This month, our CEO, Jay Judas, talks to David Herrig, Senior Vice President, Firm Development, Lion Street, Inc. The pair discuss David's path through the industry, how to build "commercial value" in a firm, and adopting dogs. Plus, we break our own rule and allow a interviewee to shout out a steak restaurant!
JAY: This may be an odd way to start an interview, but I want to share how I first took notice of you, David. About nine years ago, I was at a life insurance conference and noticed someone who was well-dressed and not wearing an ill-fitting golf shirt and old khakis. I wanted to get to know the person who put in a little effort at dressing appropriately for a business event.
Fast forward to today, and I know that you put in a lot of effort and care into most aspects of your life, including with your role at Lion Street. Tell me about your position and how you fit into the Lion Street producer group.
DAVID: That’s very kind of you to say, Jay. Wouldn’t it be nice to have a nickel for every life insurance event we’ve all been to over the years? It’s always enjoyable being part of the various bands that reunite at these yearly gatherings. I’m truly proud to be a small part of this incredibly noble industry we've chosen to serve.
Regarding my role at Lion Street, Bob Carter, our founder, encourages each of us to build our own business within the Lion Street infrastructure, culture, and community. The Firm Builder role at Lion Street is a blend of new firm selection, business consulting, and often acts as a form of therapy. I spend a great deal of time listening to help those I serve navigate and expand their business revenues while maintaining the work-life balance we all seek. Building trust and friendships over time is incredibly humbling.
JAY: I think is safe to say you are a lifelong Floridian who has taken a few short breaks from living in the state. Walk me through your upbringing and path you took to the life insurance industry. If I am not mistaken, Hurricane Andrew played a role in your early work.
DAVID: Yes, the majority of my life has been spent in Tampa, Florida, with a few business stints in the Atlanta area, coupled with two very cold winters in Chicago back in 1999 and 2000. Chicago is a wonderful city, but it was a bit chilly for my thin Florida blood at the time. After all, to that point, I’d never seen snow, much less cold temperatures. Fast forward to today, and my wife, Mitzi, and I recently purchased a home in Lakewood Ranch, FL, where we look forward to settling in once the renovations are complete. We adore the area and all it has to offer. As you know, we are both quite active outside of business and home life, and the area truly suits our lifestyle.
You are correct about Hurricane Andrew being a part of my work history. When I returned from Florida State University needing the proverbial “real job” our parents often spoke of, I leaned on my mother for her network. Her entire business career was in the insurance space, working for both Federated Insurance and then St. Paul Fire and Marine Insurance. As fate would have it, she connected me with a friend who ran the claims division in Tampa for MetLife Property and Casualty, thus beginning my insurance career. It wasn’t long after I started that Hurricane Andrew devastated South Florida, and I quickly became acclimated to the societal good our business provides in the absolute worst of times for those in peril.
What followed really altered the trajectory of my career. I was introduced to the life insurance office in Tampa and began my lifelong career selling term, whole life, universal life, and securities under the MetLife umbrella. I learned a lot during those early years, which offers me great perspective today. Many people will remember the old one-card system and dialing for dollars, cold calling mortgage leads, then doing the “kitchen table” work in the evenings. I definitely have a lot of stories from those days!
MetLife led me to a TPA in Tampa for a few years before getting back into the financial services space on the manufacturer's side. The next 17 years were packed with learning experiences and mentors who shaped my professional perspective and truly enabled me to develop in the business. I’ve met some truly amazing people along the way.
Lion Street entered the story after I had been with ING/Voya as a wholesaler for nearly 10 years and the carrier began to unwind its life business. Having already served Lion Street as a Partner Carrier for a couple of years prior, I received a call from Bob asking what I wanted to do next, and that was nearly eight years ago. This role I have today is truly the hardest job I’ve ever loved, as I like to describe it.
JAY: In the course of our work at Life Insurance Strategies Group, Pete and I have worked with several of the firms for which you are responsible for developing. They all rave about how you have helped them “go from good to great.” How do you go about taking a life insurance producer or firm from doing pretty good to excelling in the high-end of our industry?
DAVID: That is a great question, Jay. In my mind, it’s really all about their firm and truly understanding everything there is to know about what makes them tick as an organization and as individuals, how they perceive their roadblocks or challenges toward envisioning their practice in its future state, how they began in business, what’s on their priority list - both personally and professionally-, and their thoughts on new markets or further developing existing ones.
I try to take a very consultative, experience-based approach. It is pretty difficult to guide someone’s thought process, development, and direction if you have no idea where they want to go and, as importantly, where they have been. Once this framework has been built and trust has been earned along the way, we prioritize, implement, measure, and monitor. Ours is truly a business-to-business model, and we’ve built our organization to support this mantra. With Lion Street employees and the firms we serve having an equity stake in the business, it just feels different when we all are owners rowing the boat in the same direction. As I often jokingly ask, when was the last time you washed a rental car? You just treat things differently when you own them. As you can imagine, there is a lot of “trust me” in what we do, and nothing is more gratifying than having someone say you’ve impacted their business and changed their lives for the better.
JAY: You know that a “hot topic” for me is the lack of wide-spread succession planning with otherwise first-class life insurance firms. When I search for producers to fit our individual consulting clients who are involved in some type of complex life insurance acquisition, I must dismiss very successful firms because there is either only one producer or, if there is more than one producer, they are all around the same age.
When we spoke a few weeks ago, you mentioned this being a priority for you. You talk about creating “commercial value” with your firms. What does that mean?
DAVID: To me, commercial value can be created by simply moving away from what many in our business refer to as a "lifestyle practice" into a more sustainable, repeatable business model capable of surviving beyond the life of the founder. At Lion Street, we have somewhere north of 50 G1/G2 practices within our community, which appears to address the short term with respect to longevity planning. It's the "what's next" for these businesses that should be part of their future-state planning, in my belief.
I've also seen many firms structured as solo shops who begin to see challenges as their expertise expands, becoming more specialized and moving away from being generalists, respectfully, of course. As clients and their advisors become more sophisticated and the planning work begins to become intentionally generational, it makes a lot of sense for consumers to consider the long-term outlook of the advisors they are relying on to manage not only the complexity in the planning process but also the products purchased to support it. Countless advisors have been asked the question, "What happens if you're no longer around?"
Unfortunately, I've seen significant opportunities unwind in their infancy simply because the producer lacks, or is perceived to lack, a sustainable business model beyond their life expectancy. The challenge lies in how to address this interesting and common aspect of our industry. Towards that, we've “brokered” acquisitions, mergers, and strategic partnerships as all may serve as potential longevity solutions thus creating the commercial value we allude to. After all, most look to monetize their practice when they decide to move to the next phase of their life and having spent the time and effort to create its sustainability makes the prospects of doing so more relevant.
JAY: I want to stay on the topic of your work to help firms grow. A firm does not necessarily have to become a bigger practice to increase revenue. Tell me how you assist your firms in creating verticals in their practices to give them a bigger reach without necessarily adding more bodies and infrastructure.
DAVID: Often, it begins with simple questions along the lines of, "What aspect of the business would you like to focus on today that you're not currently maximizing?" By understanding the various access points of the firm, coupled with an understanding of the response to prior questions, one can begin building out a strategy for expansion with minimal effort. For example, we find many have an affinity towards business owners and, as such, may have an imperfect understanding of the multitude of strategies within the arena.
As you know from your consulting work with companies, there are a host of planning opportunities beyond the boilerplate buy-sell most begin with. C-corps, S-corps, LLCs, Non-Profits, large public companies, banks, and even insurance companies are all prospects where we've found traction. Within this group, you can narrow in on stock redemption strategies, ESOPs, captives, GI/SI strategies, various retention plays for the highly compensated, etc.
Really, what we aim to do is provide expertise given the advisor's access. We've accomplished this through both internal and external measures, further creating a culture of interdependence for the firms in our community while maintaining their broad independence as a whole.
When I reflect on it, the approach just makes sense. Why reinvent the wheel when we can align access with specialized expertise in a particular strategy, all within a community characterized by collaboration? This approach not only streamlines processes but also fosters innovation. "Creating" these new markets represents just one of the many strategies through which we can generate incremental revenue for our owner-firms without disrupting their established revenue streams.
JAY: Some time back, you and I introduced your wife, Mitzi, to my husband, Pete, when Mitzi had some questions about branding and marketing. Now, I think they chat more than you and I do! When you are not helping life insurance firms grow, how do you and Mitzi spend your free time?
DAVID: I always know when Pete and Mitzi have been speaking as she has a glowing smile on her face after the discussion, with a few chuckles along the way. She thinks the world of both of you, personally and professionally.
Mitzi and I have a multitude of interests outside of business. We've always adopted dogs from unhealthy situations, finding it incredibly rewarding to rehabilitate broken souls into trusting, loving, happy pups. These days, it's Bo and Bella who keep us on our toes. Bo came from the Great Pyrenees Rescue of Atlanta (GPRA), rescued from an abandoned farm. It took us about 18 months of love and nurturing for him to regain his confidence and trust in humans. Bella, whom we adopted first, came from a shelter in the area. Her separation anxiety was through the roof, which we discovered after a couple of furniture mishaps while we were out. To ease her anxiety, we found Bo, and they've been inseparable since. We'd love to one day have enough property to adopt even more dogs in need. My PSA would be to adopt whenever possible—it's a blessing to save the lives of these wonderful creatures.
Beyond our love for animals, we both enjoy road cycling, although my approach is more intense than Mitzi's. We'll typically do a calm 8-10 miles together, and then I'll tackle another 20 or more alone. Getting back to the flat lands of Florida will be a nice change! We also consider ourselves foodies and love to cook together, creating new favorites to share with friends and family. Mitzi enjoys gardening, and while digging in the dirt is not my favorite activity, seeing her happy makes it worthwhile.
We both also love stand-up paddle-boarding, enjoying the full-body workout while on the water. We've encountered everything from sharks to manatees. When we pursue our individual interests, you'll find Mitzi buried in a good book and me on the golf course—a game I've loved since my teenage years. While I used to be a single-digit handicap when I was more serious about it, these days I'm content hitting a handful of solid shots and enjoying the camaraderie with my golfing buddies. Don't get me wrong—the competitive juices still flow, and I enjoy being on the winning side of the side-bets, but it's much more relaxing these days.
JAY: Your biking is an inspiration. When I am finishing a one-hour Peloton class, I often think to myself, “Herrig is probably doing twice as many miles today outside in the real world!”
Thanks for participating in the Tier One Interview, David. We have come to the restaurant question. Without naming a steakhouse or a steak dish, what are a couple of places I should visit and what should I order?
I want our readers to know that we had a nearly heated interaction about this because you have a steakhouse that you have been going to your entire life that you love. Since you have been committed to that spot for five decades, I’ll let you mention it……just this one time!
DAVID: Hey, I tried the Peloton during the pandemic and sold it after six rides. I just need to be outside for it to feel like exercising. But, to your credit, an hour on the Peloton is good work!
Before we discuss restaurants, let me thank you for this opportunity, Jay. It is an honor participating in your Tier One Interview, especially considering those who have come before me, so thank you!
With your permission granted, Bern's Steakhouse in Tampa, FL has been my favorite place since my first experience there nearly 50 years ago, so I appreciate you allowing for the reference.
Our favorite spot in the Atlanta area is Trattoria One-41 in Johns Creek. We've watched Thomas and Chef Marc develop their restaurant over the years, and anytime we are back in the area, we make it a point to visit. I lean towards their bone-in, pounded veal chop parmigiana with roasted mushroom risotto, and Mitzi loves their Dover Sole with table-side prep and served with sautéed spinach, one of their off-menu specials they often offer. Both are truly wonderful spots!
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.