 2000 John Wiley & Sons, Inc.

SEPTEMBER 2000 13

Page 3: More annuity strategies that work

happening on sales training. And here’s what’s going to be happening on other types of education.”

But what should you include in your curriculum? “Any education,” Streiff maintained, “should include issues

like: ‘Why should an annuity be used? Where should it be used?’ And so forth. And we’ve actually built school-type curriculums for this, because we believe so strongly in it. We start with the ‘ 101 ’ (most basic) class, and then move to the ‘20 1 ,’ and then the ‘301 ’ class. And because you’re doing a ‘301 ’ class, that doesn’t mean you should not be doing the ’ 10 1 ’ class. Because there are always folks in your program, at any given time, who need that ‘ 10 1 ’ class. And at the same time, they are going to be folks, after you get up and running, who need the ‘30 1 ’ class. So you have to be doing all these at the same time.

“But you can’t do that on a haphazard or random basis,” he warned. “You have to put together a program, and a curriculum, to do that. And if you do that, you will significantly enhance your probability of success.”

What about product training? The same kinds of lessons apply to product training. “Again,” Streiff reflected, “here is something I see many

times-although this is a little truer for broker-dealers than it is for banks. But it is certainly true in some bank programs. And that is, ‘product training’ is when the wholesaler takes you to the baseball game. Well, that’s not product training! You can talk about our product at the baseball game, but that’s not product training. And you really have to be in a position where the folks who are selling your product understand your product!”

Because that helps you in many ways. ‘‘It’s going to keep you out of compliance trouble,” Streiff

explained. “And it’s going to protect you from other forms of liability-like customer liability. And a whole bunch of us are very comfortable with doing something wrong-and I plead guilty, because I do this myself. And that is, we jokingly call the compliance department the ‘Sales Prevention Department’- and sometimes it is! But a whole lot more often, it isn’t. If we cooperate with the compliance department, and we cooperate

with the folks who, overall, want to reduce our liability, you know what happens? Our sales go up if we do that right!

“And that’s part of putting that whole training process together. It’s part of putting product, sales training, and an education curriculum together. You will end up with a much better informed salesperson, which translates into a better in- formed customer, which-in my opinion-translates into more sales. Some people will disagree with me on that. But I firmly believe that. It translates into more sales, if you’ve done it right. And that’s the important part.”

Think process, not events But the way you view all these elements is vital for success,

as well. “All too often,” Streiff lamented, “the things I always

mention-getting top management support; getting top manage- ment to understand the sales, process, and products; choosing the right employees; the education cumculum; the product training and sales training-all the things I talk about that make the program successful, they are viewed as events. But if you view them as events, you’ll be successful only for a short period of time. Then, you’ll fail!

“What you have to be able to do is to view these as an ongoing process,” he urged. “For example, you may say to yourself, ‘Four months ago, I educated top management. They understood this.’ But is it possible that top management in any of your programs forget things? Yeah, they forget things you told them five minutes ago! Just like we all do.”

So you need an ongoing process to keep top management educated.

“And this should be a plan,” Streiff encouraged. “In fact, it works best if you write it down. Make it part of your goals. Make it a plan. Decide what’s important for your success, in your program. And write down how you make that a process!

“Some of you do this very, very well,” he reflected. “But many of the rest of you could make it better. And that’s actually the lesson that I’d like to impart today-how you can take some of these things, and make them better.” W

+++ BOOSTING WEB BUSINESS WITH THE RIGHT SEARCH ENGINE

ow can you best promote business through your bank’s H Web site? As increasing numbers of users have turned to banking Web

sites for specific needs and information, the search engine has

evolved-from a simple Web tool to a business necessity. Unfor- tunately, it’s also easier and faster than ever to lose customers- ifthey can’t find what they want to buy, or can’t find information that they need, quickly and easily.

14 BANKS IN INSURANCE REPORT SEPTEMBER 2000 0 2000 John Wiley & Sons. Inc.