Insurance Agent vs. Investment Advisor: Which Is Best For My Career As A Financial Advisor?

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With countless paths available to you as a financial advisor, it might be hard to navigate where you want your career to go. Insurance sales and/or investment sales are two of the buckets where advisors typically tend to spend the bulk of their career.

Here at Consolidated Planning, financial advisors focus on insurance, investments, and cash flow with the goal to provide a balanced financial plan for each and every client. A balanced financial plan is delivered through our team-based approach, focusing on yours and your peers’ unique abilities.

The trajectory of your career is dependent upon the path you choose. Whether that’s insurance, investments, or a merriment of the two, you will benefit from learning the benefits and downsides of these paths to best determine what is important to you in building a successful financial advising practice. The clarity gained in this article will help you decide which type of profession best suits you and your goals.

What’s The Difference Between An Insurance Agent And An Investment Advisor?

The term financial advisor is often a catch-all phrase that can include many types of advisors providing financial services. However, there are differences in the advisors that fall into this catch-all bucket. Let’s look at two recognizable types of professionals in the industry – Insurance and Investment advisors.

What do these type of professionals look like and how do you know which is best for your career?

As an insurance agent, you are the intermediary that bridges the gap between insurance companies and policyholders. You will learn complex details of insurance policies and provide a  suitable plan for your client’s needs.

Benefits of Being An Insurance Agent

#1 Simplified Sales Process

In a career as an insurance agent, you’re likely only selling one thing, one product. In that sense, your sales process is typically easier with no coordination between products.

#2 No Product Complexity

You are a master of one product, not a collection of financial services. With one product to focus on, you will spend less time learning and getting up to speed in the industry.

#3 Focused Career

Your sole focus will be on insurance-related items, creating a more focused career. You may earn more revenue off of insurance than you would have otherwise, being dually focused.

As an investment advisor, you choose, manage and recommend investments for your clients.

Benefits of Being An Investment Advisor

#1 Recurring Income

In a career as an investment advisor, you will reap the benefits of compounding revenue over-time based on the assets that you are managing. As markets grow, your client’s investments will grow, and your advisory fees may grow.  Over a decade it’s reasonable to expect markets to grow, and therefore your advisory revenue to grow. Insurance revenue may decrease over a decade, since insurance policies will fall off and be temporary in nature, and probably not compound like investments. 

#2 Focused Career

Your sole focus is on investment-related items, creating a more focused practice, and perhaps a simpler one too.  Since you don’t have much insurance revenue as an investment-focused advisor, you’ll probably need to do more investments to make up the difference in revenue.

#3 Easier Practice Management

With each portfolio including investments only, there is far less coordination between products, making the back office practice management of your practice easier.

Being an Insurance Agent or Investment Advisor as a focus will make you more transactional.  Likely, your first meeting will be pre-meditated and about product.  Likely, a consultative approach isn’t used, in favor of a more transactional approach.  This may lead to a less integrated, coordinated and strategic plan.  A client can often tell from the first encounter with an Insurance Agent or Investment Agent what the product offering will be, and again, it’s often a transactional one.

Drawbacks of Being An Insurance Agent or Investment Advisor

#1 Harder To Grow Exponentially

If your main revenue is only from insurance or investments, you only have income fees from one type of product.  Your revenue from the beginning and as you grow won’t be as diverse as it would otherwise be, and you’ll need more product revenue to make up the difference.  If you’re looking to grow your career at a faster pace, or investment back into your business, two revenue streams are better than one!

#2 Need More Clients

As mentioned above, if you only provide insurance or investments, you are earning less money per household. Depending on your goals, you will need more clients to make more money. This will mean more prospecting, more time spent, and more frequent transactions.  Ultimately this means that you’ll have more policies or accounts, and your client service model will need to scale for this.

#3 Consumers Want One

By the time most consumers hit middle age, they have a few transactional insurance or transactional investment advisors in their life.  These transactions left the client responsible to organize and advise themselves.  To avoid juggling with multiple transactions and multiple agents and advisors, most consumers want one financial advisor in their life.  We think that consumers are constantly looking for that one, financial advisor to lead them.

Ask yourself, what would you want as a consumer?

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Why Should You Focus On Both Insurance and Investments In Your Financial Advising Career?

Maybe you didn’t realize that you can have it all – you can choose to be both an insurance agent and an investment advisor. And you can do it well.

You can choose to be a mission-based, consultative financial advisor.  You can act that way with every client encounter, and build a practice around this way of being. 

What does that mean for the trajectory of your career?  In a practice where products follow strategy you will delve into every aspect of your client’s financial life – savings, cash flow, investments, retirement, and so on, offering them financial balance that is customized and robust.

By doing so, your career becomes more than just making money. Maybe your practice is built on a meaningful mission where you are everything to your clients.

What Does Planning Look Like As A Financial Advisor At Consolidated Planning?

As a financial advisor at Consolidated Planning, you focus on clients first and from the first meeting – not insurance or investment transactions first.  You will be a planning process-based advisor for either personal planning, business planning, with an aim to organize your client’s financial world, and protect what’s important, focus on their financial future.  You will become more referable.

Being a part of our mission at Consolidated Planning means helping 125 families or businesses with their planning over your first 5 years.  If you want to be a financial advisor in this way, then your beliefs around the client experience will resemble ours, and we can thereby support you in ways not commonly found in the industry.  You can also build a planning practice, not just sell.

Your career will emphasize financial strategies as a whole for your client – product offerings will be coordinated and integrated into an overall plan. Further integration of products and services is seamlessly delivered through The New Business Hub team, The Marketing and Practice Administration team, and The Advisor Performance Group, all available to you as a financial advisor at Consolidated Planning.

If you want a financial advising career where you’re building a balanced practice through delivering a balanced plan for your client, Consolidated Planning might be a good fit for you. If you’re still undecided if offering a planning approach is right for you, reach out to a recruiter to discuss how Consolidated Planning is different.

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2022-148210 Exp. 12/2024

Published:  December 30, 2022