2008 Annual Meeting
April 16-18, 2008
Baltimore's Inner Harbor

Future Trends Affecting Our Industry presented by Jeff Hughes, CEO, GAMA International

Summary of the “business valuation” approach to business sales, presented by Brad Davidson

Review of Your Circle of Wealth By Don Blanton, CLU, ChFC, LUTC

---

Jeff Hughes, GAMA CEO

Jeff Hughes has served as GAMA International’s CEO since July 2005. His 15-year financial services career began at Prudential Financial as a property and casualty marketing specialist in Cambridge, MA. He later became Manager of National Marketing of Property and Casualty for what was then known as Prudential’s Ordinary Agencies. Working on several strategic assignments during the company’s reorganization, Jeff helped to blueprint the company’s Minneapolis-based customer call center and designed a full-service storefront financial services center. In 1995, Jeff was named the Director of Training and Development to supervise the development and implementation for learning for field management and sales force development.

Jeff’s career experiences led to his appointment as Vice President of Field Development at MetLife, where he developed and implemented field leadership and learning development for the company’s field force. Later at American International Group, Inc. (AIG), Jeff led the organizational development and client-services process development for AIG’s Private Client Group. Most recently, Jeff served as Learning Officer of Distribution Marketing for the former MONY Group, where he revitalized the field-management and learning-development capabilities of that organization prior to its acquisition by AXA Financial.

Jeff currently resides in Northern Virginia with his wife Tara. He has a daughter, Meagan, and a Jack Russell terrier, Maggie. He is a graduate of Syracuse University’s School of Management and took graduate courses in Management at Cornell University.

Future Trends Affecting Our Industry
Jeff Hughes
CEO, GAMA International

One of the things our industry is well-known for is proactivity.  We work hard today and look ahead for what’s coming up next year and next decade.  Jeff Hughes, CEO, GAMA, helped us do just that in his presentation at the 2008 NAFDA meeting in Baltimore.

The Future for Managers

Among our future trends, Hughes pointed out, are the generational differences and the emerging new generations, which can lead to changes in how managers manage: 

1. The Baby Boomers are retiring on one hand, exploring alternate careers on the other.  They tend to be highly skilled and experienced and value being mentors.  They see feedback as, “Uh oh, what did I do wrong?”

 

1. The Generation Xers are more self-focused and pragmatic.  Their dominant profile is Type A, as they move aggressively into the spots being vacated by the Boomer generation.  They require transparency and appreciate pragmatic leadership. 

1. The Millenials (under age 29, sometimes referred to as Generation Y) tend to be trusting and group-oriented, but also very independent.  They are also community focused and fairly altruistic.  They are also big on multi-tasking (computer surfing, texting, listening to an Ipod all at once), and demand continuous, online communication and feedback.   

 

This means that managers will have even less control than they have now.  They will become coaches rather than managers for their producers. 

The Future for Producers

In the industry overall, we will see increased movement toward market convergence, with more and more emphasis on full-service financial planning.  Banks will become major competitors.  This means advisors will need to be better educated and more versatile.  And the trend toward increased service and relationship selling will continue.

As a result, the trend toward continuing education will continue, as greater and greater skills and knowledge will be required to compete.  Producers will also have to devote more marketing time to brand and image building, a task that, up to now, has been the job of the home office.  They will do this through individual producer websites and other new-tech marketing tools.

The bottom line:  Change will continue, as competition heats up and skill needs increase.

                        -- John R. Ingrisano, CLU
                           Co-Chair NAFDA Communications Committee   
                            President, Custom Communications Insurance Publishing
                            204 Lakeview Drive
                            Algoma, WI  54201
                            (920) 559-3722
                            john@jringrisano.com
                            www.jringrisano.com

 

---

Brad Davidson, SPARDATA

Brad Davidson is president of Securities Pricing And Research, Inc. ("SPARDATA"). Since 1991, SPARDATA has valued over 27,000 privately-owned businesses at the request of owners, advisors (including financial advisors, trust officers, CPAs and attorneys) and government institutions. Financial service providers that have chosen SPARDATA to provide valuation services to their clients include National City Bank, MassMutual, New York Life, and PNC Bank.

Mr. Davidson is a recognized expert in the valuations field. Organizations which have invited him to speak include the Internal Revenue Service, The Securities and Exchange Commission, Federal Reserve and the Michigan Bankers Association to name a few. Brad's presentation is entitled "Key Ingredients for Sales Success with Small Business Owners." For more information on SPARDATA, go to www.spardata.com.

LEARN MORE ABOUT BRAD DAVIDSON

The “Business Valuation” Method to Success in the Business Owner Marketplace

By Brad Davidson
President, SPARDATA
www.spardata.com

Addressing the NAFDA membership at the annual meeting in Baltimore in April, Brad  Davidson presented how to generate business owner sales by a “business valuation” approach. 

He began by reviewing why the small business owner market is so attractive to sales professionals like ours, pointing out that 64% of American millionaires own (or did own) a small business.

According to Mr. Davidson, “the action is not on Wall Street; the action is on Main Street”! He then went on to further quantify the opportunities, pointing out that the biggest challenge for producers is finding a way to differentiate him or herself from all the others attempting to approach this market.

Mr. Davidson’s “Eight Key Ingredients” of a successful solution to this problem were identified.  For a solution to work, he pointed out, it must be…

1. In the business owner’s best interest
2. Simple to learn and use
3. Likely to lead to a large insurance sale
4. Easy to measure
5. Able to position the producer as a ‘problem solver’
6. Able to shorten the sales cycle
7. Able to expose the ‘tire kickers’ early on
8. Provide an attractive commission

The concept that meets all eight requirements is to recognize that the business owner has a valuation issue. Mr. Davidson suggests that the producer who raises this issue is now on the road to a life insurance sale! All it takes is asking three short questions:

• How much is your business worth?
• Where did that figure come from?
• Do you have it in writing?

According to Mr. Davidson, any answer other than having had the business evaluated by a qualified appraiser renders the number bogus. He reminded the group as well that book value has nothing to do with fair market value.

The formula for success is fairly simple for the producer. After asking the three questions of the business owner and garnering acknowledgement that s(he) really doesn’t know the value, the agent offers to introduce the business owner to a qualified appraisal partner. The agent then makes the initial call to the appraisal firm to better qualify the business as appropriate for the process. The owner engages in a free consultation with the appraisal firm, then signs a contract and the appraisal process begins.

The producer is by the prospective business owner client as a problem solver who is helping to quarterback for the business owner’s best interest. The producer proceeds with working out the product sale in an appropriate fashion. Everyone wins!

 

 

---

Your Circle of Wealth

By Don Blanton, CLU, ChFC, LUTC
President, Money Trax
www.moneytrax.com

As a former producer, Don Blanton feels he has a handle on how to best prepare agents for the job of selling. His contention is that if you have something worthwhile to present, it will not be a problem getting people to listen to you.

Don believes that the agent's biggest problem is not prospecting--but weak communication skills in the sales process. "If you have something to say, people will line up to hear it," he stresses.

He says that at one time there were a few companies offering training on sales and, unfortunately, today there are even fewer.

Blanton feels that systems are important. His company has developed a sales training system which he contends sells huge amounts of life insurance for its users.

The key to his 'Circle of Wealth' talk is that it is designed to get the client fully engaged in the conversation. He equated the system to a golfer and a swing asking us whether we would rather have, Tiger Woods' driver or his swing. When all of us agreed that the swing would be more important, Don said, "Consider the club to be the products you have to offer which are similar to those of your competition. However, the swing is the process which helps you become more efficient."

He says that people move in the direction of their WANTS--not their NEEDS.

To be successful with his system, producers need to have four areas of competency:
1).  Mortgages
2).  Taxes
3).  401(k) plans
4).  Expenses

Mr. Blanton took us through his process by doing a condensed role play about the Circle of Wealth system with an audience member.

Review by Bill Sheridan
Principal Financial Group
Des Moines, IA