Winning Teams Have Infrastructure


Back at the end of the NFL season, I remember listening to a sports broadcast discussing the similarities of the four franchises in the conference championships. All these teams had something in common: infrastructure. It’s an important ingredient for success in sports AND business. 

The host pointed out that each team had built a championship contender through various methods: free agency, the draft, retaining talent through long-term contracts or some key trades. Two teams had MVP quarterbacks. Two other teams had rising quarterbacks. Some teams relied on the run more than others, and a couple relied heavily on the short passing game. The methods were different, but all led them to winning. 

If you’re going to succeed in business, you need to find a way to build (or partner with someone that has) infrastructure around you. In the financial services industry, you need to have:

  • People who can support your sales efforts – Product specialists are key to positioning the correct solution with the right client situation.

  • Post-sales support – You need to be able to get your pending business through the pipeline efficiently, with little need to touch paper after the client signs. You need to be able to focus on the next client solution. 

  • Marketing – You must have a team that understands our business, your business, your clients’ needs, and how to brand that story repeatedly.  

  • Cutting-edge resources – Your staff needs to supply a flow of ideas and clients to you so that you are always looking for ways to drive revenue through your office. A good brokerage agency can provide ideas through data-mining and understanding the coming trends in the industry. 

  • Financial reporting – Just like you ask of your clients, you must be able to understand where you earn your revenue and where you spend it. Make sure you are getting all the commission reporting from your carriers to make your life easier. Establish processes so you can monitor the financial health of your business. 

If you don’t have the resources to reinvest in your business today, then you should partner with organizations that can help with the above areas. You might find that their partnership is more valuable than having a single person on staff, and it may be more profitable to outsource many of the infrastructure needs listed above. If you’d like more information about creating an infrastructure around your office, give us a call at Ash Brokerage. 

The Bottom Line: Successful teams and businesses have outstanding infrastructures surrounding them. Great producers focus on activities that solve client problems, while others handle the non-revenue activities.  

Change vs. Virtuosity


The definition of change is to convert or transform. Essentially, we all change year after year as we continue to transform as humans. But real, meaningful change might be better described as virtuosity – the development of great skill or mastery. So, what does it take to become virtuoso?  

Becoming a virtuoso starts with one question: Am I resolved to be the best? If you are resolved to be a virtuoso, you have a purpose or intent to be the best. In doing so, you will do the things necessary to become the best – regardless of time commitments, money or effort. That is a clear difference to just changing.  

As an industry, we have to be resolved to improve the client experience with underwriting, application processing and overall experience. We must commit to making the industry better, and do so in a manner that deploys financial resources, intellectual capital and time commitments from all levels.

We have to change our mindset from just change – because we are changing for the sake of change – to being resolved to make our industry a virtuoso industry. It has to be one that new talent views as a premier place to build a career, where clients seek information and don’t rely on “robo-investing,” and where we deliver true value to clients.  

The Bottom Line: Re-think change to become a virtuoso, and remember the first step is redirecting our mindset.  


Contracting Doesn’t Have to be Complicated


Contracting is a single word, but it covers a broad scope of responsibilities. To an advisor, it may seem like a lot of hoops to jump through, but our team focuses on making these necessary steps as easy as possible for everyone. 

To begin, we validate that the agent has an active appointment with the state in which they are writing business, and that they have the necessary the line(s) of authority on their license for what’s being written. Then, we process the carrier-specific contracting documents and ensure all required courses have been completed for continuing education and product training. 

Finally, we setup the appropriate commission schedule and contract hierarchy with the carrier to ensure the agent is paid correctly on the business being submit through Ash Brokerage. 

Our dedicated contracting team works hard to understand and maintain the most-up-to date information related to carrier and state requirements – we’re happy to help you navigate through the process. Our advisors can also access our custom database, which lists specific carrier and state requirements and provides links to carrier training portals. It’s a valuable tool we provide at no cost to advisors. 

The Bottom Line: Contracting doesn’t have to be complicated. Let our team help you through this process so you can get on your way to getting your case in force. 


Do You Know What You Own?


Anyone can look at their quarterly statements and see what they have in their portfolio, right? But, do you really know what you own? Granted, you can easily see the ticker symbols for your mutual funds, but you might be surprised to know how much drift there is in any mutual fund in the United States. 

It’s always good to sit down with your clients and review their portfolio’s asset allocation – many advisors use tools such as Morningtar, Albridge or other data aggregators. Before your client meeting, however, it’s important to review the style drift and correlation of the selected mutual funds. Style drift happens when fund managers tend to chase returns and look to different asset classes to gain extra return. Before you know it, the large cap equity fund becomes a small cap emerging growth fund. 

It’s the advisor’s responsibility to make sure the fund managers continue to meet the requirements of the allocation strategy by maintaining their expected asset class. 

A recent article from Financial Planning (subscription required) highlighted the increased correlation in returns between several bond funds and the S&P 500. Due to the continued low-interest-rate environment, many bond funds perform similar to equities. The idea of an asset allocation strategy is to have uncorrelated assets in the portfolio to balance and reduce volatility. While those bond funds may have maintained the integrity of their portfolio design at one time, the current economic environment makes it necessary to revisit their viability into today’s portfolios.  

When you dig deep in your clients’ portfolios, you’re promoting trust and deeper relationships. Take the extra time to review all aspects of the portfolio, including risks and potential solutions to reduce risks. Many of us may not see the risks of our current allocation strategy until it’s too late. Take the extra step to look at vehicles that remain uncorrelated to portfolios.

The Bottom Line: The current economic environment has changed the way traditional investment vehicles perform. Take time to re-evaluate the products used for a client’s asset allocation strategy and reduce volatility due to highly correlated investments.  


What’s the Largest Case You’ve Written?


A salesperson often gets asked, “What’s the largest case you’ve ever written?” My answer is always that I haven’t written it … YET. However, that time may be coming soon. Due to changes in the pension environment, I think we should get into position to write large cases in 2016 and 2017. 

Significant changes in the pension landscape make it a great time to discuss transferring the plan’s risk to an insurance carrier. First, due to the continued bull market, plans have increased in value. February’s corporate plan funding index increased to 87.5 percent after posting its best 30-day performance since January 2011.1 

With plans closer to being fully funded, business owners must write a smaller check to reduce or eliminate the risk from the balance sheet. Along those same lines, rising interest rates in the future will erode the bond valuations of current plans, making it more costly to transfer the risk. Now is the right time to have the conversation. 

Second, the Society of Actuaries has suggested – and Congress has approved – the change in actuarial assumptions in pension plans. It is expected that the actuarial changes alone will negatively affect funding levels by as much as 8 percent.2,3 Due to the length of time it takes to move a plan to a carrier from Department of Labor standards, most plans will likely be affected by this.  

Finally, premiums for the Pension Benefit Guaranty Corporation are on the rise, with plans paying $49 per participant in 2014, $57 in 2015 and $64 in 2016. Underfunded plans also pay a variable premium per $1,000 underfunded of $14 in 2014, $24 in 2015 and $29 in 2016.4 These premiums will increase the overall cost of maintaining a fully funded plan by more 30 percent and significantly more for underfunded plans.

If you are looking for a way to talk to business owners, and at the same time write a big case, consider exploring the pension termination marketplace. The time is ripe for advisors to bring business owners a solution to that is ready to help them in 2016.  

The Bottom Line: Look at the pension termination market for the opportunity to write larger cases in 2015 and 2016.  


1BNY Mellon

2Society of Actuaries


4Pension Benefit Guaranty Corporation