Empower independent producers by aligning interests, expanding opportunities, and returning value
by Bob CarterMr. Carter created one of the industry’s earliest agent-owned producer groups. He co-founded Partners Financial in 1987, and in 1999 was one of the three founders of National Financial Partners, which went public on the New York Stock Exchange in 2003. In 2010, Bob founded Lion Street and now serves as CEO and as a board member. He has also served as a Finseca (formerly AALU) board member and president.
Over the years, a number of producer groups have emerged as leaders in the marketplace, and the most successful ones share the following characteristics.
World-Class Resources Grow Firms
Producer groups that assemble sophisticated resources in the form of industry-renowned experts are always the most successful. This comes in many forms: dedicated business consultants, advanced sales expertise, unparalleled underwriting capabilities, cutting-edge technology, and marketing support. All producers have equal access to resources, which multiplies revenue and amplifies scale across all firms.
Ownership Is Essential To Sustainability And Success
Elite producer groups have a broad base of producer-centric ownership. When equity ownership is diversified — not concentrated — it becomes as valuable as any other type of financial professional affiliation. In addition, a transparent, flexible approach is taken with ownership structures, allowing firms to meet their independent needs while benefiting from the collective.
Equity is returned to owners on a consistent and exponential basis. Stock has real value with a proven history of growth and liquidity. Stock prices go up because of the production of firms and equity should be rewarded to those who created the value. This approach aligns shareholder interests in a meaningful way — unlike transactions we have seen at firms like Cetera, Advisor Group, and Kestra where only management participates.
Producer-majority representation at the highest levels of leadership, including a producer group’s Board of Directors, is paramount. This type of producer-centric structure ensures that producers own the producer group — not the other way around. Producer groups should exist to support the broad range of clients that are served by its network. The most effective board leadership has a deep understanding of the constituents it represents and maintains an open dialogue, even if opinions differ.
Carrier Access And Product Choice Are Unrestricted
Sophisticated consumers understand that proprietary products have certain limitations. Market factors simply do not support this approach anymore. Even the largest and most influential investment management companies, like Merrill Lynch, have moved away from proprietary products. Further, leading producer groups complement an open architecture approach with direct, top-level access to carriers — creating unlimited possibilities. The strongest producer groups form mutually beneficial alliances with carriers and wield their collective muscle in constructive ways that push the industry forward.
Market Expansion Opportunities Are Opened By A Proven, Multifaceted Approach
New ideas generated in these moments of structured collaboration can be the lifeblood to propel a life insurance practice forward. Producers must expose their practices to new inputs and new situations and challenge themselves to push new ideas further — ultimately putting them into action. When partnered with the right producer group, this type of ideation can be a major difference maker for a firm.
- Adding Producers—More often than not, the strongest life insurance firms have multiple producers selling products and contributing to the bottom line. The best producer groups leverage their expansive networks to help firms recruit, grow, and retain quality producer talent. Having multi-disciplined producers with varying specialties leads to exponential revenue growth.
- Adding Products—Life insurance producers should not be limited in terms of the products they have available to sell. Elite producer groups create favorable outcomes for clients through deep product expertise spanning individual and corporate life products. This creates solutions for wealth transfer and estate planning, retirement accumulation and income strategies, charitable giving, annuities, specialty markets, and more.
- Adding Markets—As life insurance and wealth management become increasingly interdependent, producer groups with an integrated wealth management platform have a competitive advantage. The industry’s top broker-dealers and RIAs create alignment for their network by providing seamless access to new markets that otherwise wouldn’t be available.
Culture Is A Priority
As successful life insurance producers “mature out” of the career system, they find it’s lonely and often work in isolation. When they join a network with a producer-centric culture that celebrates success, spends quality time together, and gives back to the community, they become part of a business family. A culture that blends sophistication, drive, and camaraderie is a hallmark of the industry’s most outstanding producer groups.
When life insurance producers are brought together through ownership and a shared interest in the growth and profitability of peer firms, a real difference can be felt. Forming these tight bonds and doing things the right way builds a tangible culture that producers can carry with them for the rest of their careers.
Collaboration Between Firms Fuels Success
It’s imperative that producer groups go beyond just encouraging collaboration amongst its network of firms. They must create open avenues to facilitate unfettered idea sharing — and support systems to execute upon these ideas. This mindset organically grows firms and is often managed through study groups, specialty conferences, and even formal business partnerships.