Each new year brings with it the promise of changes for financial professionals, and 2015 is no different. The question is: How will you react to these changes and ensure you remain on the forefront of client services?
Facing challenges head on
According to LIMRA, insurance producers must contend with two challenges during 2015: reaching underserved markets and managing the after-effects of a low interest rate environment.
“We believe it is encouraging that reaching underserved markets tops the list, as it indicates more companies again are thinking about how to grow and looking for opportunities,” stated the 2015 LIMRA Predictions Report. “Participants noted a couple of different themes related to reaching underserved markets. First is a distribution focus: How can the industry engage more people? As one executive noted, ‘We’re not reaching a huge part of society.’ Second is a change in the life insurance buying experience: How can the industry shorten the process and make it less invasive?”
Finding effective ways to reach underserved markets was cited as the biggest challenge for 2015 by 37 percent of professionals, followed by low interest rates at 35 percent. However, as LIMRA pointed out, these are good problems for the industry to have. Professionals are realizing they have untapped markets available they can use to grow their businesses, and the year ahead is ripe for strategic positioning to capitalize on this.
Continuing the trend
Another challenge financial professionals must contend with in 2015 is a continuation of one that has been driving changes in recent years: The morphing role of financial advisors in the face of technological advancement.
“The buyer/seller relationship is changing,” LIMRA continued in its report. “Consumers commonly do their own research, relying on traditional sources of information as well as the Internet and social media. Consumers increasingly view sources other than financial professionals as most valuable.”
In fact, only 37 percent of individuals cited advisers as the most valuable sources of information, down 18 percent from 2006. Meanwhile, the Internet gained 39 percent over the same time period.
However, this isn’t necessarily bad news – it simply means producers must modify the role they play in order to keep up with consumers. For instance, as opposed to being the source of information for various options for clients, producers may now act as the guiding hand and voice of experience that help clients choose from among their options.
Additionally, changing demographics spurred on by longer life spans will likely create a greater need for more personalized solutions to financial problems. This will spotlight the knowledge professionals have and display value to consumers dealing with life circumstances past generations didn’t have to worry about.
Financial professionals feeling confident overall
While there are sure to be challenges ahead for many producers, long-term prospects for 2015 appear to be promising, according to InvestmentNews. Results from the InvestmentNews 2015 Outlook survey show that 8 in 10 financial advisers are confident about their business prospects for the year ahead. Nearly half of advisers are somewhat optimistic, while more than a third are very optimistic.
Much of this confidence comes from the fact that many advisers believe the U.S. economy will continue to improve. Approximately 44 percent of advisers predict the economy will be on the same level as 2014, while 40 percent believe it will improve throughout the year ahead.
The beginning of a new year is the perfect time to take stock of past victories and determine which areas of your business can use improvement. Whether it’s enhancing efforts to reach underserved markets or modifying your services to account for greater consumer reliance on technology for product research, there are plenty of ways to capitalize on the potential of 2015.