Under new structure, fewer MetLife advisers pushed to produce more

Restructuring puts two MetLife B-Ds under one roof, ups pressure to sell proprietary products.
JUN 11, 2013
MetLife Inc. is revamping its distribution group, giving its two remaining broker-dealers higher required minimum production levels with the expectations of selling more proprietary products with fewer reps. The insurer is placing MetLife Securities Inc., New England Securities Inc. and MetLife Resources, a retirement services distributor, under a new banner called The MetLife Premier Client Group. As part of the restructuring, the firm will further cut its adviser corps by 300 to 600 reps after eliminating about 2,300 since last year. (See also: MetLife adviser ranks thinning out fast after cuts) “The goal for the end of 2015 is about 4,700 to 5,000 advisers with an average of $185,000 in production,” said Paul LaPiana, senior vice president of MetLife Premier Client Group. In 2012, MetLife had 7,600 advisers with an average production of $127,000 per rep. Today, that number is down to 5,300, with an average of $165,000 in production for each adviser. Advisers under the new structure will be expected to meet higher sales minimums. Last year, brokers needed to generate $60,000 in production to make their minimum. That number is now $90,000 — and of that, at least $60,000 must come from proprietary products, whether MetLife's asset management platform or the sale of disability, annuity or life insurance products. “If someone doesn't have the $90,000, but they've made $75,000 in proprietary product sales, we'll allow them to make the minimum production requirement,” Mr. LaPiana said. The requirement on proprietary product sales goes against the grain, noted Jonathan Henschen, a recruiter with Henschen & Associates LLC. “The whole direction of the industry is the opposite of that: Make everything available to the rep and leave it to them what to sell,” he said. “In the captive market, many have opened up on things like mutual funds, so you have multiple fund families available. But for insurance, many of the companies are still restrictive.” Mr. Henschen added that the $90,000 production minimum is a high hurdle for many of the brokers. “A lot of those captive reps are in the $50,000 to $100,000 range, so this will force out a lot of them,” he said. Overall, the revamp is supposed to result in an elite adviser force that's inclined more toward comprehensive financial planning rather than just selling products. Mr. LaPiana said the firms are adopting a client engagement model that is “similar to what you see with a [certified financial planner] framework.” “It's a focus on training and education,” Mr. LaPiana said. “In the past, the top advisers have always been a process-driven holistic planning group. They take clients through a thoughtful dialogue, understand their objectives, help them accumulate for retirement and address risk management needs.” He added: “We find that a lot of our advisers at the lower tiers were going at it from a product perspective, rather than a comprehensive planning approach.” In addition to that higher training standard, MetLife wants more from its new recruits. In the past, the firm would recruit “a couple thousand [inexperienced representatives] in a year” and 100 who were experienced, Mr. LaPiana said. From this point on, the firm hopes to attract 700 to 750 inexperienced brokers, and 250 to 300 veteran reps. New advisers will be expected to work on teams and have access to guidance, mentorship and client prospects from the more experienced advisers. Recruits will be required to get their Series 7 and 65 licenses, as opposed to only their Series 6, 63 and life and health insurance licenses, Mr. LaPiana said. Mr. Henschen noted that the additional licensing is what gives wirehouse reps an edge over insurance brokers. Many reps at insurance firms tend to only be Series 6 licensed, he added. “MetLife will have its work cut out for them,” Mr. Henschen said. “This is going to be a long road.” MetLife has been through interesting times: In May, InvestmentNews reported that the insurer had cut its adviser force by about 2,500 reps in the past year — excluding the 850 brokers at Walnut Street Securities and Tower Square Securities, the two MetLife independent broker-dealers that were sold to Cetera Financial Group in April.

Latest News

Texas man says SEC and fund could make him pay twice
Texas man says SEC and fund could make him pay twice

A $141M judgment and a federal asset freeze collide over one shrinking pool

Osaic executives Kristy Britt and Greg Cornick to leave
Osaic executives Kristy Britt and Greg Cornick to leave

The firm's CFO and EVP of Wealth Management Solutions are the latest executives to exit the broker-dealer.

Estate planning becomes a client retention issue for financial advisors, survey finds
Estate planning becomes a client retention issue for financial advisors, survey finds

Clients are saying they would consider switching advisors if another professional offered estate planning services, according to a new Trust & Will survey.

Candidly adds AI agents for Trump Accounts, workplace benefits
Candidly adds AI agents for Trump Accounts, workplace benefits

CEO Laurel Taylor says the fintech's composable AI stack helps workers optimize dollars across Trump Accounts, 529s, 401(k)s, and other employee benefits.

BMO adds three advisors in Dallas amid Y'all Street wealth boom
BMO adds three advisors in Dallas amid Y'all Street wealth boom

The bank has swiped three banking veterans from BNY as the city climbs the ranks of America's fastest-growing wealth hubs.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.