Knowledge is power. There is no question about that. But for an industry that has faced scrutiny in recent years, the power to change a negative perception regarding fixed insurance products has been limited at best. How did this happen? Why have perceptions of products and the agents who sell these products suddenly become tarnished?
The fixed insurance industry has seen changes in recent decades. The introduction of fixed indexed annuities was only 13 years ago, and at that time, with a new product concept came significant agent training. Licensed agents were equipped with the information they needed to adequately understand the product and properly explain it to their clients.
Since then, the industry has evolved. More products by more carriers have come to market. In order for carriers to stand out, they invented creative ways to promote their products: higher commissions, bonuses, etc. The emphasis on agent education lessened and product pushing began.
Back to the future
Fast-forward to 2008, and we now have thousands of agents in the field representing fixed insurance products, but who don't fully understand what they're selling, who they're selling it to, and even why they're recommending it to their clients. But don't blame the agent; it's not just the agents' fault that they are not properly trained by the IMOs they contract with and/or the carriers they are selling. It's the IMOs and carriers who need to re-emphasize product training. This will give their affiliated agents the knowledge and power to better serve their aging clients.
So why the negative perception of the fixed insurance industry? If agents in the field do not fully understand what they're selling, then they misrepresent a product, not out of immorality, but due to a lack of industry education, making the client unhappy. Clients may then report their experience to local authorities; the media becomes privy to the situation and reports it with a slanted angle, placing the carrier and product in a negative light.
Where did this begin? With a hard-to-please client? With a biased media representative? No. It began within the industry itself and has been brought to light by the unequipped insurance agent.
The insurance industry offers agents amazing opportunities, yet many young recruits who join the field exit just as fast. That can't be because they don't believe in what the industry has to offer, or they wouldn't have entered in the first place.
It's because they are not properly educated in industry fundamentals, products and moving parts, clients, suitability issues, client profiling and basic business management skills. We are setting new agents up for failure because we are not properly educating them on what they need to know to be effective and successful.
And for agents that have been in the business for the long haul, it's our responsibility to provide them with continuous education–especially in an industry that encompasses constant change. Our target market for fixed annuity products has changed.
