Insights of a Peon: A business management journal: Change or Die: An Open Letter to the Financial Services Industry

Dear Industry CEOs, Presidents, General Agents, Boards of Directors, large-sum Investors, Sales Managers, Managing Directors, FINRA, NAIFA, and anyone else who gives a rip about where this business is headed:

I don't hate you. I've worked for you, with you, under you, around you. I've watched many of you succeed strongly at what you do.

I've also seen many producers fail and leave the business, frustrated, jaded, and unable to make a decent living. I've even seen some of you make fun of these people, like they're worthless pieces of trash whose clients are to swooped up and transferred into your own book of business. Nonetheless, I get that you're all just trying to make a living.

I understand your products, your planning tools, and your mindsets and theories. I know how life and disability insurance work, what investments do, how to plan out someone's retirement, and who needs your services.

I grasp that each client needs planning done individually, differently for every family's circumstance, not in a collective "this-is-always-the-right-answer-for-everyone-all-the-time" way.

I don't think Hollywood entertainers, such as Dave Ramsay and Suze Orman, understand the major concepts behind the purpose of your industry.

I understand basic and even some advanced compliance, from a legal and a corporate standpoint.

But there is something else that I understand, that most of you don't yet grasp:

Young people don't care about you or your services anymore.

Young people don't think you offer as much value as you used to offer.

Young people are embracing a very different way of marketing, communication, and general product selection. The biggest, most different way is through social media.

This is a result of many of you and your companies having yet to embrace this concept and putting it to work in your business, your agencies, your practices. You don't allow your agencies, your agents, or even those who broker your products (and please notice I didn't make these brokers a possessive noun) to use social media to advertise your products and services.

If your company does allow some social media, you insist that they use "cookie cutter" molds, if anything. You allow for little to no creativity.

They can't even use words such as "like" and "share" in any post, if any are allowed in the first place, because this is "marketing."

In a day where "call to action" social engagements have become the rule...

...this backwards way of thinking is a major hindrance to financial services marketing.

Allow me to discuss a principle I learned from the mouth of a great man, who goes by the name of Clayton Christensen. As a young college student, listening to him teach us, what he said made sense (and things making sense is not something to which your industry should be a stranger, but when it comes to social media usage, you certainly are).

Mr Christensen invented, or perhaps just named, the theory of Disruptive Innovation. As explained by him on his website, products and services initially take root in simple applications at the bottom of the market and move up relentlessly until they dominate. (I recommend Gladwell's The Tipping Point to help you more fully understand this concept, because while it doesn't have much to do with business, it has everything to do with business, particularly the financial services industry).

This is a very simple concept to understand. Mr. Christensen also helps us understand that companies who do not take the step of creating a separate department to deal with these changes will eventually go out of business.

I submit the following:

Social media has disrupted the marketing industry.
The financial services industry has not yet embraced this disruption, and is in strong denial of it's effective use for marketing purposes.
As a result, in an industry where many working in it are getting older, and most of whom are baby boomers, the financial services industry will cease to exist on an effective, individual, direct-selling model that has driven it so hard for so many years.
To avoid this, you must either "go up" or "go down" in your marketing tactics, by using the same means your competitors, the brokers and the banks, are using to market themselves.

The days of cold phone calls and direct mail are over.

Mellinials throw any mail that isn't a bill or a personal letter/invitation away (and even some of that can hit the garbage from time to time).

The pay their bills online. Many don't even use pencils or commas anymore (or even be able to tell you when one is necessary).

In such a transformed world, there is no reason for your industry to be so behind the times. As the baby boomers have started retiring, and the new generation X is stepping into their role, I urge GenX to look to GenY and the Tweeners to gain some real insight about how this all works.