The world has changed a lot, life insurance advisors… not so much. And their numbers are dwindling; some estimates point to a 25% decline in the population. Not on the brink of extinction for sure, but a little disconcerting.
What does that mean for the future?
Virtually every industry meeting I attend, the insurance company bemoans the lack of new advisors coming into the life insurance business.
In Canada there are some 80,000 advisors who are selling life insurance and the average age of those advisors is about 60. There haven’t been many young advisors coming into the business and some 30,000 of our existing advisors will be retiring over the next few years.
Further adding to the equation is the lack of real education in the industry. The older advisors rely on the past, the products they know and the training they once had. New advisors struggle to find avenues that address in-depth product education and the technical aspects of Life Insurance.
One more twist in the industry is being led by the new younger client. They are expecting to have more independent access to information and less reliance solely on an advisor. Clients often have access to the same product information as the advisors and they are looking for something more from an intermediary.
The insurance industry is undergoing significant changes to address the new realities.
How does all of that affect a consumer today and tomorrow?
This new consumer will have an increasing availability of information. They can research on their own, but they’ll really need help understanding the information. There will be an increasing demand for technical advice.
Insurance contracts are extremely complicated. This new consumer will need to find a resource that will investigate and interpret very detailed product information… a process quite removed from the sales environment we currently rely on to supply Life Insurance products.
The consumer of the future will have to change the mindset. Right now Life Insurance is a product ‘sold’ to the marketplace. A shift will have to happen that reframes the attitude around Life Insurance, its purpose, and the opportunities. People will have to start with the desire to own a policy to fulfill a piece of their financial portfolio and then actively seek out the suitable product. This consumer will lose out if they’re waiting for an advisor to knock on their door.
I am concerned with the future. The lack of financial literacy in our advisors and the average consumer is going to greatly impact the outcome for families and estates down the road. Misinformation, errors, overwhelming details and the human tendency to procrastinate will all I’m afraid, leave the next generation sadly under insured or owners of ineffective life insurance policies. The fallout from that will be evident only as time passes and the wisdom reassessed.