Low-interest rates, consolidation and the internet have all taken aim at investments and insurance in the past few years, but what might be hurting the financial industry’s future is short-term thinking, said Joe Dickstein, retired vice-chairman of PPI.In contrast, some companies in the United States have taken a broader view of the future and are looking forward to where tomorrow’s prospects will best develop. Take Northwestern Mutual, a major mutual fund company, whose new strategic plan last year outlined that it would be approaching 20-to-30-year-olds now on the premise they will be successful prospects 20 or 30 years from now, said Mr. Dickstein.
“In Canada, we go from one quarter to the next and [in the U.S.], they’re thinking 20 years ahead. We have to get much more long-term thinking.”
Mr. Dickstein’s comments came as he was honoured during a gala luncheon at the inaugural meeting of the Canada Sales Congress in Toronto in May. Three scholarships were named in Dickstein’s honour – one sponsored by For Advisors Only for a student enrolled in the Seneca College Financial Services Practitioner program, and next year, PPI will sponsor two other scholarships for students enrolled in Canadian financial services courses who intend to work in the insurance industry.
With industry mergers and only two insurance companies having agency forces, Mr. Dickstein said some of the insurers have become manufacturers only. And, when there is a problem, a client will not call the manufacturer’s 1-800 number, but rather the insurance advisor. And there’s a reason for that, he said.
“As long as we can maintain our relationships with the clients, I think we’ve got it made. No matter what the companies do at the top level back and forth, whatever [financial] results come out, it’s our relationship with the client that is the basis for the whole industry.”
He acknowledged that today’s clients often go online to read up about an insurance product or service they’ve heard about. But he said information about a product is only part of the role of an insurance advisor.
“[Clients] need us for our judgment, our experience and our reputation. Most clients would rather play golf than study three or four hours a week about financial planning and insurance. So we are more important than we ever were to the clients.”
Advisors today need to get away from product selling and more into consulting so they can help clients buy the product that is right for them, he said. This doesn’t mean advisors won’t sell any products, it’s just that the process has changed.
“When I started many years ago, we were trained to trick your way in, answer all the objections and make a hard sell close. But that’s not the way people are looking to buy today. [Today] we need to work with our clients through a consultative process.”