In today’s scenario, when IFAs sell multiple products - mutual funds, life insurance and health insurance, packaging these products in a single bundle can help increase business as well as productivity, says Jigar Parekh, CFP and Zonal Head of Prudent CAS
Nowadays, a majority of IFAs portray themselves as ‘Investment Supermarkets’ as they stock all products. It’s rare to find an IFA selling a single product. However, in spite of positioning oneself as an advisor, it is generally seen that the business focus keeps on changing periodically from one product to other.
When we look at client needs, then most clients need these three products – mutual funds, life insurance and health insurance. Yet, when an IFA meets client for selling a life insurance product, he/she doesn’t talk generally about mutual funds or health insurance and vice versa.
Though these products are complementary, we prefer to talk about them separately unless we are actually preparing a comprehensive financial plan. But let us face it - when it comes to retail clients, it’s difficult to make them understand the importance of financial planning either because they don’t see any need for it or IFA is not prepared for it.
Anyway, plan or no plan, there is no getting away from the fact that the client does indeed require these three basic products for his financial stability - mutual funds for his future financial goals, life insurance for the financial security of his family and health insurance for protection against medical contingencies.
An effective way to sell all these three products together is packaging and bundling the features of all three products and representing them as one product. Let us say, your client’s age is 30 years and you want to sell him/her a term plan for the sum assured of Rs. 25 lakh – approx premium 9000, health insurance family floater policy of 5 lakh of risk cover – approx premium 8500 and Rs. 5000 of SIP in equity MF. Now if you individually pitch this product to client, then it could take a couple of months to sell all these three products. On the other hand, if you club all these into one, you can pitch all three in a single meeting.
In the above case, the total annual investment and premium amount which you are targeting is Rs. 77500 (premium of LI + Health Insurance + 12 MF SIP). Rather than convincing client for buying all three products individually, you can convince him to pay Rs. 77500 for which he/she would get life insurance of 25 lakh on his own life, 5 lakh of mediclaim for his/her family and wealth creation of X amount. Once the client is convinced then you can explain him in detail about how he/she would get all these benefits from the combination of three products in detail.
Before you start marketing any bundled product, you should prepare your own marketing material such as your own presentation giving a brief about the benefits of the bundled product, product note with the illustration and if possible a dynamic excel calculator to give the different permutation and combinations for different age groups.
Benefits to the IFAs for adopting this kind of strategy are many. It saves time as IFA is trying to sell all three products in one single call. It increases productivity per sales call. Instead of meeting client again and again for different product, you are able to pitch more than one product in a single call. So the time saved per client can be utilized for new client acquisition. It increases the business and earning per client for IFA.
Finally, it gives you an advantage as you are pitching your own combination of products as your client will not find any readymade product in market which matches the benefit and features of your bundled product.
