Will connectivity mean the end of the independent broker???

Information is power; Knowledge is the application of power; don’t be powerless.

These are the few words summarizing the soul of my blog. But what is the message I am trying to convey? First I am stating that information is different than knowledge. Being informed is different than being knowledgeable. Informed choices are different than knowledgeable choices.

Information versus Knowledge

I always said that the simplest way for a time traveler to travel into the future is to read and learn about the past therefore avoiding all of these wasteful time paradoxes….

In the old distribution model, the advisor was the main portal for accessing information and as a result he could be considered a gatekeeper. Before the internet, if you wanted information about insurance you had no choice but to call an insurance agent. Information access to insurance was therefore very linear with client calling advisor and advisor calling back client. It was strictly a two dimension model. But since most people don’t like to deal with insurance, they would procrastinate in calling or even conveniently forget to call an insurance agent. As a result, the sale model was based on a P2P connection. No I am not talking about Peer 2 Peer connection. I am talking about Predator 2 Prey connection where the insurance agent is a predator who would stalk a group of 10 clients in order to get his one prey. Commission, marketing and distribution were designed to sustain this P2P connection which was very costly to maintain.

Two things happened to this traditional sales and distribution model. First, cost control led to the emergence of the independent broker. It is important to understand that the client never asked for the insurance agents to be independent and sadly as we will see in my future texts, the independent brokers have been unable to define the value of this independence in the marketplace.

This change towards independence did not come from the insurance agents. This independence was imposed by the insurers and it was strictly based on a cost/benefit analysis. While this was happening, the internet was starting to emerge leading to a democratization of the information pathways. The internet opened the world of information removing the old gatekeepers but it is the search engines particularly Google which democratized that world. This meant that the insurance agent could not be a gatekeeper anymore. If your business model is about information control, you are redundant. You are out of business; and you just don’t know it yet.

In the information age, as an agent/broker/advisor you have to accept that your client maybe better informed about financial matters than you are. You cannot feel threatened by this. You have to understand that while the client maybe better informed because he is a wizard with his search engine it does not mean he is more knowledgeable.

And this is why to survive in the social economy, first you have to be able to make a distinction between information and knowledge and second you have to be able to connect your knowledge to this economy by being able to define and demonstrate its value.

For me knowledge is information transformed into skills through the process of education and experience. If you want to see knowledge into action then you have to see this video about Tiger Woods best golf shot. That’s what a professional can do and achieve through his knowledge. You all probably know about the 10000 hours rule where to become a professional in any field you have to invest a minimum of 10000 hours. This is the type of investment required to gain professional knowledge.

But I am hearing your objections now. What about Tiger Woods’ talent? I did not want to talk about talent but now that you have asked…

Yes you do have to consider talent because human nature does not like to be reduced to a set of number. As a result, human nature has to throw us a curve by including in our scientific world something that can be observed but cannot be determined or measured. So yes Tiger’s Wood talent enabled him to pull this golf shot but it is his knowledge that allowed him to create this golf shot.

One of the best stories about talent versus knowledge/discipline/experience is the battle of Hunt versus Lauda on the Formula 1 race circuit. There are many lessons to be learned from these two men.


In the end talent is also a double edge sword as it is often the perfect excuse for the undisciplined mind to quit and a reason not to achieve anything.

But let’s come back to insurance. In the sale of insurance, there are two types of salesman. First there is the natural salesman. I know them well since I have worked with the most talented salesman in the insurance industry. I envied them because selling is so natural to them which was not true for me. I was what I call a knowledgeable salesman. Not having the talent, I built my skills based on my experience accepting that the only way to learn was through rejection and failure. When you live of commission, this knowledge comes at a very high price and the first five years were very lean years. But in the end it paid off. For example, I was in a sales meeting with one of the most talented advisor I knew. What was at stake was a sale of more than $300 million of insurance. This talented salesman almost destroyed that sale but I was able to save it through my knowledge. In the end, the client was looking for advice which is different than selling a product.

Here is a fact for you. When you deal with advice, talent is of little value. Good advice is not based on great talent. It is based on great knowledge.

So here is the question that only you can answer. Are you primarily a salesman (product pusher) or an advisor (need and want prospector and solution maker)?

If you are a salesman and there is nothing wrong with this, you are then simply an intermediary between the manufacturer and the buyer. This means that your value will be defined by technology and by others. If the manufacturer can now deal directly through technology with the customer, you have become redundant. You can however state that insurance will never sell itself and that there will always be a need for salesman. It may be true. However I believe and I will prove that connectivity means the end of the independent salesman/broker in the insurance industry.

If you are an advisor, then your fate is in your own hands. You will define yourself. The question is how. How can you connect to the social economy by commercializing your knowledge? How do you become a connection node and part of the network? These are some of the questions we will study and try to answer.


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