Investment Firm vs Insurance Firms

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Nov 28, 2008 8:10 pm
This is a question for you seasoned reps:   I am looking at a career change at this point in my life and would like a little advice.  I am currently in the lending sector (not residential mortgage) and have had a succesful career in commercial lending and most recently as a chief credit officer at a commercial lending institution.  I have the following suitors right now:   EDJ Allstate Exclusive State Farm   As far as I can tell, the insurance industry is moving into the FA territory, and vice versa.  I have a list of products offered by EDJ, and they pretty much offer the full suite.  From previous posts that I have read, it looks like EDJ is not very competitive (at least in their payout structure "haircut") with the non-investment side.  As for the two insurance companies, I get the feeling that their offerings are limited on the investment side.  From an insiders perspective going into the future, which would you choose to build your career around and why?  This is more of a long term question-I believe the future is in heavy cross-selling, so who is set up the best to provide the most competitive suite of products?
Nov 28, 2008 8:17 pm

If insurance is your focus, Jones is not the place. Their payout and commissions tructure is similar to all the wirehouses.

But if insurance is not to be your focus, I would choose Jones.

Nov 28, 2008 8:58 pm

Thanks B24 for the quick answer.  To question your reply, why would you have to target one or the other?  I know with EDJ I would do alot of cold calling.  If I were faced with someone that needs fixed income advice and medicare suplemental at one call, and then someone that needed a growth plan retirement, mortgage refinance and disability in the next call, it seems right now that no one firm can fit the bill.  Is it because that is too much expertise demanded of one captive firm (i.e. too much red tape to cut through), or that it is too much to ask for one individual to be an expert in…and perform responsibly in a timely manner on? 

Nov 29, 2008 10:40 am

Funny thing is you can do all of those things at Jones.  However, I don’t think that I’ve ever had a serious conversation with my clients about their medicare supplemental insurance.  I’ve got a brochure on it in my office, but it’s not something I spend time on during meetings. 

  You just need to focus on what you are going to do the best.  Better than anyone else you know.  If it's investing, go to EDJ.  If it's insurance, go to Allstate or State Farm.  You'll be able to do some insurance biz with EDJ, but it won't be your primary focus.  When you do them you'll get paid relatively well on the cases, but your bread and butter will be investments. 
Nov 29, 2008 11:28 am


The reason you wouldn't want to go to Jones if you wanted to focus on insurance is because you would have to put the business through the grid, so you would get paid 40% of 72-80% of first years premiums on terms and 40% of 70-80% of target premium plus a little extra for excess premium of perm policies. If you went to an insurance agency, you would get at least the full 72-80% and sometimes as much as 140% paid to you. That being said, I can tell you that doing Insurance through Jones is pretty easy, for the most part you can even bring in wholesalers to close for you. All you have to so is set up the meetings.
Nov 29, 2008 11:54 am

you will not even be remotely competitive in the investment world if you end up at either of those 2 insurance firms. nobody even considers allstate for their investment/retirement planning. jones offers a limited amount of insurance carriers. the ones they offer are decent, but again, they offer 4 or 5 i believe.

you need to decide whether you want your practice to be insurance based or investment based first. those 3 firms should never have to “compete” for the same position, they do drastically different things.

Nov 29, 2008 1:21 pm

Thanks for the info.  The reason this concerned me is that I live in an area with unique demographics.  The permanent population is young compared to the rest of the nation and the MSA is consitently in the top 5 as far as growth.  On the other hand, we have a substantial amount of what we call Snow Birds- Retirees that live here in the winter.  Some of this segment becomes permanent every year.  I could see alot of demand for Medicare Supplemental and/or long term care insurance from that segment.  I know an EDJ FA that I used to work with at a previous employer and when I contacted him regarding my plans, he had just gotten back from a group presentation about the long term care coverage.  I want to concentrate on the investment side so it looks like EDJ would be the way to go, if I can sell some insurance along the way that will just be the gravy…

Nov 29, 2008 1:54 pm

What about looking at a firm like Northwestern Mutual, Mass Mutual, Met Life, Guardian, or NY Life?  You'll be able to do both investments and insurance AND the insurance business won't have to go through the grid.

Nov 29, 2008 10:01 pm


What about looking at a firm like Northwestern Mutual, Mass Mutual, Met Life, Guardian, or NY Life? [/quote]

How much invesment business would you really be able to do at Northwestern Mutual, NYL, or Met?

Nov 30, 2008 1:39 am

[quote=someonewouldntexpect] [quote=deekay]

What about looking at a firm like Northwestern Mutual, Mass Mutual, Met Life, Guardian, or NY Life? [/quote]

How much invesment business would you really be able to do at Northwestern Mutual, NYL, or Met?

[/quote]   I'm guessing a helluva lot more than Allstate or State Farm.
Nov 30, 2008 1:55 am


 I'm guessing a helluva lot more than Allstate or State Farm.[/quote]

Haha, good point.
Dec 2, 2008 4:42 pm

Well, it was asked why I was not interested in wires or banks.  I now have Wachovia Securities courting me as well.  I know things have changed alot with them taking over AG Edwards and merging with Wells Fargo.  So I guess it now comes down to this - Wachovia or EDJ?  Anybody care to comment?

Dec 3, 2008 6:58 pm


  I was in your exact situation about 8 months ago. Insurance companies make it sound like you do the same thing as you would at a pure investment firm, but you have to put yourself in the shoes of someone with money. Would you go to an insurance agent to invest and plan for retirement? My answer to that question, personally speaking, was no. And I believe many others (especially HNW) would feel the same way. So if you want to focus mainly on investments go with an investment firm.   Secondly, you asked about WS and EJ. I was faced with the exact same decision and went with WS. I decided to go with WS because of a few reasons: 1) Over the long-term I didn't want to be limited by my platform (can't do options, fee-based business has high minimums, etc with Jones). 2) WS inherited AGE's training program which is one of the best (if not the best) in the industry 3) I started out with an office vs. working out of my car and borrowing an office for appointments  4) Starting salary was much higher (although this matters less over the long-term)   Have there been some rough spots along the way? Absolutely, but I am still glad I decided to go with WS. They have excellent product and sales training. When talking with WS, you should find out if you will be joining a team or going it alone. In contrast, you may want to find out if there is a goodknight opportunity available with Jones, that may factor into your decision. Part of your consideration has to be where will you survive long enough to stay in the business and the other part should be a consideration of where do you want to be over the long-haul.   Either way, you are coming into a tough environment (others may disagree) so better be ready to prospect.
Dec 4, 2008 4:17 am

“Would you go to an insurance agent to invest and plan for retirement? My answer to that question, personally speaking, was no. And I believe many others (especially HNW) would feel the same way. So if you want to focus mainly on investments go with an investment firm.”

  Isn't an insurance agent anyone who has a license to sell insurance?  Almost all of us are insurance agents.  It's simply a matter of how we choose to present ourselves.  If someone wants their focus to be on investments and specifically work with HNW, I agree that they would probably be better off at an investment firm.  If one wants to focus on helping people achieve their financial goals and wants to be able to make a decent buck from clients without significant assets, an insurance company is probably a better place (not a P&C firm).
Dec 4, 2008 11:48 am

Howie- Thanks for the advice.  I went back and read your posts from April and can see we have alot in common as far as what’s important.  I think I would be more than happy working with either firm, but WS does seem to hold the edge.  As far as starting salary, it is not as much a concern for me as it is my wife (she’s in education, and doesn’t get the whole risk/reward thing).  I have my behavioral/role play interview tomorrow with WS and on Monday with EDJ.  Any comments you have regarding that part of the process would sure be helpful!!

Dec 8, 2008 1:03 pm

Well, I “passed” my behavioral interview and they are moving me on to the next level, which appears to be a face to face with the local BOM.  I called a friend and former loan client who had a million+ book with UBS up until he retired recently.  While his specialty was international accounts, and this job would concentrate on domestic, he suggested I go in with a highly targeted marketing plan.  He also suggested I start thinking about an area of expertise.  My first thought was to target the low lying fruit first (family and friends), then move on to my former HNW loan clients, and expand into the local medical staff, which I have many acquaintaces with due to my father being the local hospital CEO for 27 years (recently retired).  But from what I gathered from my UBS buddy, it looks like my plan should be more specific.  (He also mentioned that 80% of people that go into this business end up divorced in the first 3 years!!!).  Any thoughts on how I should approach the marketing plan?