This month our CEO, Jay Judas, sits down with Andy Brim, Vice President of Business Development & Distribution at Vanbridge Life & Executive Benefits. The pair discuss the intersection of wealth management and life insurance, fiduciary duties, and running the Columbus Marathon.
JAY: Wealth advisors are perfectly positioned to work with life insurance professionals, yet they seem to be the referral source most resistant to doing so. You are changing this by developing these advisory relationships in a way where life insurance opportunities are embraced. I would even go so far as to say that you have cracked the code, Andy, on part of our industry that has evaded so many.
We will dig into your work with the advisor community but, first, talk about Vanbridge and your position with the company.
ANDY: Thanks Jay, I can’t tell you how honored I am to participate in your Tier One Interview. You’ve had some amazing people within our industry featured over the last few years, I hope I can meet your high standards! The title on my business card says that I am a Vice President of Business Development and Distribution. For those of us in the life insurance world, that means that I am an independent wholesaler of life insurance. I was told years ago by a sales coach that I needed to develop an elevator pitch and my elevator pitch is that I make life insurance sales a more meaningful source of revenue for my partner advisor’ firms. Those partner advisors consist of wealth managers, RIA’s, family offices and trust companies.
JAY: Like so many, you are a transplant to Columbus, Ohio. Where did you grow up and how did your education and career path point you to the life insurance industry?
ANDY: I was born in Buffalo, NY and raised in a suburb called Lockport. From there, I found my way to The Ohio State University here in Columbus. While at Ohio State I needed to find a job that involved more than physical labor despite my only real skill set being that I liked to talk to people. That limited skill set led me to the exciting world of telemarketing. I really didn’t mind cold calling and was pretty good at it, so I continued doing that for the last two years of college. I never dreamt for a second that cold calling people to get them to buy chimney cleaning services or carpet cleaning would lead me to a job at a major wire house, but that’s what happened. After graduating I landed an interview with Morgan Stanley (then Dean Witter Reynolds). I was lucky enough to land the job as a junior partner to a larger producer in the downtown Columbus office. He had his law degree and taught me a lot about the investment business, not the least of which was estate planning. After getting my securities and life licenses I decided to leave my role as a junior partner and try my hand at building my own book of business at Smith Barney at their downtown Columbus office.
As you mentioned, the wirehouse channel, especially in the 90’s was not an environment that promoted life insurance sales. I did do some life sales there, but, truthfully, the first insurance-based product that I really focused on was annuities. The introduction of the living benefit on variable and indexed annuities fit perfectly into what I was doing with my clients when planning for retirement.
I spent nearly 13 years at Smith Barney and really had no intention to leave when I got an offer from a large and successful client of mine that I couldn’t refuse. He had built a successful independent wholesale company that specialized in wholesaling 401(k) plans that were built on a life insurance chassis. He convinced me join him and to help build out the same type of business focusing on individual solutions such as life insurance, annuities, and long-term care. We were building a life brokerage general agency and didn’t really even know it at the time! To say I learned an awful lot about our business in a short period of time would be an understatement.
The transition from wirehouse advisor to someone that had to learn everything about all life and annuity carriers’ products was an interesting one, to say the least. I valued my time there as if gave me insight into what it takes to run a successful brokerage general agency both from a sales and administrative standpoint. My boss eventually decided to sell his business to one of the carriers he represented so I was off to the BGA world.
It took me a couple of stops before I found my way to Vanbridge, but it’s a great fit for me and what I’m trying to accomplish with my advisors. The tools and resources Vanbridge offer are exceptional and really help as I work with my target market. Also, it doesn’t hurt that the people here are really wonderful.
JAY: Twenty years ago, I was being sort of punished by my life insurance company employer at the time and assigned to nationally cover wirehouses – a grinding and thankless existence that had me on a plane, on average, every 68 hours and away from home for up to four weeks at a time. You and I are pretty sure I visited your Smith Barney office back then during a period where I visited 75 Smith Barney branches. Today, wealth advisory relationships for affluent clients are a lot different than when some of that work was handled by the wirehouses. When it comes to life insurance, what are the primary strategies for which wealth management clients need life insurance?
ANDY: As I mentioned earlier, my primary focus is working with advisors that are in the wealth management space. My typical partner advisor is someone that works with predominantly high net worth and ultra-high net worth clients. Because of this, the majority of my life sales is focused on two main areas - estate planning cases and overfunded policies designed to produce supplemental retirement income. The genesis of each of these sales is often the financial plan that is created for the client. All of my advisors are planners at some level. Most use some sort of planning software to provide them the plan that they’ll work off of when making their recommendations. It may be MoneyGuide Pro, eMoney Pro, or perhaps a proprietary planning program.
Plans from each of those sources will take into consideration life insurance as it pertains to income replacement, and or legacy planning, estate growth under a certain period of time, and retirement income and where there will be perhaps, a shortfall. I’ll go through these plans with my partner advisors and have them show me those particular areas. If the client is going to have a taxable estate at life expectancy of $60 million, how will their beneficiaries pay the taxes? If the client has maxed out contributions to traditional retirement savings vehicles and wants retirement income from age 65 to 90, what will you as their trusted advisor recommend, they do to make up for the income shortfall that their current plan shows?
I’ve been amazed at how many wealth advisors will follow these plans to a “T” for every recommendation as it pertains to a client’s asset allocation or retirement plan yet gloss right over the portion of the plan that deals with a potential estate tax issue, or desired retirement income shortfall. The plan is telling them what’s necessary and many times, for a multitude of reasons, they are choosing to ignore it.
JAY: We have stumbled upon the huge disconnect between financial advisors and life insurance professionals. You just named all the ways that life insurance benefits the clients of wealth managers. What keeps many of these advisors from making referrals or even broaching the subject of life insurance with their clients?
ANDY: That’s a great question, and truthfully, it’s a question that I often ask my advisors. I think there are really three main reasons that those in the Wealth Management space are hesitant to discuss life insurance with their clients.
First, is lack of understanding on the advisor’s part. Many wealth managers are great at attracting new clients, managing their assets, conducting portfolio reviews, and doing all of the things that are necessary to run a successful wealth management business. They are confident in those abilities, and they should be. The last thing they want to do is inquire about a client’s life insurance policy and perhaps be asked a question that they’ll be unable to answer. They simply don’t want to look stupid.
The second reason we don’t see a lot of life insurance referrals from these advisors is time, or their fear that they don’t have the time. Because I once sat on the same side of the desk as my advisors, I understand that you reach a point where time becomes your most valuable commodity. At this point you may feel that you’re already stretched too thin in keeping up with the daily activities of being a wealth manager. Many fear that taking on a new, and often technical discipline such as life insurance is something that they simply don’t have the time to do.
Truthfully, that reason alone is what has shaped my business the most. I’ve worked hard to build a system where we take on a lot of the tasks that will require the most time in a life insurance sale. I refer to it as my 90/10 rule. “You, as the wealth manager, spend 90% of your time on your core competencies as a traditional wealth manager. I only ask that you spend 10% of your time, working with me on life insurance.”
If the advisor works 40-50 hours a week, we’re talking about 5 hours per week maximum. Five hours to help your clients, provide a huge value add to their overall situation and, in most cases, drastically increase the revenue for their firm. To me, it’s a great trade off.
Lastly, the third reason for a lack of life insurance referrals, as much as it pains me to say this, they don’t want to be seen as a life insurance salesperson. They view themselves as a money manager, a portfolio manager, or a family office investment advisor, not a life insurance salesperson. This is a driving force behind what I do. I say to these folks, “You be the trusted wealth advisor, you manage the assets, attract the new clients, I’ll be the life guy behind the scenes adding value to your practice.”
JAY: Are you comfortable sharing your magic formula for how you and the Vanbridge team are able to be so successful in obtaining referrals from RIAs and other similar advisors? I found it interesting when you told me that if these advisors ignore a life insurance need and don’t stay involved in any life insurance transaction their client then has, the advisor might also inadvertently turn over their wealth management duties, too! Talk about this slippery slope.
ANDY: RIA’s, family offices and other firms that aren’t in a position to evaluate and perhaps ultimately replace a client’s life insurance policy will often refer cases to me directly. In my opinion, the two major factors that drive those referrals to me are trust and their view that we’re more than competent to handle whatever situation the client may be in. I don’t sell securities or do investments. The advisor is at no risk of losing their client to me from an investment standpoint.
The same can’t be said if they were to just let the client discuss their situation with an outside life insurance-based firm. I attended a meeting about a year ago where two large producers from a captive life insurance firm spoke. They had just come from their national sales meeting. The message they conveyed was simple and somewhat surprising. As a firm, they were evolving into a wealth management-based organization that also happens to sell a lot of whole life insurance. As an RIA, is this someone you want to refer a valued client to?
JAY: Given your position, you are up to speed on all the fiduciary rules in the advisory space. I have often been caught up on my soap box talking about how this fiduciary requirement extends to the referral to a life insurance producer. How can an advisor call themselves a fiduciary if they are referring their client to someone who is a captive agent or otherwise doesn’t have access to a broad array of products….or a life insurance professional who doesn’t have their securities licenses? What is your view on this?
ANDY: My approach when conducting meetings with potential partner advisors is probably a little unconventional. Most of the initial meeting is spent with me asking about their practice. I want to find out what drives their planning process, their investment philosophy, how they get new clients, and how do they keep the clients they have. When it comes planning, I will always ask if they consider their planning to be comprehensive in scope. Ninety-nine times out of one hundred they’ll say that they do.
I’ll then ask them to walk me through how they evaluate their client’s current life policies or what their process for recommending new policies is. When they tell me that they don’t really do that, I bring to their attention the obvious disconnect. How, as a trusted advisor that considers all aspects of a client’s financial situation, can you totally ignore, or hope that someone else is doing a good job with their client’s life insurance?
In my opinion, and I realize I’m not going out on a limb here, comprehensive wealth management is the future of the financial services industry. If you need proof, you needn’t look any further than the story I told earlier about the captive life insurance company spending all of their available resources on becoming more of a wealth management firm. To thrive in this world, in my view, it's necessary to have the tools and resources available to thoroughly analyze your client’s life insurance needs. To ignore them is at best haphazard and, at worst, negligent.
JAY: You, my husband and I have all run the Columbus Marathon and you will be running it again this weekend. Good luck! I imagine this has consumed a lot of your free time of late but, if you can, talk about your other interests, your family and your upcoming transition to being an empty nester.
ANDY: My favorite part of running the Columbus Marathon is when people tell me “oh that’s a flat course so it’s easier!” It’s still 26.2 miles and when running that far I much prefer flat. I will be running that again, and truthfully, I love training for it. I do it before work and it really helps clear my mind, and if my day eventually goes sideways, at least I know I got my run in.
I am married to my high school sweetheart, Julie. We have three sons, Ian, Jack and Andrew. Ian is an internal wholesaler at Nationwide. Jack is a Logistics Flex Support Specialist at Ease Logistics here in Dublin and Andrew is a senior Economics major at Denison University in Granville, OH where he plays lacrosse. We also have a great dog named Earl who we rescued during COVID-19 when a lot of folks were rescuing dogs.
My wife and I, at least for one more year, will spend a lot of our Winter and Spring going to watch our youngest play lacrosse. We’ve always enjoyed watching our sons play sports so when it comes to an end in June it will be tough. We also enjoy going to concerts from time to time and whenever possible visiting with my five best friends from high school and their families.
When I’m not hanging out with my friends or running, I like to fish. Sometimes that will be by myself or with a friend and sometimes I’ll bring some of my advisors on a trip. I did an advisor fishing trip to Lake Saint Clair in Michigan this summer and will be taking two of my advisors fly fishing later this month. I’d like to do more of that in the future.
JAY: Because I lived in Columbus, I am anxious to hear your answer to our restaurant question. You, I and most everyone in Columbus are huge fans of chef and restaurant empire owner, Cameron Mitchell, so I’m not sure if he will play a role in your answer. If not, I’ll give a preemptive response to tell our readers to stop at the Columbus Fish Market on Olentangy River Road and order the lobster bisque.
Without naming a steakhouse or a steak dish, were do I absolutely need to go and what should I order?
ANDY: This is an easy one. The next time you and your husband, Pete, are in town, perhaps after running the Columbus Marathon again, we can go to the Pearl at Bridge Park in Dublin. Bridge Park is a new development here in Dublin with great restaurants and bars. I’m a big seafood guy and I absolutely love their oysters on the half shell and their shellfish tower. If I’m being truthful, I have ordered them both at the same sitting and gone full-on shellfish mode. It’s fantastic!
Photos courtesy Cameron Mitchell Restaurants
Since its inception, Life Insurance Strategies Group has solely focused on the individual high net worth life insurance market. We do not sell products. This allows us to offer unbiased, pragmatic advice. Visit us at www.lifeinsurancestrategiesgroup.com.