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Quantum Leap Podcast with Mike McGlothlin
Justin Michael Vendor Neutral's Sales Futurist
Justin Michael

How Sales Technology is Making an Impact in the Financial Space

Episode 6 -

Mike McGlothlin

Executive Vice President-Retirement, Ash Brokerage

Listen as Justin Michael and Mike McGlothlin from Ash Brokerage discuss how sales technology is impacting the financial space today and in the future. How legacy industries are adapting using sales tools, and the four demographics that will affect the financial space in the future.

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Justin Michael Welcome back to Vendor Neutral in the Neutral Zone. I am Justin Michael doing my best William Shatner impression. We have Michael McGlothlin, who is an Executive Vice President for Ash Brokerage. He’s here to help educate us on the fintech space and digital transformation. Michael, how’s your day going?


Mike McGlothlin It’s going good. Thanks for having me. I appreciate the opportunity to speak with you.


Justin Michael Yeah, I’m excited about this. So, your approaching retirements and digital and selling and kind of helping to revolutionize the space. Can you tell me a bit more about what 2020 has meant to you and what you’re working on?


Mike McGlothlin Yeah, for us, twenty-twenty has given us the opportunity to buy more market share. About 18 months ago, we embarked and really went all-in on some video technology using Allego platform, and that really got us ahead of the game. We clearly bought a lot of market share when you benchmark us versus a lot of our peer carriers and peer brokerage general agencies, as a wholesaler, we think it’s really important to continue educating the advisor that will ultimately educate the client on how to better plan for retirement. And we’ve seen a lot of people that did not watch this at all or did not follow us and because of that additional education that we have out there through the video technology, a lot of people are gravitating to us that maybe weren’t familiar with us. So, I would say that through the pandemic and again, our products are priced at a 10-year Treasury rate of like 60 to 70 basis points for most of this year. So, it’s not that we’re the most popular product, but we certainly have earned a lot of market share because the education that we’ve delivered through the digital space.


Justin Michael I would like to understand overall how you feel your industry is changing, right? We’re talking a lot about digital transformation and sales technology sometimes in legacy industries this is very hard to do. What approach are you taking that’s differentiated?


Mike McGlothlin Yeah. So, I would say in the financial services and insurance space, it’s like turning a barge around in a river as opposed to a speedboat ride. You know, it’s just a slow-moving industry, as you indicated. So one is, is that we’re really trying to force our carriers to get on board with some of the things that are very client-centric in terms of ease of application, you know, especially in the life insurance space, you’ve got to go out and you’ve got to give some blood, you got to give some urine, and you’ve got to give up all your personal medical records. We’re trying to streamline that and make that a lot easier. We’re also making sure that through the application process that the advisor has the tools and the knowledge of underwriting that they can go to the correct carrier and get it right the first time. There’s nothing worse than going through all of that minutia then all of a sudden you may not apply for the preferred rate and it may be worth paying an extra 10 dollars a month knowing that you’re going to be able to get it right and you won’t have to go to that bad experience. The same thing on the retirement side. Our applications now or thirty-five pages long. You know, you just don’t want to sit through that. And so, we’re really working with all of our carriers to make that a seamless process. But even before that, we’re trying to help our advisors make better selections in a best interest standard by having different software packages that flow through and it becomes seamless and speeds up that process because certainly with the pandemic and working in a more virtual world, it’s slowing down the sales process and anything we can do on the back end, and in the discovery, phase can help maybe accelerate and get that sales process back to a normal and a typical cycle.


Justin Michael Yes, advice on that is important, I think, because we’ve seen reply rates on emails go down. The phone is still on fire. My question is about social media. Some of these industries, folks are either not on social and they’re not as comfortable talking about this stuff on social. LinkedIn has moved from site number thirty six to site number 16, which is a logarithmic move. It’s not just, you know, 30 basis points, but just like in the front page of Google, it’s getting up there. Reddit’s number four. How are you leveraging modernized social platforms? Is that working for you? What tips do you have for folks listening to adapt to the new outreach?


Mike McGlothlin Yeah, I would say that our sales teams are adapting. And again, what we’re trying to do is use a video platform that gives us analytics besides relying on LinkedIn. Some of our top salespeople have actually created some things in conjunction with LinkedIn of a video library. So, they’re known in their territory for Social Security education, and so they have put out five or six videos for that advisor to go in and view. Some of them are actually client approved where they can copy and paste into their own email. But it’s all delivered through a LinkedIn profile where they’re LinkedIn and they have access to additional information as opposed to just a typical post. So, we’re trying to get deeper with those. But most importantly, it goes back to blocking and tackling that you have to be present. You have to be front of mind with everybody and the consistency and regularity of being in front of those advisors via video is really, really helpful for us.


Justin Michael If someone is just starting in this profession now, what would be your advice? We talk a lot about future-proofing these skill sets, and mindsets because it’s almost like in two years and five years, the pace of change is so drastic. How do you prepare for that? That’s a certain wisdom. And what actions can you take now? Is it what you’re reading? Is it what you’re doing? There’s been a boom of e-learning. How are you approaching that with your teams?


Mike McGlothlin Yeah, so we are big on continuing education far above the state minimums. Many of our retirement specialists have their retirement income certified planner designations or professional designation. That’s one part because you have to stay involved in it. I also serve as president of the Society of Financial Service Professionals, which is a multidisciplinary professional association where advisors can sit with their CPA on one side, their estate planner on the other side, as well as their property and casualty professional, see the same thing about a changing tax law or how an example may be how the election may affect certain client tax rates. Then we all get together and we say, OK, which clients are we going to help the most by this information? And then we go out and we share client bases and have joint appointments. It’s that collaboration that’s really important and we live in the most complex world now, especially when it comes to retirement income planning, and that collaboration with other professionals, the ability to share that information is really super important.


Justin Michael Here’s a great, great question, right? It’s the myth of like, will this generation be able to retire effectively? My grandfather worked til he was 93. Well, he is a real estate investor. He loved it he told me, so I don’t think it felt like working, but I don’t think he had to work, but I think people are worried. There’s fear of the cost of living and Social Security and are we going to be able to retire if we want to? You know, what’s your stance on that? And how are you helping people plan for that? There’s a lot of uncertainty in the economy, in the markets, and I guess every generation says that we’re in a particularly weird hundred-year phase here. How are you? Are you coaching your prospects and how is your team dealing with this?


Mike McGlothlin Yeah. So, we think that there are really four large demographics that are affecting our industry for the next two decades. One is that Americans have not saved enough. The savings rate is typically been below five percent for long-term savings. We’re misusing Social Security, taking it early, then the other thing from a funding option, is that we are due to the pandemic, looking at moving up the reduction of Social Security from two thousand thirty-five to two thousand thirty-one. So, expect a twenty-four percent decrease in your Social Security, and 90 percent of Americans use Social Security as their primary source. Third thing is, is we’re losing defined benefit plans and guaranteed income through companies left and right, and finally, we’re living longer than ever before. The average American is living 25 percent longer than what they had planned for during their working years. What that means, Justin, is that every financial planner and every American is going to have to generate more income for longer periods of time with the least amount of assets than ever before and that’s going to haunt the financial services industry for the next two decades. We have to get advisers to behave, act, and think differently, and ultimately, we have to get clients to behave, act, and think differently. And that doesn’t mean that they have to do any sacrifices, but they do have to manage their money differently. They have to think about different things, and that’s where technology comes in in terms of the video education. It also comes in where we’re trying to help advisors identify clients that are in those early years because your largest risk is the first five years of retirement. If we can take that risk off the table, the probability of success goes up dramatically. But again, it’s a change in behavior, but we need to identify that with sales technology.


Justin Michael I love that. I mean, I see a lot of sales technology out there to invest and save and analyze the finances, you know? So, there’s going to be a technology story for those who will avail themselves for it. But I think there’s still a place for the human, right? Is the question of do you want the full self-driving Uber, or do you want the person sitting in front of the Uber? Or do you want someone who’s going to advise you on the route where you’re going to go? So augmented intelligence seems to be a great use of artificial intelligence machine learning. Can you talk to me about the impacts, of some of these buzzwords in the fourth industrial revolution, right? Sensors, IOT, AI, ML what’s hitting your space? What are the trends that the listeners should be aware of from your perspective?


Mike McGlothlin Yeah, I think from a life insurance space, a lot of carriers are hooked into Fitbits and things like that, getting better information about the insured to make a more pointed underwriting decision, and I think that’s a great enhancement from a life insurance standpoint. From our standpoint, you know we need to think differently, and we need to use the technology to help educate people. As you said, if you Google financial planning software, you get 20 million hits, right? All of them are really good but then the one that transforms that client and changes their behavior is the one that’s going to win it. And we’ve developed a program called Journey Guide that does 5000 market simulations in a matter of two seconds. And so that advisor can sit there with the client, move a needle and say, what if I delay Social Security? What’s that impact? How does that change my behavior? What if I do something with guaranteed income? What does that change my behavior with? And then we get really specific about this particular person and we’re able to actually simulate what their lifestyle might look like in their spending curve right at the time of sale and that becomes a game changer for us in terms of simulating what their life might look like.


Justin Michael Very interesting. So, this show we talk about sales, marketing and operations would love your view on the quantum leap. Where are those three areas going? You could talk about the insurance industry; we could just talk generally just to get your opinion. What are some of the trends and themes that inspire you? What are some your predictions? Right? I’ve predicted for a very long time that these are going away. I’m not sure when, but I don’t think we’re going to have to have one hand on a phone for too much longer. I was actually excited by Google Glass, like finally minority for, you know, heads up display while we’re talking someone can be giving me you know, my assistant can tell me what Michael’s social media is doing the last time that you were quoted in the press. Yeah. I’m just curious, as a futurist where you think this stuff is going? Your industry may be a little slower to adapt I might predict, but there will be pockets that are super disruptive. They’ll be think tanks.


Mike McGlothlin Yeah, I think, you know, from a manufacturing standpoint of product, we tend to be a little bit slower where change happens more rapidly is at our level at the distribution level. We can certainly see a lot of, I always talk about I need to own the two square inches of the dashboard. Financial advisers are now trying to aggregate all of their information through DTCC, through firms like Allbridge and Broadridge so that they get a holistic view of their client and that’s perfect. But where does insurance, where does guaranteed income fit into that? And we need to be able to own that two square inch space. Now, to your point, that desktop may not be there. That may be on a tablet. That may be on your arm, you know, somewhere of being able to see all of that client data. And, you know, we just need to be there and have things that actually coordinate, that keep up with technology. The issues for us will be client security, will be health care information, all those things that are hypersensitive and being able to deliver those in a very secure format. And that creates a little bit of a of a lag for us and probably rightfully so, because it’s so sensitive information.


Justin Michael Yeah, I think that’s totally fair. So, one thing I love about the enterprise is there’s a little, there’s more regulation, there’s more controls. There’s that steady approach, right? And the scientific method where sometimes startups can move a little faster and they break things and sometimes they do make mistakes. We’ve a lot of stories about technology companies that weren’t buttoned up enough. I am curious, though, are there some startups or like themes of startups that you feel are in your sector or adjacent that are exciting to you? Maybe it is quantified self-technology. Who’s really innovating in the sector around the sector. I’m sure you look at a lot of exciting people and companies. Where should thought leaders be looking to disrupt themselves?


Mike McGlothlin Yeah. So, I think from a product development, we were working with a company called Plan Gap that puts a rider on different fixed annuities to help bridge the gap of potential Social Security reduction. I think things that revolve around longevity from a product standpoint are going to be really highly valued. The other thing is there’s a firm called On Cork that’s doing really great things in the life insurance and annuity space in terms of making it easier to buy and to do application fulfillment with drop ticket type of things. And again, anyone who can make that process easier is going to win the day in the short term for the insurance and the financial services industry. Longer term, five to 10 years, it’s who can put all of this confidential information in a secure format, helping their advisors or maybe even helping the consumer directly in the small net worth space, you know, like under half a million dollars. And then as they graduate and they earn more money, acquire more wealth, inherit more wealth, now it’s time to sit down with a financial advisor. We’re clearly seeing that with the robo advisor but developing that and making that more robust will be really important over the next five to 10 years, in my mind.


Justin Michael Fantastic. So, who do you read? And what do you listen to? For the listeners who are interested in what inspires you? It’s a good question. You know, it could be a certain publication or a radio show or a podcast. It could be thought leaders, specific you know, people or talking heads and I’m slowly becoming a talking head myself. But I’m just so curious, like, how can we upscale and we learn based on how you learn?


Mike McGlothlin So a lot of my reading is industry specific. But I do love the podcast, I think from NPR Radio, “How I Built This” a lot of great entrepreneurs about how they got started. A lot of it comes back to blocking and tackling, but also, they had a vision of what does it look like in five to 10 years? Then let’s drive to that.


Justin Michael Yes. What do you think of, you know, revolutions in nanotech or biotech or, you know, this whole thing about people living a lot longer without grabbing the third rail? I mean, you know, my daughter’s generation, she might live to be one hundred and twenty. I mean, this stuff is its pretty sci fi, but I think it might be possible. And how is that going to impact actuary or, you know, insurance or risk? I mean, it’s going to change a lot of systems from the governmental systems to the private sector. I mean, now we’re just kind of talking pie in the sky. But there’s a practical roadmap to this, I’m sure.


Mike McGlothlin Yeah. I mean, National Geographic and Time both did a magazine cover two years ago where they said that someone is on the face of the earth that will live to one hundred and forty-one years old. You know, we had someone from the Northeast Indiana Alzheimer’s Association come in and they’re highly confident that they will solve the Alzheimer’s disease within my lifetime. And when you think about taking that off the table from a longevity, now, you get, you know, really far out there. That will have a profound effect on how we price life insurance and mortality risk. Also, from an annuity standpoint, pooling those assets and generating income for longer periods of time, that’s where it’s really important for clients to shift that risk because you do not know how long you’re going to live. You know, I’m a type two diabetic and the information and the medical research in that disease alone has just absolutely been exponential in the last 20 years that I’ve been diagnosed and that my life expectancy is near normal life expectancy when it was much shorter when I was diagnosed around thirty-five. So those things will continue to change. Where I think the distributors will be disruptive is who can identify that? Who can identify someone who had a 10-year term policy that was issued eight years ago and then pick up the phone to the advisor and say, you know what, your person was rated a table for because they had some type of cancer? Treatment is hugely beneficial now; life expectancy is close to normal. Let’s go back and let’s figure out how we can lower their premium, increase their coverage where they may not have been able to afford that eight years to go when they purchase that. That will be the disruptive force at the distribution level, using all of that bio information and then getting that behavioral on top of that.


Justin Michael What about this whole thing with the gig economy? Everybody seems to be working. You know, I’m a sole proprietor in a way. It’s like they’re getting health insurance here, they’re working in these three jobs, and I think forty one percent of Americans are side hustling. And there’s this just whole ability to monetize many different types of skills and be a jack of all jacker or Jaqueline of all trades. How does that? Is that a piece of this that you’re factoring for in the in the go to markets?


Mike McGlothlin We certainly do from a retirement income standpoint, but where the shift is, is ten years ago, people were working because they had to. A lot of times people are working just like your dad because they want to, at least well into the 80s if they have a passion. We’re also seeing people do a lot more volunteer work or lower paid job because they have been able to retire successfully then they turn their passion into monetization. We see a lot of people that are retiring earlier, certainly during the pandemic, you know, we had 40 million people laid off, some of them at older ages that may not be able to go back into the workforce or not willing to go to the workforce. It’s a great time to say, what do I really want to do? What’s my vision for my life? And then let’s make a run at that. Let’s invest in painting, architecture or whatever. And so, we’re seeing that ability and that’s where social media has really come into play. To your earlier point, anybody can sit on their couch and they can monetize their skill set, and that will only help from a retirement income standpoint. But more importantly, I think it matches their passion as opposed to their need ten years ago.


Justin Michael Yeah, I used to always think that was a myth and then I sat in my armchair, like an armchair philosopher and did pretty well on my own, which was pretty, pretty interesting lately. They kind of say that people have, you know, two, three or even four career narrative arcs, that these long lives that we lead, you know, people are switching professions. I mean, there’s verticals right now like hospitality, aviation, some of these areas where, you know, millions or tens of millions are leaving one vertical and now they need to go upscale and go into the next career arc. Is that something that’s resonated for you? Have you always been in kind of the insurance biz? Is this your second or third tour of duty? I’m just always curious.


Mike McGlothlin Yeah, well, my father worked for an insurer. My brother worked for a bank. I started working for a bank, but we started selling insurance when banking deregulation happened in the mid 80s and so that’s how I got introduced to a broader financial services sector. But since then, since I graduated nineteen eighty-seven, I’ve been in the financial services sector. Now, having said that, you know, I’ve been in retail face to face with clients, I’ve been in wholesale, I’ve now been in management. So, we all have different glide paths. But to your point, I think the average American changes jobs seven times, whether they change markets or not. But, you know, we have seven job changes and many times, unfortunately, start back with our benefits from square one and we lose a lot and it cost us more to change jobs from a financial services standpoint and so we’ll be interested to see how that plays out. Post pipe pandemic as people probably look for more security and more stability over the next five to 10 years.


Justin Michael Where do you think your industry could go, like in 10 years? Just to take a little bolder prediction. How far out do you think and visualize because you’re in an industry of planning, right? I don’t always ask the question because in high growth technology, there’s enough to talk about in two years with Moore’s Law and Quantum computing but you’re talking about people living till one hundred forty. So, the world looks like very different in 2050 and 2035 but, you know, the things you are setting up right now with clients cover and talk about that. So, you’re projecting and forecasting a model into an unknown curve. It’s exciting. It’s daunting. There’s probably a lot of mathematical modeling and then just common sense and the wisdom of crowds and experiences of people like you. How do you plan for that? How do you run a business into a like a hockey stick of innovation? It’s just, that seems fascinating to me.


Mike McGlothlin Yeah and that’s where, you know, good actuarial science people really come into play because they are looking at hundreds of millions of people and all the trends with health care and, you know, cancers, diabetes with, you know, closer to normal life expectancies and then pricing those products today for 20 years down the road. That’s a huge challenge. You can look at the long-term care industry. Just about every long-term care policy had anywhere between 30 to 60 percent premium increases over the last five years because back when policies were issued, people just didn’t really know the need for it. Now, all of a sudden, as we have so many baby boomers and needing care, losing a spouse, and then you see the ripple effect of kids trying to take care of their parents and have pressure jobs, it just doesn’t work. And so, there is need for home health care and need for different services. And how do you price those out? That’s a huge challenge for our industry, but more important it’s a huge challenge to take that risk off from a client’s standpoint. You know, a lot of people will come to us with five, 10 million dollars net worth. You know, I don’t need to, I don’t need to plan for guaranteed income. I don’t need to plan for long term care event. But, you know, if you could spend 20 cents and get a dollar back, why wouldn’t you? You know, that’s probably how you made money. Same thing from an insurance and shifting that risk. That process and that philosophy will never change. It may be 25 cents on the dollar or 30 cents on the dollar because of mortality extending, but it’s still going to be a better buy than pulling out of your own pocket. The other thing is, is how does government do the entitlement programs, Social Security, health care, all those things? All up in the air, and not only are they up in the air, but they change, right, with every administration. You know, our forefather’s fathers had a great system of government. The downside is, is that it changes, and tax law changes on average one point seven years, which coincides with change in Congress as well. So, it’s important to be flexible, but also shift risk when you can shift risk.


Justin Michael Learned so much in this episode. What drives you personally to innovate?


Mike McGlothlin So, I grew up and I was a student basketball manager under the legendary coach Bob Knight. There’s not a day that goes by at practice where he did not try to get better. We kept stats and filmed every practice and I tell people, you know, people say, boy, what was it like to be working with a genius? And I’m like, I don’t think he was a genius. I think he just knew his game better. I think he knew his team better, and I think he knew the other’s team better than that other coach. For me, what drives me is to use technology better than anybody else to gain more insight, to understand my sales teams better, to understand our consumer behavior better, so we can better match our products with the needs of the consumer and just continue down that path and getting closer and closer to that client for me that’s the challenge and that’s what gets me up every day.


Justin Michael Wow, that’s inspiring. So, on that note, I think it’s had a pretty good half-hour here. How can people find you and your companies and just engage with your content so they can continue to follow, you know, your story and narrative will play until all of them live to be one hundred forty plus.


Mike McGlothlin Sure. Yeah. If you’re an adviser, you’d like to know more about Ash Brokerage. You can always go to Ash Brokerage dot com or also you can learn about a lot of our tools through high-performing practice dot com. And then also you can just call in and talk with any of our 19 retirement income consultants at one 800 five eight nine three thousand.


Justin Michael Awesome, then you can find Michael McGlothlin on LinkedIn.


Mike McGlothlin Yes, and Twitter at McG speaks.


Justin Michael OK. Good. I will almost spell your last name to its M.C. g l o t h l i n Michael McGlothlin. And it’s been wonderful having you on the show, hope to have you again on the Quantum Leap, and I learned a lot. Thanks so much.


Mike McGlothlin All right. Thanks for having me.


Justin Michael You’re welcome.


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