Beyond Annuities: Building Your Advisory Practice

For many successful insurance professionals, there’s an unmistakable turning point—a moment when the limitations of a commission-only business model become apparent, and the opportunity to build something more substantial emerges. If you've built a thriving annuity practice but are wondering what's next, expanding into investment advisory services might be the right move.

The switch from insurance sales to comprehensive wealth management isn't just possible—it's happening all around you.

For example, David Pulcini went from selling insurance to becoming a managing partner of SixPoint Financial Partners. Could you be another success story? Let’s cover the basics. 

Why Make the Leap Beyond Annuities?

The insurance business has provided you with valuable skills—you know how to connect with clients, identify their needs, and close sales. But a commission-only business comes with inherent challenges. 

Most insurance professionals face income unpredictability and are constantly pressured to find new sales to maintain their revenue stream. The limited recurring revenue means without renewals or trails, you're essentially starting from zero each month. Additionally, increasing regulatory scrutiny on commission-based products adds complexity to your compliance burden. Perhaps most significantly, the traditional insurance model creates client relationship boundaries, often limiting ongoing engagement after the sale is complete.

Investment advisory services solve these challenges by creating stable, recurring revenue streams while deepening client relationships. For advisors who've mastered sales but want more stability and growth potential, this could be the perfect career accelerator.

The Emerging Hybrid Professional

Financial professionals today aren't choosing between insurance and investments—they're doing both. This hybrid approach allows you to:

1. Leverage existing client relationships to introduce investment management
2. Provide more comprehensive solutions by addressing both protection and growth needs
3. Create multiple revenue streams that could stabilize your practice's income
4. Establish true enterprise value in your business through recurring revenue

The Roadmap: From Insurance Professional to Wealth Manager

Step 1: Obtain the Proper Licensing and Registration

If you haven't already, you'll need to:

• Pass the appropriate securities exams (typically Series 65 at minimum)
• Register as an Investment Advisor Representative (IAR)
• Align with a Registered Investment Advisor (RIA) like Fusion that allows you to maintain your insurance business

There are several education opportunities that can help you prepare for your exams and grow your knowledge beyond the realm of insurance.

Step 2: Develop Your Investment Value Proposition

Your experience means you already understand the importance of a clear value proposition. As you expand into investments, ask yourself:

• What types of clients will you serve?
• What investment approach aligns with your existing client base?
• How will you differentiate your investment offerings?

Many transitioning advisors find success by starting with straightforward, model-based solutions that don't require them to become “lone wolf” portfolio managers. This approach allows you to provide institutional-quality investment management without reinventing the wheel.

Step 3: Create Operational Efficiency from Day One

One of the biggest challenges for insurance professionals is underestimating the operational complexity that comes with adding advisory services. While insurance products typically involve an application and a check, managing investment accounts requires:

• Account opening and funding
• Portfolio construction and implementation
• Trading and rebalancing
• Ongoing performance reporting
• Compliance oversight

Rather than building this infrastructure yourself, partnering with a platform that specializes in operational support can dramatically simplify and clarify your new processes. The right solution should provide multi-custodial capabilities and streamlined account-opening processes while offering access to model portfolios and alternative investments and comprehensive back-office support for trading and rebalancing activities.

Step 4: Convert Existing Relationships Strategically

Your existing clients trust you with their insurance needs—this also creates a natural opening to discuss their investment goals. Begin by identifying clients who:

• Have mentioned investment concerns or goals
• Hold assets in underperforming or high-cost products
• Are approaching retirement and need income planning

Start with a simple approach: "I've helped you address the protection side of your financial plan. I'd like to review how your investments are positioned to see if we can improve that side as well."

Step 5: Build Your Advisory Business Alongside Your Insurance Practice

You can maintain your insurance business while gradually growing your advisory practice. This hybrid approach allows you to:

• Preserve your existing income stream
• Test your investment approach with receptive clients
• Gradually shift your business mix as your confidence grows

Common Challenges in the Transition (And How to Overcome Them)

The Knowledge Gap

Many insurance professionals worry they don't have enough investment expertise. The solution isn't to magically become a market expert—it's to leverage institutional-quality research and model portfolios while you build your knowledge base.

"Transitioning advisors don't need to become portfolio managers," notes Justin Koehler, Director of Sales at Fusion. "They should focus on their strengths—building relationships and gathering assets—while leveraging investment solutions built by professionals."

The Operational Burden

Setting up and managing investment accounts can be time-consuming. This is where finding the right platform partner becomes critical. Look for a solution that allows you to:

• Open accounts in minutes, not days
• Implement model portfolios efficiently
• Manage client reporting seamlessly
• Focus on client relationships, not paperwork

The Pricing Challenge

Many insurance professionals struggle with pricing their advisory services. Remember that clients value transparency and fairness. Consider a simple pricing structure that:

• Clearly separates platform costs, investment management fees, and your advisory fee
• Provides value at each level of service
• Allows you to control your margins as your practice grows

The Financial Impact of Adding Advisory Services

Consider the mathematics of adding investment advisory to your practice. The recurring revenue model transforms your business fundamentals—a single $500,000 client at a standard 1% advisory fee (New Advisory Fee) generates $5,000 in predictable annual revenue without requiring a new sale. Beyond immediate cash flow, that same client represents an estimated $15,000 in enterprise value (approximately 3 times the annual revenue), building equity in your business that simply doesn't exist in a pure commission model. Perhaps most importantly, advisory services typically enable greater scaling efficiency, allowing you to work with more clients more effectively than commission-only models while delivering consistent service.

For many transitioning advisors, the first year might yield only 20-30% of their revenue from advisory fees, with that percentage increasing each year thereafter. The goal isn't to replace insurance sales but to build a complementary business that provides stability and long-term growth.

Getting Started: Your Next Steps

If you're ready to expand beyond annuities and build a more sustainable advisory practice:

1. Evaluate your current business: What percentage of your revenue is recurring vs. transaction-based?
2. Assess your infrastructure: Do you have the operational capacity to manage investments, or do you need a platform partner?
3. Consider your value proposition: How will you position your expanded services to existing clients?
4. Identify potential partners: Look for an RIA that understands the insurance business and provides the support you need

Patience and planning can go a long way. Setting reachable goals allows you to build confidence and expertise while maintaining your existing business.

Ready to explore how your practice could evolve beyond annuities? Contact Fusion Capital Management to learn how our platform supports insurance agents who have also entered the financial planning world.