Like so many successful advisers, Brian Ashe is quick to tell you that relationships are the largest driver of success in the insurance business. "People change companies," Ashe says. "They can be really terrific with numbers; they can be good managers of their offices; they can have the latest equipment. But if you are not a person who believes in and is dedicated to the establishment of relationships, it makes it significantly more difficult to be successful."
That belief has guided Ashe through his numerous volunteer leadership positions with industry groups, including president of the Million Dollar Round Table, chair (and current treasurer) of the LIFE Foundation, president of the Chicago chapter of the Society of Financial Service Professionals, president of a local chapter of NAIFA, and law and legislative chairperson for NAIFA, Illinois.
"People want to talk to each other," Ashe avows. "They want to be understood. They want to be heard. They want someone to pay attention and help them with their needs. I think this affirms that if we can find a way in the modern economy to touch people's hearts and souls and develop relationships, that we have some of the greatest opportunities we have ever had right now. There are challenges, but if we stick with the philosophy that relationships are the most important thing of all, ultimately we will be successful."
At Lisle, Ill.-based Brian Ashe and Associates, just outside Naperville, "We try to help people with the basic elements of their employee benefit planning, whether that's group health insurance or group life insurance, or pension or 401(k) plans, and the integration of those benefits with their estate planning and business insurance," Ashe says. This can cover everything from helping to guarantee retirement income to the payment of federal estate taxes.
Prior to getting into the life insurance business, Ashe was a 24-year-old pharmaceutical representative who had grown disenchanted with his salary-to-bonus compensation arrangement. "I was willing to work hard, but I wanted to get paid for it," he recalls, but the firm spread its bonus arrangement over a whole group of reps. "I was slugging it out in the snow in Chicago, and somebody in California who was on the beach could get as much share of the bonus as I did," Ashe says.
Ashe's next-door neighbor happened to be in the insurance business and recommended looking into opportunities selling. As it turned out, he was with Physician's Planning Service Corp., an organization in New York City that was associated with the Home Life Insurance Company of New York.
"I thought, 'Well, gee, I'm working with doctors already. This is a way to have an instant marketplace by working with doctors with Physician's Planning Service and finding some people to talk to as I entered the life insurance business," Ashe says. He started with Home Life Insurance in August 1969.
Home Life did not sell health insurance, but Ashe had clients who wanted it. "So I was selling individual and group health insurance policies through my own sole proprietorship from 1969 forward while I was under contract with Home Life," he recalls. Ashe incorporated his practice in 1980. He ended his relationship with Home Life as a career agent in 1984, becoming truly independent.
Million dollar year
Ashe recalls his stint as president of the Million Dollar Round Table in 2000 as "the single most rewarding opportunity" of his career - a somewhat surprising take on a year in which he suffered a serious threat to his health, in the form of a heart attack and bypass surgery.
"It was obviously a challenge - but it's a challenge for anybody who's serving on the executive committee of the Million Dollar Round Table because the expectations are high," says Ashe. "I really think the Million Dollar Round Table helped to define my career in the business," he says.
MDRT CEO John Prast, who's known Ashe "forever," recalls that Ashe has said that "MDRT is not his life, but it has enhanced his life." Ashe, says Prast, "is one of those people who sees the good, applies it, and is one of the beneficiaries of it. He's a unique leader in the sense that he goes beyond the boundaries of his immediate responsibility, and he does it not in an assertive way, but in a thoughtful, all-encompassing way. He is one of those people who believe that a rising tide lifts all boats."
The MDRT has about 30,000 members in 77 countries representing about 484 companies. "I always felt a very, very strong orientation to the membership because I felt that the people who were running the organization really derived their power, the ability to do things, from the membership," says Ashe. This engendered a great sense of obligation to be attentive to their needs, to learn more about the way they conducted their business, and to respond to requests to speak.
Ashe had speaking engagements during his tenure as MDRT president in about 15 countries and about 38 states. Being in a leadership role at the MDRT "presents a wonderful opportunity to meet with great people, to learn how insurance is marketed all over the world, to see markets emerging like they are in China and areas of the Far East," Ashe attests.
Virtually every trip included a surprise of one kind or another. Ashe recalls one in particular: "I was speaking in Trinidad, and they had arranged for me to do an interview on TV. We figured beforehand that it was probably going to be just a couple of minutes on why I was there representing the Million Dollar Round Table. When we got there, however, it looked like we might have, like, a 15-minute conversation. Also, they told me that the host of the show was a bit controversial. I said, 'Well, OK.'
"So I go into the studio, the show starts, and the guy says, 'Here is Mr. Brian Ashe, the president of the Million Dollar Round Table. Mr. Ashe, tell me about the Million Dollar Round Table because my perception of it is a bunch of fat, white guys sitting around smoking cigars, figuring out how they can rip people off.'"
Burden of regulation
The biggest change during his 40-plus years in the business, Ashe, believes, has been the influence of government. "Government, to a certain extent, used to provide some reference to the regulation and taxation of products," he begins. "Now, to a very large extent, they're actually involved in the design of the products because they're telling you what's acceptable and what isn't.
"I think we can acknowledge that compliance is important," Ashe says. "Nobody wants to be on the front page of The Wall Street Journal for doing bad things."
Nonetheless, he says, the "explosion" of government regulation, together with litigation becoming more prevalent, makes it "very, very difficult" to do business.
"Essentially it takes as long or longer to get a life insurance policy issued now than it did 40 years ago, when we had essentially no computers. That's kind of amazing, with e-mails and imaging and all the technology we have now. I think that to a certain extent [the reason] is compliance. There's much more documentation that's necessary, and of course, that has to be reviewed. Applications are, in many cases, 30 and 40 pages long."
In the '80s, Ashe recalls, State Farm was very interested in expanding into the life insurance business. "I heard a vice president for State Farm talking about the comparative differences between life insurance and automobile insurance," Ashe remembers. "He said, 'Gee, you've got an application that's several pages long. The person has to take a medical examination. They look at an EKG. They test his blood. They test his urine. They want financial information. When we write an automobile policy; we don't even know if the brakes work.' So our business is complicated. But there is a geometric increase in that complexity when you introduce more government and more compliance requirements."
Because of his involvement in industry groups, Ashe has given a lot of thought to the future of the business. "This is, on the one hand, probably the single-most opportune time for people ever, in my 40 years to be in the business," he says. "We have more prospects, more products, and less competition today than ever.
"On the other side, it's the most dangerous time ... because of the imposition of government regulation and the resulting uncertainty about what you can sell; how you'll get paid; the imposition, potentially, of the fiduciary standard on people in our business that could eventually lead to the outlawing of commissions by the SEC. Where that's happened in other countries, it's meant the death of the financial services business for the providers and advisers, and it's meant less product and advice available, especially to middle-class consumers. That's very scary."
Ashe also sees a shift taking place in society that bodes well for the future. "If you look at the products that we sell - group or individual life insurance, disability insurance, health insurance, retirement plans - those products had less attention paid to them, I think, as society, until recently, moved away from paying attention to basic foundations of financial security. There seemed to be a change in the basic philosophy of the people in this country about how they should achieve financial security. And in many cases, it encompassed the elimination of consideration for the basics of financial security, like saving, not putting too much on credit cards, not overdoing it on mortgages, and so forth.
"Today, the life insurance business sells seven million fewer policies every year than they did 15 or 20 years ago. And that's at a time when the number of households with children has increased by 19%. So you have the prospects for a product increasing, but the number of policy sales going down."
However, Ashe perceives that the pendulum is swinging back. "When you have two significant changes in the stock market in 10 years, and the S&P 500 returns a negative 91 basis points between 2000 and 2010, people are going to say, 'You know, maybe I ought to start thinking a little bit more about that flight to safety.'"
The next generation
In 2007, Ashe joined AXA Advisors, "largely because of the desire to have some additional resources and training in anticipation of my son coming in the business," he recalls. "I was getting older, and I didn't want there to be a situation where my son would come into the business and something would happen to me that would leave him on his own."
Having the backup of AXA's fairly large organization in the Chicago area was important. Additionally, recalls, Ashe, "I wanted his training to be done somebody other than me."
His rationale: there is a benefit in putting some distance between father and son.
Ashe explains: "First, on the one hand, a parent can favor a child entering the business and may not make them as accountable as they should be. So I would rather have them accountable to somebody else. Second, I think a child, when the father or the mother in the business is telling them something, having heard that father or mother for 20 years beforehand, might tend to dismiss it a little bit - 'Oh, that's the same old stuff I've been hearing for 20 years.' But if they're hearing it from somebody else, it may have a bit more relevance."
Ashe cites some interesting numbers on intra-family business succession trends. "In general, across all businesses, the figures indicate that there's only a 30% succession to the next generation, and from that generation to the one following it, only a 10% succession," he says.
So why is that? Ashe thinks it's a combination of things both personal and specific to the business. "It could be related to accountability and resources and so forth. And of course, a lot of it has to do with some of the things that we talk to clients about on a daily basis relative to succession planning, buy and sell agreements, and having a written plan as opposed to ambiguous conversations about who's going to take over. And you know, you have family disputes that can occur."
Ashe illustrates the family dispute factor with a real-life story: "I have a client that's had a family business since the Civil War. And I said to the owner, 'You know, it's unbelievable - the Civil War, the Spanish-American War, World War I, the Great Depression, World War II, Korea, Vietnam, all sorts of economic cycles, and the business has survived.' He said, 'That's easy. You know what's difficult? Family.' So in my own family, I was trying to remove some of the impediments to entry and appreciation of what needs to be done by suggesting that my son be accountable to somebody else in addition to me," Ashe says.
In addition to son Chris, Ashe has three other grown children: a son who works in HR for Microsoft, a daughter who is a whale researcher currently working on her PhD at the University of St. Andrews in Scotland, and another son who works in a restaurant in Friday Harbor, Washington.
Ashe himself is the oldest of 10 children. He grew up on the South Side of Chicago, in a neighborhood that had a lot of other large Irish Catholic families, he recalls.
The son also rises
For Chris Ashe, "The seed was planted very early on for me - some of my colleagues in the business like to joke that I've been dealing with objections since I was five years old," he says.
"I made up my mind that this is what I wanted to do after my junior year in college, and started right after my graduation from the University of Illinois, Urbana-Champaign. I graduated on a Tuesday, came home on Wednesday, moved out on Thursday and started on Monday. I was eager to get started," says Chris.
Now in his third year with Brian Ashe and Associates, Chris has his own client base that he's been developing, and he has been working with some of his father's clients as well. In addition to being life and health licensed, he also has his series 7 and series 63 in securities, so he can serve as a registered investment adviser as well.
Chris characterizes himself as "a sponge" during his first three years in the business - "trying to absorb as much as I can about salesmanship, knowledge, the products that we utilize, tax law, doing a professional designation, and so on. Starting in this business is very much about survival. It's hard to address bigger picture things when you're just trying to get established. I've begun to do that, though."
Things like operational duties, expenses, revenue and accounting "were never foreign to me because I've been in other work situations where I've been a part of that blueprint," says Chris. "I'm familiar with the ebb and flow of what it takes to run a company from a numbers standpoint and a relationship standpoint."
As this point Chris feels pretty much up to speed with everything that goes on with the company. "I don't think that will be the hard part," he says. "I think the harder part will be identifying new talent that we need to grow our agency, and figuring out ways in which to regularize our inflows, with the constant pressures that we have both from a selling standpoint and from the legislative burden we'll face in the coming years. That's what's on my mind when I think about taking over at some point."
Ashe likes what he sees in Chris. "He is very bright, very hard working, has a great work ethic," Ashe attests. "If there's one thing that I think bodes well for his future, it's that even though he's just 25, he seems to do well with older clients. I think part of that is because he's prepared, and he knows what he's talking about. When I would accompany him on joint calls, he would throw in a couple of comments, and then people would ask him a question. It didn't take long before, all of the sudden, I was an observer, and they were actually directing their questions to him."
This is important from a couple of perspectives. "Take the example of some medical practice clients, where I have 30-plus year relationships with the principles in the firm. They're bringing in younger physicians. These younger physicians, when they meet me, will extol the relationship that I've had, but then ask, 'How long will we have you?'
"That's a legitimate question, especially when we talk about the value of relationships. They want to have the same type of relationships, and the new dynamic for me has been to have Chris at my side and be able to demonstrate that there is continuity, there is successorship, and there is a person who is familiar with their business, with the products, and is of comparable age so that, you know, all things being equal, they should be able to continue that type of a relationship that existed with the founders of the business."
Chris grew up seeing Ashe participate in the Million Dollar Round Table and various other organizations. In fact, in 2000, when he was 14, Chris gave the invocation at the Million Dollar Round Table meeting in San Francisco. "He stood onstage and spoke in front of 7,000 people," Ashe remembers.
Chris remembers that two-and-a-half-minute speech as "a baptism by fire."
Says Ashe, "That moment has stuck with him, and not just because of his perception of what the business was about. He met people. He listened to the stories that were told. He saw the application of the products, and he began to be imbued with the philosophy of the business. And to a certain extent, I took it as great affirmation of what we do when he decided to come into the business."
So Chris joined the business with no illusions. Says Ashe, "I certainly didn't sell him on what a great business this is. He knew about the tough nights. He knew about the commitments and the times that I was exhausted when I was working with the MDRT. In fact, we used to say MDRT stood for 'many days really tired.'
"But there was realism. It was a realistic estimation of the wonderful things that are generated by our business and the tough things that have to be done to be successful in the business." EBA
Managing the transition to the next generation
Do you have any advice for advisers who may be planning to work a son or daughter into the business?
Well, you certainly can't force any of your kids to come into the business, and I would never want to place that obligation on a child. But I think one can foster an interest in the business and in succession planning by being an actively involved person in the industry. You know, I think of the old Stephen Covey line about "no involvement, no commitment." If you want your kids to think about coming into the business, then I think they have to see you involved and committed in your business.
It isn't just a matter of Dad or Mom went to the office, and they made a couple of bucks, and they came home. You have to have passion for what you do. You have to love what you do. And I think those of us who have passion and love for what we do get involved. And so that would be, to me, if someone said, "Gee, I really like what I do, and I'd like to think about my kids maybe coming into the business with me." Well, lead the way by showing your passion and commitment and just almost by osmosis, the kids will begin to pick that up.
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