Securian's focus on ethical behavior comes straight from the top and runs right through the meeting department. As others pay up for sketchy practices, the 125-year-old company reaps the rewards — and awards — of taking the high road.
Not many financial services companies would welcome a call from Eliot Spitzer. The New York Attorney General (and now top gubernatorial candidate) had much of corporate America running scared in 2004 and 2005 as he went after corruption on Wall Street. The insurance industry was a big target, with the world's largest insurer, AIG, recently agreeing to a $1.6 billion settlement and the world's largest property/casualty broker, Marsh & McLennan, already paying an $850 million settlement, both resulting from Spitzer lawsuits.
Securian was singled out, too. As the good guy.
In his suit against a California employee benefits broker, Spitzer lauded Securian Financial Group Inc. subsidiary Minnesota Life for its refusal to do business with the broker because of concerns about undisclosed compensation (any form of compensation, including sales incentives, not made public to consumers).
“We first heard from the New York Attorney General's office in late 2004 when they requested information from us about the sales practices of others in the group life insurance industry,” notes CEO Bob Senkler. “We subsequently were identified as a company that would not comply with some intermediaries' demands for undisclosed compensation.”
Being held up as an ethical role model was no surprise to Securian employees, least of all Koleen Roach, director of recognition and conference planning at the St. Paul — based company. Since 1999, she'd been heavily involved in overhauling Securian's entire recognition program in light of new NASD rules regarding noncash compensation. When the rules were first published in 1998, she says, “we didn't spend much time thinking, ‘How do we keep our existing programs exactly the same but still remain compliant?’ The fact of the matter was, we couldn't keep things the same.”
But the recognition program, with its slate of incentive conferences, is critical to the company, a key driver of its remarkable producer retention rate: 95 percent among the top 500 advisors. “Recognition is as important as benefits and compensation in our effort to retain our financial advisors,” CEO Senkler says. “It's a simple matter of rewarding people for hard work and good performance.”
Enter the NASD
But what “performance” is measured, and how? Those were the $64,000 questions in the early 2000s, as traditional life insurers lumbered into the nimble world of financial services and got caught in the net of a new (to them) regulating body.
“The NASD ruling that all insurers [who are members of NASD] must be affiliated with a licensed broker/dealer, and all its captive advisors [agents] must be registered and licensed through that broker/dealer and trained to cross-sell products that offer clients a full range of financial investment opportunities sent most insurers into a bit of tailspin,” Roach says. “It couldn't be just life insurance anymore. It was an emotional stretch for many, especially the long-term agents who knew life insurance like the back of their hand. Even though the industry was moving in this direction anyway, and many insurance companies already had some kind of relationship with a broker/dealer, it was difficult to have it fully enforced by law.”
It was particularly difficult for recognition program managers, faced with long-established incentive qualification requirements that, essentially, might now be illegal. “Our entire recognition program had to change,” Roach says. “We went from a benefits, compensation, and recognition structure where advisors would qualify for programs based solely on total commissions, to a system of measuring performance that includes credit for business across all product lines.” In keeping with the new rules, she continues, “our programs no longer have commission-based requirements, nor do they single out the sale of proprietary life products as a requirement to achieve any type of recognition.”
It was no small adjustment for companies like Securian. “We were now going to be recognizing individuals whose business assortment may not be the most profitable to our bottom line,” Roach explains. “That said, the playing field for earning credits under our form of measurement is level, and we have continued to be successful and profitable despite the huge shift in business over the past eight years. It's important to note that a large part of the high ratings and profitability of our company lies in our retention. We're saving big dollars every year by retaining our best advisors. In 2005, we retained 100 percent of our top 100 advisors. That's huge in our industry.”
The Personal Touch
Another factor in the high retention rate is Securian's effort to involve the field in big decisions. “In 2003, we formed a task force of advisors, managing partners, and firm management associates, and brought them together for a day-long meeting to discuss recognition,” Roach says. “It was an eye-opening experience and it generated a lot of conversation and feedback from the field as to what motivates them.” For example, advisors agreed they'd been getting too many plaques over the years. “Recognition needed to be more personal,” Roach was told. “Our new program includes personal monthly congratulatory phone calls from senior management to the field in acknowledgement of milestones, and framed personalized letters from senior management congratulating advisors and managing partners for qualifying for a club.”
This personal attention and atmosphere of openness extends to the recognition meetings themselves, where the visibility and availability of CEO Senkler and the senior management team is becoming legendary. “I like to have as much one-on-one contact as possible with our advisors at these events,” Senkler says. “Recognition requires the personal touch.”
About 60 percent of the 50 meetings Roach's department handles annually are for Securian's agency partners. “We are a Career General Agency system, which means we don't own the agencies that sell our products,” she explains. “Wewith entrepreneurial-minded firms, licensed by our broker-dealer, who want to grow with the help of a strong business partner. They sell a certain amount of our products in order to remain on our contract, but they retain their own identities. So it's important that we solicit feedback from them to ensure that we are on the right track in terms of recognition.”
Taking Care of Business
Securian's biggest incentive meeting, the National Sales Convention, is held domestically in even-numbered years. After a 14-month qualifying period, the company sends out between 500 and 600 invitations, ending up with 1,000 to 1,200 attendees (see sidebar). In odd-numbered years, about 350 total attendees head overseas for the Leaders Conference, which also has a 14-month qualifying period, with attendees earning a higher number of credits.
The highest-level meetings are the Chairman's Club for advisors and the Premier Club for firms. A majority of these meetings follow a four-day, three-night agenda, with business each morning followed by afternoon networking activities (including, in the case of the National Sales Convention, a).
“What makes our events stand out is that we infuse them with our corporate culture,” Senkler says. That culture is one of “hard work, fun, openness, and honesty,” according to Roach. “Management puts a lot of time and thought into creating that environment at our conferences.” At the same time, she notes, “business is a huge focus for us at these meetings. We are very content-conscious. We don't ever want our field partners to think we are wasting their time. We are here to help them be successful.”
Keeping the Promise
Roach's department also manages Securian's involvement in insurance and financial services association events, such as the annual meetings of GAMA (formerly General Agents and Managers Association), LIMRA (formerly Life InsuranceResearch Association), and the Million Dollar Round Table (MDRT). “We do all award certification for MDRT and GAMA,” Roach says. “We are a huge MDRT house. Of about 850 full-time productive advisors, we have 412 MDRT members.” (MDRT membership in 2006 requires $69,600 in first-year commissions.) Roach's department publishes a bimonthly newsletter showing how advisors are tracking toward MDRT and toward the company's own clubs and honors.
Her department also handles all communication for the annual LAMP (originally known as the Life Agency Management Pow-Wow) meeting, and plans Securian's annual managing partners meeting to coincide with the LAMP event. “All of our managing partners are there, so our home office goes to them,” she explains.
That's the kind of efficiency that is a hallmark of the four-person conference department. “Being small, we have to be efficient,” says Roach, who joined Securian in late 1998, became manager when her boss retired in 2003, and was promoted to director the following year. Along the way she streamlined processes, consolidating databases and financial spreadsheets, for example, and brought with her a philosophy of continuous improvement. The department handles all aspects of conference planning, from concept and design through marketing and promotion, and Roach also tracks production and makes monthly reports to the field during the qualification period.
As with her peers, Roach finds compliance concerns part of her daily meeting planning life. “Bob always says that what we do is sell a promise to pay,” Roach says. “If clients don't trust us, then what good are our promises? A major part of being able to deliver on our promise to pay is not having to waste money paying fines. I take that very seriously in my role and work hard to ensure that our programs remain compliant.”
Hard Work and Humor
Securian remains privately held, and some might argue that taking the high road is easier when you're not faced with the pressures of a public company, continually answering to analysts and shareholders.
“We can have a five-year plan and work toward it at our own pace, making necessary changes along the way to adjust to the market,” Roach agrees. However, she adds, “we need to work really hard” in order to remain a strong and profitable company that is not a takeover target. “Part of that is making Securian a place people want to work.” The list of awards suggesting that the company knows how to do that is long: Securian has been named a Great Place to Work by The Minneapolis/St. Paul Business Journal four times, has made Computerworld magazine's list of 100 Best IT Employers for the past 10 years, and was singled out by AARP in 2004 and 2005 as a great employer for workers over age 50.
Roach believes that the company's atmosphere of hard work with a dose of fun thrown in to relieve the pressure is part of what keeps employees around. She also credits the “nonhierarchical” structure. “I've worked at Fortune 500 companies where the org charts go on for pages,” she laughs. “It's not like that here. Everyone is so approachable instead of bound to a complicated structure. I think it really fosters teamwork. People are more willing to jump in and help when there are not so many defined lines.” And for her, Roach adds, “the wonderful thing about management is they understand how important recognition is on every level.”
Six Secrets of a Successful Program
The National Sales Convention is the largest meeting on Securian's recognition calendar, with up to 1,200 attendees. “This program is a big deal,” says Koleen Roach, director, recognition and conference planning. “We try to get as many advisors there as possible.” Here are six ways Securian makes the most of the meeting:
- Newbies Need to Feel the Love
Qualification requirements are lower for new advisors. Securian's entire home office management group attends a first-timers' reception, complete with games or ice-breakers. “It gives all of our first-time attendees and their spouses or guests a private, warm welcome, a chance to meet senior management, hear about the importance of networking among seasoned advisors in helping build their businesses, and about the history, culture, and business strategies that have made and will continue to make Securian a great company to work for,” Roach explains. “We also hold a special breakfast the next morning for all attending advisors who are in their first three years in the business with Securian and we have two of our top advisors, who are also mentors, speak to the group. There's always a great buzz among the first-timers after that breakfast.”
- Make the Trade Show a Magnet
Securian's four-hour “market fair” is now a must-attend convention event. “In the past four years we've put so much into it that people really look forward to it,” says Roach. “They actually come through and go to each booth.” The lunch buffet, door prizes, and in-booth giveaways are part of that. So is the fact that CEO Bob Senkler and other senior execs personally greet everyone at the door and then stay for the duration. Booths include all internal departments (from compliance to IT) and strategic outside vendors (from a company that provides disability products to transaction-processing supplier Pershing). Roach retains control over the 40 to 45 booths, down to the tchotchkes: Individual exhibitors choose their trinkets from a list of available items and Roach's department does the purchasing.
- Let the CEO Walk the Talk
“It means a lot to receive face-to-face congratulations from the CEO in addition to hearing it from the podium in a roomful of people,” says Senkler. “All of us in senior management mingle as much as we can throughout the event and take opportunities to tell each advisor that we know how hard they work, that we appreciate their efforts, and that we celebrate their success.” Roach notes that even the dinner seating is assigned with a goal of getting as many people to interact with the senior management team as possible. “They are there to mix with everyone,” she says. “You might have the CEO sitting with a young advisor one night, then with someone who has just celebrated 20 years with the company.”
- Get the Awards Going
At the welcome reception on the first night of the conference, Vice Chairman Randy Wallake introduces the big award winners: the Diamond, Gold, and Silver Advisors of the Year and the Diamond, Gold, and Silver Firms of the Year. All of the winners are seated up front with their families and senior management.
- Let Loose on the Final Night
The second night of the three-night program is Securian's formal dinner, with attendees seated with their firms enjoying an elegant evening. The final night, Roach says, “is our let-loose night.” The hard work is done, the fancy dress is packed away, the speeches are over, and everyone can relax and enjoy each other's company. “Last year our final night had a ‘Survivor’ theme, with team competitions during the day and the final competition that night. People had a great time.”
- Make Everyone Comfortable
“We create a gathering place near the main ballroom where people can meet casually throughout the program,” Roach says. “We set up an Internet cafe, games, and TVs. In addition, each night there is a small, more intimate “music cafe,” usually with a singer and piano player, for attendees who prefer a quieter evening.”