AssetMark: How to Make Your Insurance Business Grow with Financial Advising

(AssetMark) You’ve always known that it was an option—only it feels like a huge leap. But if you’re struggling to find out how to make your insurance business grow, incorporating financial advisory services could be an effective means of attracting new clients and keeping them for longer. 

Insurance professionals might feel like financial advising is entirely out of their wheelhouse, but that may not be the case. Both insurance and financial advising are focused on enabling financial wellbeing. Where insurance enables financial wellbeing by mitigating risk, financial advising proactively seeks out ways to achieve that wellbeing. 

Incorporating financial advising into your insurance business may be a natural fit, and it doesn’t have to be intimidating. Let’s find out why and how.

Why Financial Advising

Broaden Your Market

Finding out how to make your insurance business grow can feel like trial and error sometimes. You might see some results from traditional marketing efforts, but too often these efforts may yield a small bump in new clients that quickly fades. The reason?

You’ve limited yourself to the same audience as every other insurance business.

Not only is the competition fierce in this space, but you’ll often be speaking to people who already want to buy insurance and are just deciding who to buy it from. Instead, insurance professionals can attract and nurture a whole new client segment by offering financial advising services.

You have the opportunity to attract new clients with your financial advising services and then educate those clients on the benefits of your insurance products. Once one of your clients decides they need insurance, they’ll come straight to you.

Add a New Revenue Stream

Diverse revenue streams are always going to be a boon to your business. If market events reduce the demand for your insurance products, you’ll always have your financial advising line of business to help you through the lean times. 

And, by adding this new revenue stream, you’ll also increase your business valuation in the event of an acquisition in your future.

Make Your Services Stickier 

Often, buying insurance is a one-and-done sort of transaction. Clients just don’t think about their insurance agent all that often. Without a personal connection to their insurance professional, it’s relatively easy for clients to cancel their insurance if they find a better deal or re-assess their financial priorities.

Financial advising, however, often involves regular reviews with clients, typically once a quarter or so, which gives advisors the opportunity to grow incredibly close with their clients. Some advisors are deeply involved in their clients’ lives, even providing financial advice to entire families.

By offering financial advising services to your clients, you’ll be meeting with them on a more regular cadence and building a relationship that makes your services significantly stickier. What’s more, a client might even forego switching to a lower-cost competitor simply because it’s easier to have all of their financial needs met by the same professional.

Provide an In-Demand Service

As if the above reasons weren’t enough, there’s also a huge demand for financial advisors that provide insurance services:

  • 83 percent of clients expect to receive long-term care insurance advice, but only 14 percent do.
  • 82 percent of clients expect to receive life insurance advice, but only 12 percent do.
  • 72 percent of clients expect to receive property and casualty insurance advice, but only 2 percent do.
  • 65 percent of clients expect to receive health insurance advice, but only 4 percent do.

As an insurance professional, you’ll enter the financial advising space with a leg up. There aren’t enough financial advisors offering insurance advice in the market, so your knowledge will be highly attractive to clients.

Key Steps to Adding Financial Advisory Services to Your Insurance Business

Get Licensed

Depending on what jurisdiction you operate in, you may need to pass several licensing exams. Selling insurance generally requires a Series 6 license, which permits the sale of packaged securities, such as mutual funds and variable annuities.

However, to become a financial advisor you may also need to obtain a:

  • A Series 7 license, which permits you to sell most investment products, including stocks, bonds, options, and futures.
  • A Series 63 license, which is required for financial advisors operating out of all jurisdictions except for Colorado, District of Columbia, Florida, Louisiana, Maryland, Ohio, and Puerto Rico.
  • A Series 65 license, which some states require for fee-based financial advisors.
  • A Series 66 license, which is like the Series 65, but is only available for advisors that have also completed the Series 7.

Get Educated

You’ll need a modicum of knowledge if you’re going to pass your licensing exams, of course. But the practical, boots-on-the-ground reality of financial advising isn’t something you become familiar with just by passing a few tests.

How do you set a fee schedule? What services should you offer? What does it really mean to be a fiduciary? What should your client communication strategy look like?

Fortunately, there are ways to learn the answers to questions like these.

Seek out experts, read books and articles (like the one you're reading now!), and identify and consume resources that will provide you with a practical sense of what kind of work you’ll be doing and how to do it well. Not only will this step help you become a better advisor, it’ll also help you identify the areas that you’ll need support in, and, as a result, how to grow your insurance business with financial advising.

Tell a Story

To gain both your existing clients’ and new clients’ interest, you’ll need to determine the best way to speak about your business. Think deeply about the kind of clients you currently have and the kind that you want to acquire. 

  • Do they tend to have multiple financial service providers? Consider presenting yourself as a way for them to streamline their financial life and consolidate.
  • Do your clients tend to have families? Maybe the story of your business is about protecting the financial wellbeing of their family through insurance and financial planning.
  • Are your clients high-net-worth individuals or do they usually have fewer assets? Emphasize different aspects of your combined insurance/financial advising business depending on where your clients land on this spectrum.
    Your business positioning should flow from your understanding of your client base and why they work with you. Once you have this understanding, it’ll be easier to tell the story of your business through mission and vision statements, a value proposition, and your brand messaging.

Build Efficient Processes Early

Before deciding to add financial advisory services to your insurance business, spend some time thinking about the new processes you’ll need to adopt.

Once you’ve defined a given business process, it can be hard to change it after the fact. You’ll have to attend to new responsibilities and your growing business needs, leaving little time to evaluate, redesign, and relearn a process. Thus, it’s critical that you invest time early on toward strategizing around how you’ll go about delivering your new services. Doing so raises the odds of smooth operations and a positive client experience.

Start with Light-Lift, High-Impact Services

Remember: Your goal is to find out how to grow your insurance business, not reinvent the wheel. You don’t have to become an expert in the entire spectrum of financial advising services. You don’t even have to call yourself a financial advisor.

But if you want to grow your insurance business, you will want to incorporate the most in-demand financial advising services.

That doesn’t mean you need to learn how to provide estate services, manage investments, advise on tax contributions, consult on business succession, and the many other services that financial advisors provide. Instead, just focus on those services that are in the greatest demand and which will be the simplest for you to provide. 

Our recommendation is financial planning

By looking at the data on what services clients expect and what they receive from financial advisors, we can see that financial planning is a core service. Clients expect to receive financial planning services 96 percent of the time, and they receive it 70 percent of the time.

Because it is so central to financial advising, a considerable number of tools and resources exist to support it. Solutions like eWealthManager and MoneyGuide simplify financial planning workflows. TAMPs, or third-party asset management platforms, can support the execution of the more technical elements of a financial plan (such as investment management). 

With the wealth of support out there, insurance professionals can offer this in-demand service without worrying too much about being out of their depth.

The Bottom Line? It’s Not as Scary as You Might Think 

Figuring out how to grow your insurance business through financial advising doesn’t have to be a challenge. In fact, with the wealth of resources available to insurance professionals looking to incorporate these services, it can actually be a quite natural transition.

The AssetMark team has worked directly with many insurance professionals to help them take their first steps along the journey to offering more comprehensive wealth management services. When you’ve supported this transition as much as we have, you learn a few lessons—lessons that we’ve gathered in our guide, Beyond Insurance: Adding Wealth Management to Your Service OfferingIf you’re thinking about offering financing advising services at your insurance business, we highly recommend it.


More Articles