What’s the Difference Between an Advisor, a Planner and an Agent?

For me, after spending 27 years in career agency life insurance sales, one thing is clear: We were not and could not be considered fiduciaries. The training, incentives, compensation and rewards were based on sales production.

When I entered the life insurance sales industry in 1992, we obtained an insurance license, not a securities license. We sold insurance and annuities.

From the first employment interview, it was clear who we were, what we did, and how we were compensated.

Life Insurance is a risk-sharing management tool.

Life insurance was created to pool premiums to cover those who suffered a loss. Many paid premiums to help the few. It was a protection tool, not an investment tool.

Originally, we had two types of solutions. If consumers decided their risk was temporary, they bought term life. If their risk was permanent, they bought whole life, and, later, universal life.

Commercial annuities provided similar protection for people who lived longer than expected.

There are no laws that require consumers to have life insurance. Life insurance was a love purchase. That’s where sales came into play. No love, no sale.

When I joined the life insurance industry as a producer, my job was to sell and meet production quotas. We were given the carrot and the stick. The carrot was an office, training, benefits, and health insurance. The stick was proprietary sales quotas and keeping your job.

What We Learned

As new full-time sales professionals, we started with no inventory of clients or people to speak to. We were all instructed to create our Project 100 list before we started selling.

This was a list of people who knew, liked, and trusted us the most. In other words, people who would take our “advice” and ask the least questions.

Years ago, the sales training consisted of:

• “Dig them a hole and throw them a line.”
• “Probe, probe, probe for pain points.”
• “Shy salespeople have skinny kids.”
• “Nothing happens until a sale is made.”
• “I will be in your neighborhood next week. Will Tuesday at ten or Thursday at four be better for you?
• “Selling is a contact sport. Keep meeting people.”
• “Fake it until you make it.”
• “Keep working and updating your Project 100 hit list.”
• “Calls, appointments, and closings will keep you from failing.”
• “Every time you meet with a prospect, a sale is made. You either sell the prospect on buying a policy, or the prospect sells you on not buying a policy.”

We were encouraged to buy a big house, a nice car, expensive suits, and “power” ties. The goal was to make us hungry to pay these bills. We all were on 100% commission and had to learn how to “eat what we kill.” Therefore, to be successful in sales, we had to develop a “killer” instinct to succeed or fail and lose everything.

The industry made it very clear, and it is still true today that the 10% to 20% who make it pay for the 80% to 90% who don’t. Selling on a 100% commission basis is a pass-fail job. Successful salespeople learned to be assertive, sometimes aggressive, and sometimes “abusive”.

The bottom line is that we were clear about who we were and what we did. We were sales professionals.

Since we were on commission, it was important to get going quickly to have some income coming in. It was profitable for the insurance company but a low-integrity endeavor for friends and family who trusted unconditionally. Why?

Many salespeople went through their prospect “hit” list and did as much business as possible. That’s why many made it through the first two years. Once they exhausted those closest to them, they had to enter the world of hunting for business. Many were ineffective and failed; by the fourth or fifth year, 80% of producers were gone.

The insurance companies and agency managers loved this. They “inherited” new customers and kept the renewal fees and new business for themselves.

The salespeople who didn’t make it lost, and those who trusted them the most lost. The clients went into an “orphan” program. The personal service these people hoped for was terminated. These files were assigned to new agents to “pick at” to generate new sales and commissions, not to service them.