Throughout the world, people can bypass a financial advisor and go online to buy life insurance. In some Asian countries, this reality seems particularly alarming since the life insurance market is near the saturation point. The urgent question then becomes, “Who will I sell to if people go online and buy it themselves? How will I stay in business?”
Despite this, advisors in countries such as Japan, South Korea and Singapore are succeeding in the financial planning industry. Here’s what they had to say.
Don’t sell products
“More than 90 percent of households in Japan have life insurance, and, in addition, we have low interest rates. Selling products is almost impossible today,” said 24-year MDRT member Hirofumi Morimoto. The value of advisors is in their expertise. For example, “There are major tax benefits for small businesses. I study those so my clients can benefit from them,” said Morimoto, a Top of the Table member.
The value is in the advice
“There will always be a percentage of people who think they can buy financial products themselves, and let them be. The reality is, though, financial planning is a complex process and life insurance is a complex product,” said Anne-Marie Li Mei Lee, ChFC, CLU. Lee suggests that advisors need to reach out to people who understand the value of holistic, long-term planning and who can navigate the volatility of the markets.
Furthermore, said 24-year MDRT member Sung Ho Shin, unlike a bank where you can put your money in today and take it out next week, you may not get the benefit from life insurance for 20 or 30 years. An advisor handles the product during that time, especially in the case of variable products where the rate of return can differ depending on how it’s managed, and assists in paying out the claim to the client. “For many people, it’s hard to know about financial products, such as how much insurance they will get and how they can best benefit from it,” said Shin, a Court of the Table member.
Watch Lee, Morimoto and Shin discuss more on this topic in their panel discussion. (MDRT member-exclusive content)
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