Why sales is more relevant than ever in an era of increased regulation

This question started when I heard Tony Gribble talk about the value of the Million Dollar Round Table, or MDRT, at an adviser meeting recently.

Tuesday, September 26th 2023, 10:14AM

by Russell Hutchinson

I had just given a presentation on the challenges of replacement business. In contrast to my presentation, Gribble’s was optimistic, focused on growth, and clearly well-received.

It had been some time since I had heard much about MDRT, so I was keen to talk with Tony afterwards. Following that discussion, I had contact from Rick Willis, MDRT New Zealand chairman. Rick suggested that I attend the upcoming MDRT Global meeting in Singapore as a special guest – which simply means that I get an invitation to the conference, as not being an adviser, I would not otherwise qualify.

Late last month I joined a dozen Kiwi advisers and some leading insurance company managers in Singapore to find out all about MDRT. Just in case you were thinking ‘junket’ I should point out that I paid my own way. All the Kiwi party did.

That’s the first point to note: if these people are all willing to invest substantial time and money to attend a four-day event, then clearly they are getting a lot out of it.

MDRT has stressed, since its very foundation, that in order to receive, one must give. It was built on the idea that leading insurance advisers should share what made them successful with others.

How do you know if they are successful?

Well that’s where the ‘million dollar’ part of the equation comes in. It was a sum insured threshold for membership which indicated a level of commitment on the part of the member. This qualification remains valuable as in many places advising on life insurance is a part-time or temporary adjunct to another career.

Various indicators differentiate between those at the top of the MDRT hierarchy and those lower down – how much business do you do?

How many years have you qualified?

Do you donate to the foundation?

Do you volunteer?

Are you a speaker?

Every speaker emphasises values. I must have heard at least two dozen over the conference; and of those that run financial services businesses they would all have highlighted the importance of placing the interests of clients ahead of their own.

Remember that in order to receive, you have to give, and that giving must come first.

That applies to client engagement events or in the case of one focus session speaker “you simply have to care more about the client making a good decision than your desire for a sale”.

That implies that a lot of financial advice members still have businesses where they are rewarded by commission for sales of financial products. That’s still true for most of the New Zealand industry as well, of course. So, it all seems very relevant.

But what of the future? What about other models?

I heard one speaker from Australia, Baz Gardner, talk at length about the value of a fee-based practice. His work is coaching advisers on how to shift to a fee-based model.

In his question and answer session his advice was intensely practical: what to say to clients who question paying a fee, for example. I hear lots of people criticising commissions, I was delighted to hear good advice on how to talk about fees, and it was at MDRT.

Another great presentation covered how to explain to customers core concepts such as volatility, average returns and differentiating between high risk and lower risk investments.

These insightful messages were entirely rooted in a clear understanding of how poorly most non-financial folks understand financial matters.

It is fashionable to talk about financial literacy right now – but advisers are frontline financial educators, and their experiences should carry more weight in discussions.

They know how hard it is to succinctly, and most of all memorably, imprint in a client’s mind an understanding of ideas and issues that financial professionals take for granted. It was well worth hearing.

Another speaker gave a new twist to the old umbrella metaphor for insurance. Another talked powerfully about the value of preparation – a universal requirement for clients of all types of financial services. Another talked about how to refer clients that you cannot serve to appropriate sources of assistance.

Everywhere advisers were thoughtfully and passionately advocating for excellence.

I think it’s great, but I realise that my view isn’t really that important in this forum, because what really matters is what advisers think - and they think it’s great.

The businesses that they run are service leaders and if that’s what happens to the financial advice providers that join MDRT, we should all think it’s great.

Tags: Russell Hutchinson