By Wayne D. Minich
In the early 1970s, life insurance companies were attempting to enter the financial planning realm.
I first gained about nine months’ experience in the financial planning business working for a former football coach who had started a small company trying to do financial planning for teachers.
Even though it was serendipitous, I found that I really enjoyed the work and what I had learned.
Because I already knew that life insurance companies were also beginning to get involved in financial planning, after the demise of my coach’s company, I affiliated my fledgling financial planning practice with a major life insurance company. After 11 years I came to desire more independence and the ability to expand in new directions.
Thus, I incorporated my business and made the career move which gave me the independence and control I was seeking. Any advisor can gain the same advantages by going independent themselves. By charting one’s own course, advisors have the ability to shape their businesses to fit their own vision, not that of a large company.
My feeling and philosophy is that independent advisors have a leg up on their counterparts who work for larger firms or insurance brokers.
When advisors work for themselves, they can avoid the perception that their loyalty belongs to a larger insurance or investment provider, rather than to their clients. In an era of distrust, cultivating positive client perceptions is more important than ever.
My personal independence as an advisor has allowed me to institute the Golden Rule and the CLU Creed as the overarching philosophy behind my practice’s work with clients – treat others as you wish to be treated, and if you wouldn’t do it for yourself or your family, don’t make that recommendation for a client.
Emotional, and even moral, connections with clients will only become increasingly important as time goes on, and advisors who have more flexibility to meet that need may perform better.
Enhanced Career Control
On top of the power to shape client work, independent advisors control their internal business models and can make innovative decisions which may not be available to those employed at bigger firms.
Such decisions can include changes to employee training and compensation. For instance, to become a financial advisor, I believe one must first be taught what advising actually means, pick up the needed skills and, ultimately, how to provide financial advice – all before they have direct interaction with clients.
I also disagree with the “eat what you kill” philosophy. Our clients are clients of the company, not of any particular individual. The revenue we generate comes into our firm to pay business expenses, including salaries and bonuses.
Profits are retained within the organization for operating capital to assist in managing expenses. To reinforce these ideas, our new associates begin on fixed salaries, with only backstage responsibilities to keep their focus on learning processes and gaining the ability and experience to be competent, team-oriented advisors.
Proven growth in their skills leads to growth in income, additional responsibilities and perhaps, if they have the interest, a shift toward the front stage, which will often include a change in their compensation structure.
This compensation model in no way resembles the common, commissions-based system used by many firms, and it would not have been available to me had I not become independent.
April 19, 2020, marks my 49th anniversary of providing financial advice and guidance for our clientele. In that time, my independent status has empowered me to make many of the decisions that helped my firm grow and provide quality service.
This path is not for everyone. However, any advisor who becomes independent has a chance to reap those same rewards. For those who may be considering seeking a different next stage of their careers, striking out on their own may afford them the opportunity to achieve success on their own terms.
About The Author
Wayne D. Minich, CLU®, ChFC®, is the president of Applied Financial Concepts, Inc., and a 44-year member of MDRT with 15 Court of the Table and nine Top of the Table qualifications. He has provided financial advice for his firm’s clientele since 1971 and is passionate about helping others the way he would want to be helped. In his spare time, Wayne enjoys downhill skiing, golfing, hunting, fishing, shooting sporting clays and spending time with his family. He lives in Richfield, Ohio. By joining and engaging with industry peers via associations like MDRT, you can keep your skills at the top of their game.