Bank Investment Consultant
Sam Aspinwall says experiences as a customer taught him early in his career how fear could motivate a client.
He converted that experience — he remembers specifically the feeling he had as a friend in the industry talked to him about his insurance coverage in the context of his financial plan — into a lesson: Lead by offering to protect what a client has now.
"I knew what he was doing was something I needed to add to my own practice," he said. "So I took his idea. There's no point in reinventing the wheel."
While some advisers would shy away from selling insurance, Mr. Aspinwall, 35, has decided to lead with insurance in conversations with new clients at Kish Bank in Belleville, Pa., where he is Raymond James & Associates' one-man investment program.
When Kish's chief executive officer, William Hayes, referred a personal friend to Mr. Aspinwall, he asked the prospect to talk about how well his assets were protected. He touched a nerve that would lead to a desirable niche: Mr. Hayes' friend was a doctor.
Surrounded by signs of mortality and in constant fear of malpractice lawsuits, doctors are acutely aware of the role insurance can play in protecting their practice, Mr. Aspinwall says.
"I started the conversation with disability insurance," he said. That was different from what the doctor had heard from other advisers angling for his business. "Everybody wants to manage doctors' retirement plans," Mr. Aspinwall said. "You don't start there, you end there. Most physicians have never looked at their disability and injury policy, so I start there."
The doctor soon referred his partner to Mr. Aspinwall.
The same approach worked with the partner, who referred more doctors. "I talked to them about how their insurance affects their financial plan, starting with disability," Mr. Aspinwall said. "When I ask doctors if they're covered, the answer is almost always yes, but when I ask if they've ever reviewed their policies, I can usually get them to drop by."
Though Mr. Aspinwall holds a degree as a medical technician and worked as a geneticist before becoming a financial consultant, he said this professional link hasn't helped him win business from doctors. Advisers don't need special medical knowledge to serve doctors, who already have plenty of medical expertise. Rather, it has been Mr. Aspinwall's financial acumen that has earned him his niche business. The bulk of his clients have no idea that he was once was a geneticist.
He left that career in early 1998. "I was doing a lot of amniocentesis, checking whether babies had Down syndrome. But it's horrendously boring because you're running the same type of test over and over again," he said.
A lot of Mr. Aspinwall's extended family work in some part of the financial services business, so following the money was natural.
He joined Kish Bank nine years ago. He spent his first two years as a junior trust officer, and then started working to become a certified financial planner, which, along with his work in the trust department, gave him an expertise in different types of insurance. It wasn't until the bank teamed up with Raymond James in 2001 that Mr. Aspinwall moved from trust to investment services and started working with doctors.
Mr. Aspinwall gets paid only for sales of life insurance; all other insurance is sold through a subsidiary of the bank. But insurance has opened the door to plenty of fee business. Since 2001 he has increased his production by an average of 24% a year, mostly with mutual-fund wraps and separately managed accounts.
Mr. Aspinwall now manages $68 million of assets — "not bad for just me and my assistant," he said. He produced $430,000 last year, 30%-35% of which came from doctors.
Mr. Aspinwall now works with 30 practicing doctors, most of them 45 to 55 years of age.
Most doctors have similar insurance problems. As Mr. Aspinwall goes through their policies line by line, they are surprised to discover how vulnerable they really are.
For example, doctors' hands, the real tools of their trade, are rarely insured. Mr. Aspinwall said that doctors often get lousy coverage because when they start out, cash flow is a huge problem. The person charged with managing the practice's expenses will invariably buy the cheapest group insurance plans to cover everything from home and auto to disability and personal liability. But these policies are cheap because they're full of holes.
Another problem Mr. Aspinwall commonly uncovers is that doctors' disability policies usually offer very short benefit periods.
He said five-year coverage isn't much comfort to an injured doctor who has just turned 40 and can no longer conduct the profession he has spent so much time and money training for. "It's really important with any individual contract to discuss payments and benefits," he says. "Doctors need the 'own occupation' clause so if they can no longer work as a physician, they can still claim benefits until 65 even if they find work in another field."
Mr. Aspinwall starts to win over these often-skeptical clients while leading them into the first sale. "It's pretty straightforward. The most expensive policies provide the best coverage," he says. "Even second-tier coverage, which reduces the premium, is still head and shoulders above group policies."
Once Mr. Aspinwall has doctors interested in their insurance, he begins to discuss other topics.
Most doctors are also unaware how concentrated they've become in certain assets. "This is probably their biggest surprise," Mr. Aspinwall said. "They suddenly find themselves with $1 million in a profit-sharing plan that they don't know what to do with because they haven't thought beyond accumulating it."
It's only at this point that Mr. Aspinwall starts discussing investments, usually in a process that can take numerous meetings over several months. "We've talked about how to grow your business, now let's talk about how you're going to pay for retirement," he said.
