Managing The Middle Market
Guy E. Baker
October 2017

Over the years, the insurance industry has evolved to help agents suit the needs of their diverse clientele. Agents are now more knowledgeable and have adopted well-rounded financial planning skills through access to improved products and tools. Products have adapted to suit clients’ increased needs, and lend flexibility to financial planning. Modern products offer better returns, benefits and options and come together to create financial plans that empower clients to achieve financial goals and stability for a more meaningful life. 

Not only are products more effective, they can be combined and used to creatively shift clients’ financial security net as their lives and needs change. For example, a permanent life insurance policy will not only pay a death benefit, but also fund a long term care policy premium if needed. It’s probable that most clients will require long term care at some point in their lives, and a well designed policy provides peace of mind and security. 

An adage I encountered early in my career holds true for some: “Clients don’t hate insurance policies, they just hate paying for it.” Some agents feel this is especially true for clients in the middle market, and avoid prospects in the $35,000 to $100,000 income range in favor of higher commissions. Too many advisors would rather pursue wealthier clients where they stand to make ten times more. At first consideration this makes financial sense, but many advisors are missing the bigger picture: Availability and volume of middle market clients.


Strength in numbers: The power of the middle market
Although wealthy clients are target prospects for most advisors, they’re grossly outnumbered by prospects in the middle market. Not only does the middle market have a greater number of clients to choose from, their financial landscapes are often a blank slate with few existing investments or portfolios  to compete against. 

According to a recent study by the Million Dollar Round Table (MDRT), even Americans that may seem financially successful on the surface are underserved in financial planning.1 While nearly half have retirement savings accounts or savings plans, one in four only contribute once a year or less. Even fewer are financially protected against emergencies. Only 20 percent of Americans are covered with short or long term disability insurance, and less than 39 percent covered believe it would be enough to pay for long term care and medical expenses in the face of an accident. 

Currently there are too many agents prospecting in the upper market, where there are not many clients to go around. It’s rare to run into competition, as the market at large is vast, but in the upper market with finite clients that’s not so true. Ultimately it’s all about relationships. 

Advisors who wish to increase their income have two options: Serve more clients or make larger sales. The most effective solution is a combination of the two tactics —to increase both the volume and size of sales, which is not necessarily easier said than done. 

A shift in the advisor’s mindset is key to attracting clients and building trust. Many advisors focus on their services as blanket solutions, rather than focusing on the individual problems they solve. Prospective clients are willing to purchase these solutions only after they believe they will solve their problems. Keep in mind the common financial problems clients worry about—sufficient retirement income, long term care, budgeting, etc.—and offer solutions aimed at easing their pain. Once the dialogue is open, clients will feel confident you can lessen their burden and will do whatever it takes to minimize the financial pain. 

Too many agents have forgotten what initially drew them to this industry. I came into the business to help people; to give them hope and a vision. The power to sit across from a couple who are scared and hopeless and help them see a path to financial success is the most rewarding part of my work. Every advisor has the ability, but not all use it. Wealthy clients are financially rewarding, but the financially vulnerable are the foundation of this business—too many of us have forgotten our roots.


Questions to empower the middle market in financial planning
There are three basic questions that every client must answer, and they’re especially important for the middle market. The answers to these questions will reveal their goals and concerns, and provide a concrete path to guide the financial planning process. I’ve found showing middle market clients how to implement solutions and tactics to achieve their goals is a great trust building experience and deeply gratifying. 


Question No. 1: What’s your number?
Based on Lee Eisenburg’s book, What is your Number, clients must have an idea of how much money they’ll need to live the rest of their lives. According to the Transamerica Institute of Retirement, 85 percent of Americans don’t know the answer.2 As needs change over time, it’s not a simple question to answer but is the first step towards planning. 

This is a major pain point and financial barrier for many Americans that can easily be solved. With the power of a computer, every insurance agent can become a wealth advisor and help clients figure out how much they need to have at retirement. For some, this number may be unattainable. With a tangible goal in mind however, many clients are determined to reach the benchmark or land close to it. 


Question No. 2: How will you reach your goal?
Once the target number has been identified, the next step is to carve out the path to achieve it. How much does your client need to save before retirement to achieve his or her number? At its core, this stage is a math problem that is often intimidating and confusing to the average American. 

As advisors, we have the tools to educate middle market clients and show them how to attain their goals. In addition to assisting with investing and retirement-specific products, we can help develop strategies to financially protect clients against inevitable health risks that threaten to deplete savings. 

Even if clients cannot reach their goal exactly, they are likely to be much better off after planning than if they ignore retirement completely. Most people are in denial on these issues. As wealth advisors we have the skills, the tools and the knowledge to help millions of Americans overcome the retirement crisis.


Question No. 3: Do you have a process in place to plan?
Question three is probably the most difficult. Do your clients have an investment process that gives them the highest probability of achieving their goal? There is no one solution or answer that works for everyone, but rather a unique solution for each client. 

The insurance industry has given agents myriad tools that can help our clients solve these problems. Where insurance is not the solution, the agents need to either find other solutions or align with advisors who can help. The middle market is a field ripe for harvest, but needs a leader to help clients find the best solutions for their unique situations. 

Working with the middle market is not about how much money we make as financial advisors. If we have enough activity and do the right job, the money will take care of itself. This is about doing the right thing, in the right way. It is about using the years of experience and wisdom we all have gained from seeing success and seeing failure. 

It is my hope that we can marshal an army of advisors who are committed to help clients deal directly with the problems of life. We all know that people either live too long, die too soon, or become disabled and are unable to meet their financial obligations. The attorney, the CPA, the stock broker—all well-meaning and excellent professionals—are ill-equipped to deal with these issues. Only we, the insurance agents, have the tools, the knowledge and the wisdom to be able to help our clients through these perils. The question is simply, are you doing what you were called to do?


  2. workers/tcrs2016_sr_retirement_survey_of_workers_compendium.pdf 

Author's Bio
Guy E. Baker
MSFS, CLU, is a 47-year MDRT member with six Court of the Table and 39 Top of the Table honors. He qualified for MDRT his first full year with Pacific Life, first qualified for Top of the Table at age 32, and served as president in 2011. He has been a registered investment advisor since 1993, working to solve clients’ retirement issues. An author of many books as well as an internationally known speaker, Baker is completing a Ph.D. in retirement planning and investments through the American College. He is a member of the first cohort. Baker can be contacted by mail at 15520 Rockfield Blvd., Suite G, Irvine, CA 92618. Phone: 800-858-4332 or 949-900-0099. Email:

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