Establishing management practices and influential factors for the effective recruitment and development of successful financial consultants

• Main Author: Vorster, Pieter-Spies
• Published: 2012
• Subjects: Insurance companies - Management - South Africa.
• Online Access: http://hdl.handle.net/10210/7663

M.B.A. === Currently in the long-term insurance and investment industry, the failure rate of brokers and agents are so high that thousands of rands are lost every month in training and development of these consultants. "The average cost to bring an agent through the first four critical years in the business can be as high as $250,000 in some companies" (King, 1999:7). Brown and Hinchcliffe, (1999:16), acknowledges that the turnover rate is approximately fifty percent within the first year of a new recruit joining the industry. These statistics indicate that the cost and failure rate of consultants could have a significant impact on the profitability of an insurance company. But when does a consultant actually fail? Failure of a consultant results when he/she does not achieve contract status (i.e. has low levels of production) as well as a consultant that resign from the industry by cancelling his/her contract to promote and sell insurance and investment products with a life insurance company. Considering the statement by King (1999:7), that insurance companies spend fortunes on training, this must aid in reducing the failure rate of consultants. It is believed that the support staff and business principles of Liberty Life Association of Africa Limited (Liberty) are of high standard and that the formal training received by new recruits are also of the highest standards (including methods of training) (Dotta, 1999:100). Furthermore, the training programmes and curriculum are governed by law to meet governmental regulations. Thus the question is posed: If the support services, training and development is fulfilling the needs that new and existing consultants might need to succeed, why then is there still such a high failure and turnover rate of financial consultants within Liberty? To determine possible factors that can cause failure it is necessary to analyse the insurance industry as well as the nature of the consultants' duties. This will enable a fundamental understanding of the career as well as the people performing the tasks thereof. The aim of this research project is to analyse current employee data, recruiting and management procedures so as to establish possible trends for successful recruiting and management of fmancial consultants in the insurance industry with particular reference to Liberty Life.