Alliance Financial Group has a track record of being ahead of the game. In the face of looming large-scale industry retirements as the baby boomers enter their 60s, this Toronto-based managing general agent has come up with an innovative recruitment scheme.“We’re early adapters,” said Michael Lecky, Alliance Financial’s 58-year-old founder and chief executive who competed as a cyclist for Jamaica in the 1972 Summer Olympic Games.
The ability to adapt early to situations involves a sense of prescience, and Mr. Lecky has long displayed a knack for divining the significance of emerging trends. In 1982 when he founded Alliance Financial as a general agent for Empire Life Insurance Co., the MGA system had not yet been established in Canada; he was following the U.S. model of general agents that represented a single insurer.
“We started recruiting and, six months later, we had about 30 agents,” he said.
By 1990, he was running Empire Life’s largest general agent with about 50 agents. And, when the industry changed its rules in the mid-1990s about single company representation, allowing agents to contract with many insurers, Alliance Financial was primed to make the transition to an MGA.
Today, it works with about 80 agents, most of them in Ontario. But, for the past year, it has been developing an ambitious expansion plan that will see its business more than double in size. In May 2010, Mr. Lecky hired Hal Lumley, who he met back in 1989 when Mr. Lumley was a regional manager at Empire Life, to attract and train a large number of new recruits to the company. Over the past year of finetuning the program, they’ve added 12 new agents to the Alliance Financial roster. But now that it’s up and running, they hope to add a whopping 80 to 100 agents by the end of 2011, and establish Alliance Financial’s presence across Canada in the next 18 months.
“We’re looking for individuals between the ages of 25 and 55, who are either just coming out of university or college and have entrepreneurial tendencies, or people who have run a successful business and are seeking a career change,” Mr. Lecky said. “They have to be interested in starting their own businesses. They’ll be independent agents under our banner and using our systems – a typical franchise arrangement.”
The recruitment and training program currently has an annual budget of about $200,000. But even so, how will they find and integrate 80 to 100 qualified, entrepreneurial individuals in a matter of months?
The first step is putting out the word, and one way Mr. Lumley is doing this is through centres of influence: career counsellors, human resources directors who may be retrenching sales forces and community colleges looking for career opportunities for their graduates.
Alliance Financial has also purchased a computer program that streams individuals looking for sales and marketing jobs from popular Internet job-search sites. “We start by calling potential candidates on the telephone to gauge their interest, and then we invite some of them into the office for a structured interview by committee,” said Mr. Lecky.
The selection process then involves a one-hour personal orientation profile test to evaluate aptitude, leadership style and ability to take direction. “We try to figure out the strengths and weaknesses of candidates,” Mr. Lecky said, “and whether they match our personal profile.”
Candidates then go through more interviews and carry out a series of projects. One of these is conducting a market survey. “They ask friends and acquaintances a number of questions such as ‘What role does life insurance play in your life?’ This gets them used to contacting people and helps them understand the basics of prospecting,” Mr. Lecky said.
Those who make it through the screening process will need to pay their own way to train for their life licences, either at Toronto-based Seneca College of Applied Arts and Technology, which has a one-week, in-class fast-track program, or through Edmonton-based Business Career College, which offers a 90-hour online program.
Contracts are only offered to new agents after they’ve obtained their life licences. And about half these new agents, those who show a commitment to the industry, will be put on an income-stabilization program for a period of time. They’ll receive small incomes to meet their expenses while starting their businesses.
And for the first three-and-a-half months of their careers, the newly minted agents will take part in 90-minute daily training sessions to develop what Mr. Lumley calls “the art” of business – prospecting and sales skills. “We teach them what to say, and we videotape them in sales presentations,” Mr. Lumley said. “And after the daily sessions, I go out into the field with them and sit in on their interviews with prospective clients.”
One important lesson he teaches is building referrals from centres of influence. “If done properly, the agent should be able to assemble a list of professionals custom-tailored to his or her geographical region or target market,” he noted.
New agents will also benefit from Alliance Financial’s 310-TERM.com website that helps consumers shop the market for term life coverage in Canada, providing up-to-date quotes and comparison. Another example of the MGA’s early adaptability, the site was established back in 2004, but the idea wasn’t to bypass its agents and go directly to consumers. “It’s intended to find leads for our agents in various markets across Canada,” Mr. Lecky said. “We’re looking for consumers between the ages of 18 and 45 who are comfortable shopping online. These people will be the future of the insurance industry.”
Alliance Financial will re-launch 310-TERM in the next few months on Facebook, YouTube and Twitter.
New agents can also benefit from the company’s succession planning program that pairs seasoned agents with newcomers who share a similar business style, with the intention of eventually transferring the book of business to the second generation. The older agent gets a percentage of commissions that the newcomer generates from sales to his own established clients. “We’re also starting to move into this program with independent agents outside our firm, some of whom include the old career agents who never joined an MGA,” Mr. Lumley said.
The succession planning process can be further enhanced by use of Financial Life Coach client-profiling software. “One of the biggest blocks to successful succession planning,” said Mr. Lumley, who created the software program, “is concerns that new agents will replace old business without client profiling or needs analysis. This model has 385 individually weighted variables. Seasoned advisors have told me it’s better equipped to make decisions than they are.”