New Year? Let’s Look at the Three Lessons the Data Teaches Us About Top Performing Financial Advisors!

Happy New Year! Let’s Talk Data

So, the Finaeo platform has been out for about six months now, and with the New Year just getting started, I was trying to think what I could write that would be truly valuable for financial advisors dealing with insurance (or insurance brokers, for our American customers). And, you know, we’ve been out on the market working with a ton of advisors over the last six months. Yet, to this day, after over a year of writing content targeted at younger advisors (and just those who are young at heart), I still feel like there’s very little practical advice for how to grow and build a business. If I were a new advisor, I know I would struggle figuring out what to do and how to do it. And while we’ve been working closely, coaching, and mentoring many people who are new or a few years into the industry (after all, our in-house guru, Donald, grew his business to 7-figures before joining us), I still believe that public content is the best way to reach the tens of thousands of people who are new to insurance advice. It’s just a ridiculously scaleable way to reach people.

But why is there such a dearth of valuable information? At the heart of this problem is data. More specifically, the issue is a total lack of data. See, in my last two years in this industry, one thing I’ve noticed is that most advisors tend to be rather solitary. They are hunters and lone wolves. They hunt on their own and believe in personal, one-on-one relationships. The corollary, however, is that most advisors tend to be private. They’ll mentor the occasional junior, but beyond this, they tend to avoid sharing. After all, why compete with others?

But, luckily, I get to be a fly on the wall of this industry. I’m not a licensed financial advisor – instead, my goal at Finaeo is to work with such people and help empower all of them. I want to help advisors grow their books of business. So, as I was debating what to write for this New Year’s blog, I realized I was sitting on a mountain of gold in the form of data. See, the Finaeo platform aggregates a ton of data from our users. We have great insight into which advisors are generating the most premium, and what actions / habits they tend to have. So, on a whim, I started digging into the data. Now, note that I’m not talking about private client data – this is about aggregated patterns. My question was whether I could discover the habits of highly successful advisors.

And did I ever! To get this answer, I focused on our top decile of performing advisors

So, without further ado, the three big lessons the best advisors on our system taught me:

  1. Top decile advisors have more prospect touch points than almost everyone else (except for bottom quartile advisors)
  2. Top decile advisors focus on lead gen but also learn to get rid of prospects who are time sinks.
  3. Top decile advisors are more holistic and understand the value of cross-selling.

The data

Before we get started, let’s talk a bit about the data. To get to it, I first sorted my advisors by the amount of commission they were estimated to close in 52 weeks. If an advisor had been with us for 26 weeks, and had closed $25,000 in commission thus far, we assumed that they would close $50,000 in a year. Likewise, if an advisor had been with us for only 13 weeks and had closed $10,000, I estimated they would close $40,000.

Once I had these numbers, I broke the data out into a top decile (top 10%), and overall quartiles (0%-24%, 25%-49%, 50%-74%, 75%-100%). In the end, I had 220 advisor data points that I trusted. I removed a few where I wasn’t certain the advisor was really using our system regularly to stay on top of everything. I also only looked at individual insurance products, as I knew that group benefits / policies would heavily skew results.

So, notice that the average commission per advisor using the Finaeo system was $53,537. The top 10% on our system just broke $100,000 for individual insurance. Meanwhile, the bottom quartile were on track to earn $33,209 on average.

Now, a few caveats. First off, this is a self-selected bunch. All of the advisors whose data I have access to are those who were organized enough to use the system regularly enough. If an advisor doesn’t use the system, I simply don’t have access to their knowledge.

Lesson #1: More is More for Top Quartile Advisors

Take a look at the following activity graph:

This chart was taking a look at how many notes and tasks an advisor does an average for any given individual insurance prospect. These were people in the pipeline who had yet to close with an advisor. And there were some interesting and clear patterns. The top decile of advisors were the most active, doing an average of 5.43 tasks per client, and writing 4.12 notes per client. This came out to be the most tasks for any group, and the trendline was clear. The more tasks an advisor did for a prospect, the more likely an advisor was to be in a higher percentile of commission.

This makes sense. The advisors who are absolutely killing it are the ones who understand that insurance is a relationship business. These advisors are the ones most likely to do more for their clients – from birthday cards to follow-up calls. They set up follow-up tasks, they set up reminder tasks, and they stay on top of their clients through tasks. Notes also somewhat followed this trend. This may very well be because the top decile are having more meetings, calls, and emails with their clients and, thus, writing more notes.

Interestingly, the bottom quartile seemed to be a bit of an outlier. Now, this may have been a quirk of the data (though we do have enough data points to be considered statistically significant). However, I believe we’re seeing something else. A lot of our lower commission advisors are those new to the industry. While they’re yet to establish their practices and are still learning the ropes, they are hungry. As such, they seem to be following best practices – they are doing more tasks than the second quartile, and writing more notes than anyone else. Again, the notes part is most interesting. Perhaps the bottom quartile are more likely to communicate at length with clients. This may be due to a few reasons:

  1. New advisors are not yet confident and believe that they need more touch points to close a prospect
  2. New advisors are less likely to cut out prospects who waste their time
  3. New advisors are using more fluid conversation tools such as Facebook Messenger, meaning they have more quick and easy touch points that are being chronicled in notes.

So is there any way to figure this out? Well, maybe.

Tl;dr – Top decile advisors do more tasks and write more notes (likely meaning they have more touch points) for any given client. In other words, more is more!

#2 Top Percentile Advisors Have a Good Lead Pipeline, and are Quick; Bottom Quartile Don’t Cut Tire Kickers

To try to make sense of the note-taking issue from above, I decided to analyze two things. First, I wanted to know how many open opportunities each quartile had. Second, I wanted to see how long it took a prospect to go to close (whether they closed the prospect or lost them). The results below:

So, there’s a few things worth noting here. First off, we see a bit of a U-pattern in the number of open opportunities. The bottom quartile has the most open opportunities, followed by the top decile. The third quartile have the fewest. So, we’d expect good lead pipelines for the top decile – more leads mean more prospects mean more closes and more commissions. But what’s going on with the bottom quartile (and, to a lesser extent, the second quartile)?

Well, look at the time to close. Here we see a slightly more expected pattern. The top decile are fast. They get prospects to either a win or lose, fast. Meanwhile, our bottom quartile advisors took almost twice as long to close. I believe what we are seeing here is that top advisors know how to get rid of tire kickers – the type of client who wants to waste your time but never sign a policy. Because of their velocity, they are pumping through opportunities twice as fast. If they moved as slowly as their bottom quartile companions, we would expect them to have almost double the number of open opportunities at a time. In other words, our top decile advisors are doing two things amazingly:

  1. They are building a great lead gen pipeline
  2. They are qualifying prospects quickly and getting to yes or no faster than anyone else.

This also tells us that new advisors, or at least those in the bottom quartiles, are either taking too long to close a qualified prospect, or are wasting a lot of time on prospects who will never close. I suspect the latter is true – it would explain why they have so many open opportunities, but such low commission.

Tl;dr – Top decile advisors build strong lead gen pipelines and are quick to close prospects; bottom quartile advisors are not getting rid of tire kickers fast enough.

#3: Cross-sell, cross-sell, cross-sell!

The final big lesson the data shows us about advisors is that the most successful ones are cross-selling products:

So, no massive surprises here. Just an important lesson – the most successful advisors cross-sell multiple product lines. The least successful advisors mostly sell one product line. Superficially, this makes perfect sense. If you sell more products, you generate more commission and are more likely to go up in quartiles.

However, underlying this behavior is something else, I believe. At Finaeo, we build bionic advisors. And one of the things we really stress is that the future of financial advising will center around coaching and holistically working with a client to succeed. My belief is that within ten years, the transactional insurance salespeople are going to be gone. After all, transactional insurance can be done by technology pretty easily. The advisors who will succeed are the ones that really understand how to help their clients with all things financial – from planning, to wealth, to risk management. The future bionic advisor is a coach, therapist, and financial quarterback all in one.

Overall, then, what we’re seeing here is that current advisors who are treating their clients more holistically are also more likely to succeed. That is, advisors who sell multiple insurance products are also likely the ones who are taking care of all of their client’s needs, instead of just transactionally trying to sell a single product over and over again. Notice that this ties in strongly with learning #1, whereby the top decile of advisors also seemingly had more touchpoints with their prospects early on. You need to spend more time building relationships with your prospects if you plan to create an entire plan for them, including multiple products!

Tl;dr – The best advisors are more holistic and cross-sell products to their clients


As such, let’s quickly think about the lessons we’ve learnt about top decile advisors:

  1. Top decile advisors spend more time with their prospects and do more for them versus the average advisor.
  2. Top decile advisors, however, also know how to strike when the iron is hot and close fast. They combine this with a strong lead pipeline to consistently generate more commission.
  3. Finally, top decile advisors are the most likely to have taken a holistic approach and sell multiple products to any given client.

We should also consider a few learnings from our bottom quartile advisors:

  1. More touch points are only worthwhile to a point. If you are meeting with clients simply to build your confidence because you are too afraid to make the ask or close a sale, stop! Clients are willing to buy with a shorter sales cycle than you think if you are confident.
  2. Be willing to get rid of the tire kickers. Cut people out who are wasting your time. Otherwise, you’re going to continuously be underperforming.
  3. Use your meetings and touch points to really understand your client’s pain points and devise a strategy that helps them. Cross-selling insurance products will help your client’s risk mitigation and help your bottom line.

Curious? Want to learn more? Well, come work with us as we build the world’s first digital agency for financial and insurance advisor.