July 2010
Add value and get (lots of) business David Stein has been a top Liberty performer for many of his 31 years with the organization. A professional accountant by trade, he saw the potential in insurance sales and stepped away from an established career to follow a passion. He shared his views with us on a number of important topics for anyone looking for a career path in sales, whether in financial services or not. How I sell “I sell investments predominantly, but I sell the full range of products for my clients. I do financial estate planning, I do income tax. I always compare what I do to what a doctor does. When a doctor examines you, he sees what’s wrong and prescribes the correct medicine, but when you have one person doing your income tax, another doing your investments and another doing your life insurance, nobody really knows the whole picture.” “It’s important in sales to maintain constant contact with your clients. Especially with the turbulent times we have been through recently, you must constantly go back to your clients and say, look, this is what is happening in the market and these are the reasons. I cannot predict what’s going to happen tomorrow, but I follow things on a daily basis and historically, it has been proved that if you have good underlying investments, things will come right. You’ve got to constantly reinforce the choices they have made to invest and to invest in particular with you.” “Also, I show my clients what I am doing myself. I believe you practice what you preach and I show them my investments without telling them the amounts involved. I tell them I am prepared to sit it out personally because I truly believe that what we have done is correct.” How the game has changed “When I started out, you had a simple rate book, and the rates were A,B and C, inflation was whatever it was, and things were more or less constant. You didn’t have 9/11 and the Euro crisis, you didn’t have this massive deregulation of commissions or the rise of consumerism.” “Legislation is changing on a daily basis today. The good thing is that they are trying to uplift the profession. You have to write various exams and I am in full agreement with that. There were a lot of fly-by-nighters. But now when a new guy joins, he’s got three years of mentorship or apprenticeship with his manager, I have no doubt that is good. But I do think that with the increased focus on legislation, they sometimes go overboard and we’re seeing some of the changes that have been made in the UK and Australia come under review in recent years. We may see the same here.” Advice for those starting out “A person coming into this business must be passionate and firmly believe in what he is asking other people to buy, because I can’t ask you to invest in something if I don’t believe in it myself. You have to believe in it 100%. And in fact the example I always use was that when I was an articled clerk earning R45 per month, I took R5 and invested in a life policy which I still have today.” “Part of my success is that I have always believed and still believe today that life insurance, and policies for dread disease, retirement, disability are vital things in a person’s life.” “Also, always give the client the best deal. Don’t just sell what is going to put the most commission in your pocket. You ruin your reputation. It will catch up with you. Give the client the best deal.” “I wouldn’t focus on one or other particular area if I was starting out. Both my sons are in this profession and I say to them, see as many people as possible and get comfortable with your planning and sell everything.” How I find new business “You need to have your finger on the pulse. You have to read extensively because you’re likely to find great opportunities. Recently they changed the Estate Duty Act, very simply to say that retirement annuities are now free of Estate Duty. But another change was that previously you had to draw your retirement annuity by age 70, where now you could keep it longer and also take out a new retirement annuity after age 70.” “I cut out the article from the newspaper and went to see as many attorney and accountant clients of mine as I could. I said look guys, here’s a great opportunity; we’re going to save your clients a lot of Estate Duty. Within the first week I did one for R15.5-million, another one for R5-million and we’ve just touched the tip of the iceberg. So that is just one example where if you are awake, you can find opportunities.” Taming the beast “I take plenty of regular small breaks. And on a daily basis I walk from my place in Camps Bay to visit my young grandson in Sea Point, which is about eight-and-a-half kilometers. So I get my exercise besides playing golf and I don’t work much after five or five-thirty, unless I have to. I come home, I walk, my wife and I go to a movie once per week and have dinner on a Saturday night. A balanced life is important. For many people in this game, money becomes the biggest thing in their lives and they forget other things. Family life is important. And I think a balanced life is the name of the game and that is another thing I recommend to anyone starting out.” “I have always made a vow that I will never talk business on a golf course. I play with the same four ball every Saturday morning and I have never broached the subject at all. I don’t make a habit of playing golf to get clients.” How I got started “I was a qualified accountant when I saw an advert in the newspaper calling upon accountants and attorneys to investigate selling life insurance. At the same time, I had been advising one of my clients who was a big tax payer to consider taking a retirement annuity because there would be big savings for him in doing so. When I showed him the before and after calculations, he basically asked who to make the cheque out to.” “So I went and got an agency and I got a commission cheque of R3 500 which was seven times my monthly salary at the time. Knowing that I could combine my accounting qualifications with insurance sales and be successful, I decided to take the leap. That was November 1, 1979.” “It was commission only, but until you began earning commission they would give you an advance based on what you had been earning previously. I had been earning R500 per month, and they offered me R700 which was a 40% increase and you know in those days it went a long way: the rent on my flat was around R40 per month.” “It was around five months later that I told them I didn’t need financing anymore because I had earned in commissions around R11 500 after my first four months.” “I was able to combine skills: because of my accounting background, I also offered a service of doing my clients’ income tax returns for them free of charge. That way I was adding value and giving them good reasons to do business with me and at the same time I was able to see where their finances could be impacted positively through the commencement of a retirement annuity for instance.” The length of a career “I’ll keep doing this for as long as my health holds out. I was asked recently when I am going to retire and I asked, well what do you do when you retire? You travel a bit more, play a bit more golf, but I believe that is what keeps your mind sound is getting up in the morning because you have something specific you need to do like go into the office for example. In this business you can keep going until you’re 85 or 90 and I’ll keep going for as long as I’m enjoying it.” A pitfall to avoid “A lot of guys chase the buck. A lot of guys think the most important thing is to make money and unfortunately they form bad habits. They sell what makes them the most commission even though it is wrong for the customer and there is no after sales service. That’s very old school. Today, clients can choose from a million different advisors, there is so much competition out there. You need to be a step ahead in giving the client the best deal and great after-sales service.” Finally, what are the advantages of working for Liberty Life? • Liberty Life has a great brand name. • It has financial strength being owned by Standard Bank which in turn has ICBC as a 20% shareholder. • Honesty and integrity.