Prospecting friends and family

32 replies [Last post]
wendy's picture
Offline
Joined: 2007-08-01

I've had some FAs tell me I need to prospect my friends and family.  I plan to follow the advice of the posters here and stay away from friends and family at least in the beginning.
Did any of you make it without going to friends and family first? 

troll's picture
Offline
Joined: 2004-11-29

Friends and family will disappoint you. I promise. People are weird when it comes to money. When you handle their money, you will see a side of them that you never knew existed.

anonymous's picture
Offline
Joined: 2005-09-29

Your F & F won't give you business because they know that you are new.  That being said, I would absolutely prospect them.
1) It's great practice
2) It's the best way to build a referral based business.  They will refer you to more people.  These referrals won't know that you are new in the business.  When people come to you via referral, it is easy to get referrals from them.  When you cold call, it is much harder to get referrals.
3) If you are not prospecting friends and family, someone else is.   Do it in a very professional manner.  If you prospect them, almost all will become clients in the future.  Don't prospect them and most will never become clients.
4)Having friends become clients lead to better friendships.
Personally, I would have failed if I didn't start with friends and family. 

bornagainbankr's picture
Offline
Joined: 2007-07-16

Sell them life insurance.  You have no risk of blowing up their portfolio, you get paid a decent commission and they probably need it.

anonymous's picture
Offline
Joined: 2005-09-29

Bornagain, I agree with you.  It's important to me that they become insurance clients and I don't care if they become investment clients.  I

Vin Diesel's picture
Offline
Joined: 2007-04-18

don't prospect friends & family until you've been in the business 3yrs. then they will come to you.
besides you need to learn how to build a business without f & f.

wendy's picture
Offline
Joined: 2007-08-01

I totally agree with Vin Diesel and Bobby Hull.  I guess I was feeling pressure from others to prospect F & F. 

bondo's picture
Offline
Joined: 2007-04-15

Most senior advisors in my office say not to.  One guy says he has never had a problem working with friends and family.  I have one associate who lost a good friend trying to prospect him.  Fortunately no one in my family has money so it is not an issue for me.

bornagainbankr's picture
Offline
Joined: 2007-07-16

Once you have been in the business long enough they will ebg you for advice.  For nowe realize you don't know much.  If you want to make some quick cash sell them some life insurance, they probably need it.

Closer's picture
Offline
Joined: 2007-02-26

That's funny. Insurance companies make you LIST your friends and family and basically require that you prospect them.Insurance companies suck.

anonymous's picture
Offline
Joined: 2005-09-29

Closer, insurance is different than investments.   If you don't rollover your friend's 401(k), you don't earn a commission.  If you don't sell your friend a necessary DI policy, your friend is screwed for life.
They make you list your friends and family because they want you to build a referral business.  Your success is not dependent on getting F&F as clients.  Your success is dependent on getting referrals.  Who's going to give you more referrals....F&F or people whom you cold call?
With an insurance company, an all referral business can be built almost instantly if you call on F&F.  This can't be done in a wirehouse.  What's the difference?  Your friends will know lots of people just starting out.  Many of these people will be very successful in the future.  However, today, they are making $60,000 and have virtually nothing invested.  These are not prospects in the wirehouse environment.  Therefore, you must cold call to find people with money now.  In the insurance environment, they are good prospects.  At the very least this person should be buying disability insurance, $1,000,000 + of covertable term insurance (or WL + term) and starting a Roth IRA.  You'll easily make $1000+ consistently with these types of clients while you are doing the right thing for them.  Their investment business will be easy once they have money.
Closer, insurance companies suck for you because you are failing.  If you can't make it there, you can't make it at a wirehouse.  Work your ass off every day and you'll be earning 6 figures in your second year while making a huge difference.

troll's picture
Offline
Joined: 2004-11-29

What do you get when you take the "C" out of "Closer"?

Maxstud's picture
Offline
Joined: 2005-12-29

Bobby Hull wrote:What do you get when you take the "C" out of "Closer"? Bobby Hull?Sorry, just to easy.

troll's picture
Offline
Joined: 2004-11-29

That made no sense.

troll's picture
Offline
Joined: 2004-11-29

 

pretzelhead's picture
Offline
Joined: 2007-03-23

I think Ferris was referring to MaxDud's weird comment.
 

Vin Diesel's picture
Offline
Joined: 2007-04-18

Bobby Hull wrote:What do you get when you take the "C" out of "Closer"?
that's funny!!!
 

troll's picture
Offline
Joined: 2004-11-29

pretzelhead wrote:
I think Ferris was referring to MaxDud's weird comment.
 

+1
joe is the slow one.

Closer's picture
Offline
Joined: 2007-02-26

Anonymous... get off insurance companies nuts.Ferris... get off Bobby Hull's nutsAll in all, the reason I feel so strongly may be because of my particular agency of my particular company. Why does single 24yo with no discretionary income need 1 million in term? That much insurance isn't cheap. If he dies, so what, nobody depends on him. Plus, you aren't locking in anything with term. Hmmm.

anonymous's picture
Offline
Joined: 2005-09-29

Closer,
I'm surprised that someone can show so much ignorance on a subject with such a short post.  Are you sure that you work for an insurance company.  This is basic stuff that you don't know.
Why does single 24yo with no discretionary income need 1 million in term?
You are correct that they can't buy term insurance with no discretionary income, but nobody mentioned $0 discretionary income.  You are correct that he doesn't need it.  He will need it in the future.  Insurability is extremely fragile.  Coverage must be purchased when one is healthy.  You'll understand when you have a friend die or simply talk to a 30 year old who really needs coverage, but can't get it because of a cancer history.  If someone is going to need coverage in the future, it must be purchased today.  
That much insurance isn't cheap.
The coverage is cheap.  He can get $1,000,000 for under $25/month.
Plus, you aren't locking in anything with term. Hmmm
Please tell me that you are joking with this comment.  He's locking in the fact that he will have the best rates for the rest of his life.  He's locking in the fact that he can convert to permanent insurance without answering any medical questions and have the best rates.  He's locking in the fact that when he dies, he is leaving behind a $1,000,000 legacy. 
Watch a family struggle because you didn't sell life insurance to your friend and you'll understand forever.
Again, if you can't make it at the insurance company, you have no chance at the wirehouse.  It may be time for a career change.

troll's picture
Offline
Joined: 2004-11-29

Hmmmm...$300/year for a guaranteed, cool million? Not too bad of a return. Sounds like someone must've taken the c out of closer.
 

troll's picture
Offline
Joined: 2004-11-29

Closer wrote:Anonymous... get off insurance companies nuts.Ferris... get off Bobby Hull's nutsAll in all, the reason I feel so strongly may be because of my particular agency of my particular company. Why does single 24yo with no discretionary income need 1 million in term? That much insurance isn't cheap. If he dies, so what, nobody depends on him. Plus, you aren't locking in anything with term. Hmmm.
C  Loser, do you really think you're fooling us by trying to masquerade your failure with your not believing in what you've been asked to do? We can sniff out failures a mile away.

Closer's picture
Offline
Joined: 2007-02-26

Again, if you can't make it at the insurance company, you have no chance at the wirehouse.  It may be time for a career change.I was doing fine selling annuities for my "mentor" until I realized that we were churning these old peoples money, switching them from annuity to annuity, and splitting big commissions. I wanted out immediately. It's not that I can't sell. I honest to God don't think buying a boatload of LI is good for the client, whether or not it's term and whole mixed.Granted, I am a rookie so I should listen to the vets. Does anyone agree with Anon and BH? Well BH is just trying to make jokes. Does anyone else agree with Anon?Even if LI is the greatest, I don't want to walk into people's homes and tell them stories about my neighbor who passed away early leaving his family with nothing. I'd rather nag the grocery store owner once a month for his 401k. I guess that's just me. Besides, I still have my Life and Health, I can still sell it.This is true for sure = you can offer SO MANY MORE SERVICES at a b/d, as opposed to a life insurance company. I got an offer from MS today, and have my fingers crossed for ML.

Closer's picture
Offline
Joined: 2007-02-26

wirehouse i meant, not b/d

deekay's picture
Offline
Joined: 2007-05-15

There's nothing wrong with going for 401k rollovers.  And although life insurance has a death benefit, LEAP shows a client how having WL as part of their overall retirement plan enhances their 401k, real estate, and other investments. 
The fact of the matter is, you can do all the same things investment wise at an insurance b/d that you can at a wire.  However, you won't get the comprehensive training on complex estate planning at a wire that you would at an insurance company. 
Finally, the reason I chose to work at an insurance company is because I want to work with business owners.  I knew I would be second-best in this market had I chosen to work with a wirehouse.  Sure, I could try to get in with a 401k, but I couldn't do succession planning as effectively.  And I can still prospect for 401ks at my firm.
You don't have to love life insurance.  However, I know that, by working at a wirehouse, the amount of people you can work with is limited.  They'll have to have a certain amount of investable assets.  I am only limited by working with people who love their families and are motivated to do good things for themselves financially.  For me it's a no-brainer.  Again, before you make a decision, I would urge you to sit with a senior agent who knows LEAP inside and out.  You won't regret it and it may change your mind about life insurance and financial planning in general.
Good luck.

Dust Bunny's picture
Offline
Joined: 2007-05-07

I was doing fine selling annuities for my "mentor" until I realized that we were churning these old peoples money, switching them from annuity to annuity, and splitting big commissions. I wanted out immediately.
I agree entirely with the churning old people into annuities (that is one of the main reasons I left my bank brokerage.... you could see the dorsal fin on the regional manager.  (dum dum dum dum..... dah daaahhh).    BUT, there is a big difference between churning and offering insurance products like Anon has said.  People need insurance and there can be a very good business to be made by good insurance planning.  From that insurance you can go into other investments. 
Don't give up on the basic tool just because you don't understand it.
I have to confess that I find life insurance very very hard to sell.  However when you do....it does pay off for you and your clients.
 

DJRoss's picture
Offline
Joined: 2007-06-22

I really don't understand why talking to families about the possibility of losing the breadwinner in the family to accident or disease, or having them stuck in a wheelchair the rest of the life unable to work is so hard.This is the reality of life. Every day hundreds of thousands of vehicles whizz by at breakneck speeds on the freeway, and every day there are pile ups that cause either fatalities or permanent disabilities. It is crazy not to have a LI and/or DI policy, given how cheap they really are even for those who are maybe older and haven't gotten around to it.I mean people are willing to spend three to four times more than that a month on cable TV so they can watch their favorite NFL team play.Seriously if you feel uncomfortable talking to people about the possibility of death go spend some time volunteering at a mortuary(TIC) or something. Get that feeling out of your system or it will crush your ability to stand behind what you are selling these people. Last I checked over 40% of the population lack life insurance, and over 50 million people that do have policies that are inadequate.  What an awesome opportunity to support yourself and family while providing something so vital to everyone.

anonymous's picture
Offline
Joined: 2005-09-29

No one is suggesting that you churn annuities.  Churning happens in all environments.  It happens when one needs more income and doesn't have a big enough pipeline and has low ethics.  
Churning annuities is really not selling.  It's getting someone to move money from one pocket to the other.  The same can be said for asset gathering.  Getting someone to move their money from ML to MS isn't really selling.  It is, but it's not the same as getting someone to buy something that they don't already have.  Insurance sales will teach you to become a great salesperson.
I honest to God don't think buying a boatload of LI is good for the client, whether or not it's term and whole mixed.
This is simply youth and inexperience talking.  You'd feel differently if you understood what premature death did to a family. 
Even if LI is the greatest, I don't want to walk into people's homes and tell them stories about my neighbor who passed away early leaving his family with nothing.
Nobody is suggesting using fear to sell.  Personally, I take a fact finder with everyone.  Most of the time is spent talking about somebody's wants.  "I want to retire at age 60 with $10,000/month of income."  "We would love to buy a vacation home." "We want Junior to go to the best college that he can." etc.  Sometimes the client tells me that they are worried about their life insurance.  Most of the time they don't. 
When they don't, I ask, "If you die today, do you still want your family to maintain their standard of living, your wife to retire at age 60, your family to have their vacation home and Junior to able to go to the best college?"  They say "yes" and we both know that there is a need for life insurance.  I then ask, "Let's assume that you are going to live to be 100, would you like to leave money behind at death to family and/or charity or would you like to spend your last penny?"  If they want to leave money behind, permanent insurance will be part of the conversation.
Term insurance is simply too inexpensive not to purchase.  Whole life insurance, once someone understands it, is even less expensive.  If it gets positioned properly in one's portfolio as a savings vehicle, it doesn't have a cost.  What I mean is that it is simply where someone is going to put their long term savings money.
This is true for sure = you can offer SO MANY MORE SERVICES at a b/d, as opposed to a life insurance company.
This is more inexperience talking.  There is almost nothing that you are going to do at a wirehouse that you couldn't do with the insurance B/D.  You'll just be doing it with a lower payout.
I'd rather nag the grocery store owner once a month for his 401k. Great.  Go do it.  This is something that you can very easily do in the insurance environment.  The differerence is that you'll get paid more.  When you then help that owner with his life and DI, you won't have to put it through the grid and you'll get overrides bringing your comp to 3-4x the wirehouse payout.  A girl who I work with just landed a big 401(k).  Her payout will be over $100,000/year.  She is just completing her 1st year in the business.
If you don't want to call F&F, don't.  Your manager wants you to do so because he thinks that gives you the best chance of success.  He's right.  If you'd rather cold call, go cold call.  Your manager won't care as long as you produce. 
The biggest reason why I am on the insurance company's nut, as you describe it, is because I have two goals.  1) Make a lot of money 2) Make a difference in the lives of my clients  With my clients, I can do this better with an insurance company. 
Use your grocery store owner as an example.  He has his 401(k) with MS.  You take a job with ML.  You convince him to move his 401(k) to you.  You make money.  He is not any better off than he was before he moved his 401(k).  Wirehouses are more of an "asset gathering" place.  If that's what you want to do, you can do it.  Even so, why not be an asset gatherer at an insurance company where your payout will be significantly higher?
If you can succeed where you are, you won't want to change.

troll's picture
Offline
Joined: 2004-11-29

Anon, that was a great post, but telling cLoser what to do to succeed is like telling a homeless person to "just get a house." Ain't gonna happen.

Slim2None's picture
Offline
Joined: 2006-04-14

Bobby Hull wrote:Friends and family will disappoint you. I promise.Your mother disappointed the world when she forgot to flush the toilet after you came out of her *ss.

troll's picture
Offline
Joined: 2004-11-29

Slim2None wrote: Bobby Hull wrote:Friends and family will disappoint you. I promise.Your mother disappointed the world when she forgot to flush the toilet after you came out of her *ss.
...which is NOT the reaction YOUR mom had when I came out of hers.

anonymous's picture
Offline
Joined: 2005-09-29

Wendy,
Since you are not willing to call friends and families and you are going to be moving every 2 years, I am very curious.  How do you expect to build your business?  I'm not trying to be a jerk.  I just don't understand how this can work.  It seems to me that being a waitress would be much more lucrative.

bluestars80's picture
Offline
Joined: 2007-07-12

Dust Bunny wrote:
I agree entirely with the churning old people into annuities (that is one of the main reasons I left my bank brokerage.... you could see the dorsal fin on the regional manager.  (dum dum dum dum..... dah daaahhh).    BUT, there is a big difference between churning and offering insurance products like Anon has said.  People need insurance and there can be a very good business to be made by good insurance planning.  From that insurance you can go into other investments. 
Don't give up on the basic tool just because you don't understand it.
I have to confess that I find life insurance very very hard to sell.  However when you do....it does pay off for you and your clients.
LI is an easy sell if something bad happened to their close friends or family member.  It's hard to sell if all their family members lived to 100 and/or nothing bad ever happened to them............
I would rank it as follows, easiest to hardest sales: (not including annuities)
1)Term life
2)DI
3)Universal/WL
4)LTC
Of course, it depends on your market...........

Please or Register to post comments.

Industry Newsletters
Investment Category Sponsor Links

 

Careers Category Sponsor Links

Sponsored Introduction Continue on to (or wait seconds) ×