Desperately seeking young agents

Educating the public about that opportunity — and turning the insurance and finance professions into beacons that attract talented young producers — will be key to reversing the exodus from the advisory ranks, McNeely asserts. "The [insurance] industry could be doing a better job articulating what the opportunity is. It's telling the story about what working in the [insurance] industry is really like and getting it out there" through coordinated campaigns like those undertaken by TD Ameritrade and the LIFE Foundation.

But creating a sustained influx of young production talent requires more than industry-wide public education and scholarship programs. Industry observers agree that individual insurance carriers and agencies/advisory firms themselves, along with the people who lead them, are most critical to stemming the tide, since they're the ones in charge of recruitment and retention efforts.

One key to both recruiting and retaining young producers at the firm level, says Susan S. Toussaint, co-founder and partner at Oceanus Partners, a Lutz, Fla.-based, insurance-focused consultancy, is to build the firm's value proposition around a specialized area of the insurance or finance business, so the why behind the business is clearer to new recruits. "The value proposition really has to speak to why the firm does what it does, how they do what they do and the impact of what they do. They want to know who they are helping and why."

On the recruitment side, casting a broader net is key to finding quality young salespeople, according to McNeely, pointing to Reagan Consulting's recently updated Young Producers Study, which concludes that "college recruiting does work, but many agencies have found better success in hiring young men and women that have several years of work experience. These hires may be a little more expensive but they typically have greater maturity and bring real-world experience."

"It's about finding good consultative salespeople," McNeely elaborates. "You can always teach them the [insurance] business."

To attract young talent, "fish in their pond" — use social media sites as recruiting tools, as Schubert is doing with LinkedIn and CraigsList. "I have gotten a lot more conservations going that way than I ever thought I would," he says. Fishing might also entail approaching local universities and asking them to allow you to talk with students about opportunities in the advisory/agent space, and by offering internships to college students.

Use youth to attract youth, suggests Schubert, 35. Young agents can be invaluable in helping attract young recruits, such as by involving them in the interview process. There's comfort knowing "there are others like me here," he says.

To strengthen retention, the finance and insurance sectors need to improve advisor/producer training programs. Today, according to Cerulli, training efforts on the whole are falling short. "Despite heavy investment, firms see little yield; an estimated 20 percent to 30 percent of trainees survive to make it as productive advisors. Given current hiring rates and anticipated retirements, conversion rates would need to move higher than 67 percent to break even with attrition."

Strengthening training programs means "coaching [trainees] to a well-defined model," and making sure the model is supported with adequate resources, maintains Toussaint. That contention is supported by Reagan's Young Producer Study, where respondents identified high-quality support staff and value-added services at the firm level as among the factors most instrumental to their success.

Keeping lines of communication open between trainees and trainers, and making the evaluation and training process as transparent as possible, are key to retaining young producers, says Schubert. "It's important during onboarding to set out what they can expect, and to stick to the plan. It's also important that they know who to talk to if something's not going as expected."

A strong mentoring program is also essential to successful young producer training and retention. It's "the number-one thing firms are doing to increase the success rate of the people they are hiring," says McNeely. The most effective mentoring programs, he adds, are those where mentoring relationships aren't forced upon people but instead arise organically from within the culture of the organization.

Teaming is proving to be a similarly effective retention tactic, according to LIMRA's Sondergeld. Nowadays, he says, a majority of successful advisors participate in some sort of team, often revolving around revenue sharing.

A well-structured incentive program also strengthens retention, according to Schubert. He suggests paying an equal percentage of commission on new and renewal business, and creating friendly internal competition around each.

There's also an important role for carriers to play in the recruitment and retention efforts at the firm/agency level, asserts Schubert. "Insurance carriers have a lot of influence. They could prioritize partnering with agencies that have proactively positioned themselves to be strong in the future. That would send a strong message."

Until firms and carriers alike show a stronger inclination to deliver and act on messages like that, the advisory ranks are likely to continue shrinking.