By Michael
S. Fischer | July 09, 2020 at 02:15 PM
Most advisors and insurance agents are having difficulty
finding new clients and selling more to existing ones, LIMRA says.
Nine in 10 financial professionals in a survey
released Wednesday said that not being able to meet with their clients in
person because of social distancing guidelines has been the main effect of the
coronavirus pandemic.
Three in four of the advisors in the survey, which
focused mainly on insurance professionals, said they had been making more of
their sales, or all their sales, to existing clients.
The survey was conducted in May among some 400
financial professionals in distribution, sellers of insurance, annuities and
investment products, by LIMRA, the Insured Retirement Institute, Oliver Wyman
and the National Association of Insurance and Financial advisors.
“For many advisors the human connection is a critical
part of developing a trusted relationship with clients,” David
Levenson, president and chief executive officer, LIMRA, LOMA and LL
Global, said in a statement. “According to our research, nearly two-thirds of
advisors are now working from home creating new challenges in the
advisor-client relationship.”
Levenson noted that carriers and the industry had
helped advisors continue to drive successful client outcomes through customized
training and digital tools designed to help them operate optimally in the
virtual environment.
The vast majority of advisors in the survey said they
had received robust training and expanded communications about best practices
for working remotely and leveraging technology.
But what they most valued was the carriers’ and
professional associations’ advocacy efforts to change or reduce compliance
requirements and enable them to submit business digitally rather than via
paper.
Seven in 10 advisors reported that they had increased
their communications with clients as the pandemic took hold and social
distancing measures came into effect.
Not surprisingly, they said their clients’ top
concerns were stock market volatility, cited by 74% of advisors, and low
interest rates, noted by 45% of advisors.
Clients were also concerned about job and income
security, current and future income stability, and life insurance coverage
issues, including whether their policies would cover COVID-19. (The study noted
that life insurance policies in good standing would cover COVID-19-related
deaths.)
Pandemic Shifts Business Activity
Seventy-eight percent of advisors said they were
selling more to their existing clients, including 24% who were selling
exclusively to their existing clients. Twenty-two percent reported that they
were selling more financial solutions to new clients.
(Chart: LIMRA)
Most advisors surveyed said social distancing had made
it harder to find new clients and conduct initial planning activities with
them. Advisors said they would value more help with virtual prospecting and lead
generation.
“It is not surprising that social distancing measures
have impeded advisors’ ability to gain new clients,” said Scott Campion, a
partner at Oliver Wyman, said in the statement. “Especially since we don’t know
when or how business will return to normal, the industry needs to identify ways
to help advisors virtually connect with consumers who need the solutions to
achieve their financial goals.”
Challenges notwithstanding, eight in 10 advisors
surveyed expressed optimism about their ability to maintain their practices and
serve existing clients. While many expected investment and annuity sales to
fall less than 10% in the second quarter, compared with pre-pandemic
expectations/forecasts, they expected sales of life insurance to remain level.
“While traditionally, our industry has relied on the
face-to-face model to help Americans address their financial concerns, the
silver lining in all this is we are seeing advisors adapting and leveraging
digital platforms to stay engaged with their clients,” Kevin Mayeux,
chief executive officer of NAIFA, said in the statement.
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