We can look to Canada where we have already helped GAs to identify, value, and buy producers’ blocks of business proactively to take ownership of the client relationship and the inforce policy. That process allows independent distribution to remain deeply relevant as agents retire – in fact, to become even more relevant as the current sales force retires rather than less relevant.
So given the requirement that we focus on marrying retail and wholesale, the question becomes who services those blocks while developing new business? Well, the existing business that you buy has inherent new business potential. There are immediate revenue opportunities such as conversions, 1035s, GPOs, upselling, cross selling, and new needs, which allows your agents learn on the job by talking intelligently about existing products. We do need to recruit and hire agents – and that means W2s, not 1099s – then train them as efficiently as possible to service the blocks that we have, thereby creating the revenue and margin necessary to further recruit.
As our agents begin to focus deeply on developing those relationships to drive openings to the connections and families of the existing customers – both through old fashioned referrals and through modern technology, we start to see how “independent” can remain that way.
The future of the independent agency is bright – in fact, the future is one that we shape. It requires a series of tough decisions including capital outlay by acquiring meaningful assets – blocks of business – and new responsibilities – monitoring policies and hiring agents internally. As a twenty four year old I believe I’ve been lucky enough to see this strategic inflection point take shape and I firmly believe that technology, along with demographics, will continue to shape the industry along these lines.
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