Indispensable

Nick Lamparelli

Over the course of my career, I’ve had the opportunity to work with firms serving affluent clients and to interview high-net-worth individuals and investors. One consistent observation stood out: not a single person referred to their insurance agent or broker as a “trusted advisor.”

When asked why, the answer was strikingly consistent—those they viewed as trusted advisors were typically attorneys or accountants. These professionals were seen as integral to providing business advice, guiding mergers and acquisitions and shaping strategic direction. Meanwhile, insurance agents and brokers were seen as specialists solely focused on securing policies.

This perception is not limited to the super-wealthy, and it creates a significant problem. Even the most skilled and successful insurance agents are often seen as commodities—interchangeable providers of a service. In fact, many of those affluent clients compared insurance professionals to real estate agents: necessary for completing a transaction but not indispensable for strategic decision-making.

This transactional perception leaves agents and brokers exposed to market pressures, where a competitor offering a slightly lower price can easily win over their clients. Attaining the status of a trusted advisor is important not just for enhancing your professional reputation; it also fundamentally transforms the nature of your client relationships. Here’s how:

De-commoditization: By becoming a trusted advisor, an insurance professional is no longer just a facilitator of transactions. They become a valuable partner who brings unique insights and solutions to the table.

Client retention: Trusted advisors are harder to replace. Clients are less likely to switch providers based on price alone when they perceive their advisor as offering significant value beyond the transactional.

Navigating challenging markets: In hard market scenarios, where premiums rise and coverage options shrink, trusted advisors can better communicate the rationale behind these changes. They can guide clients through difficult decisions and demonstrate value even when prices increase.

Long-term partnerships: Trusted advisors build relationships that go beyond immediate needs. They position themselves as long-term partners in their clients’ success, fostering loyalty that transcends market fluctuations.

The journey to becoming a trusted advisor hinges on two key elements: advice and trust. While this may sound straightforward, achieving both requires deliberate effort and a shift in mindset.

Advice that matters

To be perceived as an advisor rather than just an insurance specialist, you must consistently deliver value through actionable insights and meaningful guidance. This involves going beyond the scope of insurance placement and demonstrating a deep understanding of your client’s business or personal challenges.

Understand their industry: If you specialize in serving a particular sector, such as restaurants or technology startups, immerse yourself in that industry. Study trends, challenges and opportunities that are shaping the landscape. For instance, if you work with restaurant owners, create a white paper on emerging trends in dining experiences or labor challenges in the hospitality sector. Reference public companies like McDonald’s to illustrate financial metrics or operational strategies that can inspire your clients.

Anticipate their needs: Don’t wait for clients to tell you what keeps them up at night—you should already know. Instead, focus on advising them about what should be keeping them up at night. If cyber liability is an emerging risk in their industry, you could proactively educate them on the potential consequences of data breaches and how they can mitigate these risks.

Offer them wisdom: Advice is more than just information; it’s about offering wisdom that helps clients make better decisions. Share insights on risk management strategies, cost-saving opportunities or regulatory changes that could impact their business.

Earning their trust

Trust is earned through (years of) consistent (and indefinite) actions that demonstrate your commitment to your client’s best interests. It requires transparency, reliability and a genuine focus on helping clients achieve their goals.

Communicate clearly: Insurance can be complex and overwhelming for clients. Simplify technical jargon and explain coverage options in terms they understand. Clear communication fosters confidence in your expertise.

Be proactive: Don’t wait for clients to reach out with questions or concerns. Regularly check in with them, share updates on their policies and provide recommendations for adjustments based on changing circumstances.

Act with integrity: Always prioritize your client’s needs over your own commissions or sales targets. Clients can sense when an advisor is genuinely invested in their success versus simply trying to close a deal.

Follow through: Trust is built by doing what you say you will do. If you promise to deliver information or follow up on an issue, make sure you do so promptly and thoroughly.

To thrive in an increasingly competitive landscape, professionals must move beyond transactional interactions and embrace the opportunity to become trusted advisors. By providing meaningful advice and earning their clients’ trust, they can elevate their value, strengthen client relationships and secure their place as indispensable partners in their clients’ success.

Becoming a trusted advisor is not an overnight transformation; it’s an ongoing commitment to providing value and building trust over time. The journey may require effort and dedication, but the rewards both professionally and personally are well worth it. Now is the time for insurance professionals to redefine their roles and claim their rightful place as strategic advisors who make a lasting impact on their clients’ lives and businesses.