Money Maverick has been super swamped with work. The idea of writing more about work at the moment (insurance, investments) might drive him a little crazy. This is a more personal, business related general article. I hope you enjoy it. Dressed a little nicer with a blazer and sharp shoes, I looked across the sofa at the much older prospect with a little anxiety and trepidation.
I felt 25 and new again, rather than someone who had borne far more than 10000 hours in my chosen profession. Most people will do a tremendous amount of due diligence on me before approaching me, including my readers. As a result, I never have to impress upon them the idea that I don't know what I am doing. They already know what I am good at. My word has credibility. But this was different. This was a prospect who I approached almost 4 years ago as a greenhorn. I got shot down, not spectacularly in a hail of flames...
...But quietly and painfully, like the nobody that I was and the nobody that I seemed destined to be. And right now, I was desperately trying not to let that feeling get in the way.
"Oh," he uttered, "MDRT? Congratulations. You've grown a lot."
An impressed smile formed on his face, the first smile that he's formed all day.
And I'm not dumb.
"I am a little better than before," I point out. "And I'd like a second chance to seriously work with you."
Did that do it? For a moment I think so, but then...the frown on his face appears again.
"Now my question is - will you be too busy to service me?"
There's just no pleasing some people.
...He did have a point though.
What is Saturation?
Have you ever felt a Business - for example, a big Bank or something, provided such crappy service to you as a client because they knew that they could afford to treat you that way? That's Saturation Risk.
Saturation is what the client above described - the risk that a Financial Consultant may not have time to service you effectively.
Some classic Financial Services that a consultant should provide are the following: a) Financial Assessments on your current policies and a clear outline of the benefits
b) Expediting of claims or administrative processes in relation your policies
c) Risk profiling at different life periods and adjusting portfolios (insurance, investments or otherwise) for them
So on and so forth. Some of these things can take quite a bit of time. (B) in particular is almost expected, even though there is absolutely nothing in a contract that requires your consultant to legally do your claims for you.
But Luke, you might say - this sounds quite unrealistic.
It is desirable to provide these services in the long term from a business standpoint - to retain clients, to keep them happy, etc. Why would a consultant ever let it get to a point where it was so bad? (saturation). ...But you also try to imagine some consultants with like 300, 500, 1000 clients. One re-balancing of portfolio could take months. Is it that much of a stretch to suggest that they might be too saturated to serve you effectively?
An Objective View
I'd never thought I'd reach a point in my career where I actually have people worry more about saturation then about me leaving.
From that sentence alone, you can see some pros and cons between a consultant who isn't inherently in any danger of facing saturation vs one who may be facing one.
You may notice that there is some correlation between the behaviors of older, experienced agents vs younger agents as well.
Of course, this is simply my opinion and only a general one.
For example, in the 'Not Saturated' category it says that they are more likely to prioritize you, but I could also argue that someone experiencing saturation would have enough business to prioritize you effectively rather than chasing sales.
Some Thoughts About Engaging A Consultant Who Faces Saturation
...Or more accurately, people who are approaching saturation.
Some ways that I have been avoiding Saturation are
1) Hiring people
Any good business starts to outsource various aspects of their work out. It was really challenging at first and I think that everyone on my payroll will agree that I am not like...a super great boss.
But I do have jobs for my rotating PAs (personal assistants), designers, web content, web marketing...and recently, for my research.
I dislike outsourcing research because I actually enjoy it, but I have to focus on the clients. If Bobby Axelrod can hire analysts, I have to as well.
2) Being selective about clients
This is a first world problem, but wholly necessary. There are clients who pay peanuts but demand the world from you. As an inexperienced consultant, you probably wouldn't reject any kind of business. But after some experience, you start to realize that time and emotional stability has a much higher financial value than you thought.
So it becomes necessary to select clients because there's a decent chance you'll be working with them periodically for decades.
3) Eliminating inefficiencies in my system
At a certain point, you have to be able to clear paperwork quickly have back up plans and not go back to the clients with as many mistakes.
Even after years of practice I have these issues occasionally. But they were much more prevalent before, and that burnt up time that you need to service clients with.
4) Expanding the business
Ultimately it comes down to efficient expansion of the business.
Countless businesses have failed not because they sucked, but because they couldn't meet the demand. The operational costs, the declining quality and the health problems associated with poor expansion (or very often, ZERO expansion plans) would kill what could have been a fruitful business.
If you're choosing a consultant who is at a high level, like MDRT or COT, its reasonable to ask them about Saturation.
How they address it will tell you a lot about what you can expect from them in the future.
Conclusion: Yay or Nay?
I actually started this article to write about the dangers of Saturation, but as I continued writing I noticed that this was useful for other consultants, or business owners who are facing some of the problems that I wanted to warn against. Sometimes I worry about the state of the business.
People fear their consultants leaving (especially if their business isn't sustainable)...
....But now when your business is sustainable you face Saturation Risk. Blah.
I take comfort that these things apply universally, not just to Financial Consultancy.
For consultants, I'd suggest (and strictly my opinion) looking at your business model if you have the good fortune of a sustainable business. How do you prevent saturation from creeping up on you?
For consumers, I'd suggest (and strictly my opinion) deliberating more with your trusted advisor about the scope of services you expect. While some general services are expected, you may have additional or different expectations.
Good luck out there. I'm going on staycation! (Again.) Money Maverick
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Money Maverick is a Licensed Financial Consultant with MAS, who specializes in Investments and Critical Illness Insurance.
The views on his blog are strictly of his own opinion and have no affiliation to any of the companies he works with.
Here are some of my resources on:
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4) Spending and Saving: The Biggest Spending Mistakes You DIDNT Even Know you were Making (and how to avoid them)
5) Job Assessment: A Case Study on How a $6k/mth Girl makes MUCH more money than a $10k/mth Guy
6) Financial Optimisation: How I Avoid the Largest 'Fees' of All
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