Why being a good broker alone won’t cut it for ownership
Want to own your own brokerage? Get familiar with the business side of things first, said a P&C financial advisor in a Canadian Underwriter LinkedIn Live panel discussion.
“When I think about what makes a successful brokerage owner, most brokerage owners and entrepreneurs come from the sales side—so they know how to handle their customers, they know how to work with clients—but I think one of the big pieces that get underestimated is that management side of things,” said Alex Wong, partner at Smythe LLP, during ‘How to become a young brokerage owner.’
“There’s a lot more [needed] to be able to run a successful brokerage than just selling insurance and advising clients,” Wong said. “How do you manage people? How do you look out for the finances? How do you run that business? Being in whatever brokerage, whether it’s big or small, getting the opportunity to learn that side of the business, I think is going to be very helpful for someone who’s looking to one day start their own business.”
Wong made his comments during a discussion with fellow panellists on the differences in opportunities for aspiring owners who work at small brokerages compared to large brokerages.
Related: Did you miss “How to become a young brokerage owner” on LinkedIn Live? Register to watch it here on demand.
“I feel that both do have their advantages,” said Jennifer Savage, commercial and personal account executive at McDougall Insurance. “Within a smaller brokerage, there’s say, a shorter ladder to climb where you might just be dealing with a few people…in the sense that a small broker might [only] need a couple managers or maybe one partner,” she said. “Where a larger brokerage, the ladder might be a little bit higher to climb, but at the same time, there might be more managerial positions or partnership opportunity.”
To become familiar with the business management side of brokering, aspiring owners must find an organization that supports their aspirations, panellists emphasized.
So, how do aspiring owners learn how to manage a business? The speakers mentioned partnerships, co-ownership or executive leadership opportunities as possible steps toward the ownership ladder.
“[It’s about] finding out where you want to go and finding that organization that fits you and that will help you grow,” added Crystal Underhill, new business development at Reith and Associates Insurance. “That can be big and that can be small, but [it’s about] finding a partnership for you that allows you to grow within that.”
Underhill, for example, owns her own book of business at the family-owned brokerage she works for.
“[Owning a book of business] wasn’t something that was happening in my business before myself,” she said. She emphasized that the opportunity may exist at some brokerages but not others.
“Some business models don’t want that, [but] some see the value in having employees who continue to grow the business, and the owners still benefit from me owning a portion of their business,” she said. “Some brokerages may say ‘no, that’s not our business model,’ and that’s okay—that’s not the way they want to do business. But if that’s what you want, you need to find a business that will help support that.
“Most people I know, we’re very lucky in the sense that managers, principals, owners, [believe] education is very important,” said Savage. “Align yourself with an organization that believes in continuing on, whether it’s your CAIB, it’s your CIP, whether it’s managerial.
“If you’re working for an organization where they’re sharing what growth opportunities there are, whether it’s stocks or whether it’s partnerships, [it’s really important that brokers feel] comfortable asking the questions, without fear of any repercussion.”
In fact, many owners want brokers to ask them about growth opportunities, Wong added.
“You may be under the expectation that ‘if those opportunities exist, they’ll tell me about it,” he said. “Don’t expect the executive or the business owners at your brokerage to tell you what those opportunities are. Because, quite honestly, they may be thinking, ‘well, I really wish someone would come ask me and step up, because we have all these opportunities that no one no one’s been asking me for.’”
It’s a similar premise to the way that many brokers begin retaining clients, Underhill said.
“Especially when you’re new, your phone’s not ringing for people to quote,” she said. “They don’t know who you are; you have to go out and find it. You have to be ready to put yourself in the position from the beginning to go out and find what you are looking for, just as you have to go out and find your own business.”
Feature image by iStock.com/Manmarumaki
