Interviewee Name: John Klotz, President
Company Name: Northwood Mortgage Life Insurance Corporation
Website: http://www.northwoodmortgage.com
John Klotz – Your Invisible Mentor
Avil Beckford: Tell me a little bit about yourself.
John Klotz: I’m an insurance and investment advisor and have been in the industry for close to 20 years. I own my own brokerage.
Avil Beckford: What’s a typical day like for you?
John Klotz: There is no typical day, but a big part of my day is meeting with clients. I have a significant practice of about 1,000 clients who I do business with for both their insurance and investment needs. So for instance, a typical day, with the exception of today because you are interviewing me, is that I’ve got a meeting with a client at 11:00 o’clock and we are going to go over his risk management policies: critical illness, disability, life insurance and also once we put all that in place he is going to want to talk to me about his retirement plan, which include his RRSPs (similar to 401K in the US), tax free savings account, some pension plan and things of that nature. And then at 3:00 o’clock I’m meeting with a supplier, 5:00 o’clock another client to do an annual review on his investments, and at 7:00 o’clock I’m going to be sitting down with a client to talk about their insurance needs. In between that, I also deal with new agents. I have a sales force as well who I meet with who do similar things and my goal is to help them as well as recruit and find new advisors. So that in a nutshell is a typical day.
Avil Beckford: How do you motivate yourself and stay motivated?
John Klotz: I’m very fortunate in that I love what I’m doing and I think that’s a big piece of it. I love the client interactions, sitting down with people helping them. And the biggest compliment, the biggest turn on for me, is when a client says to me, “I trust you.” I’m always looking for that, and that’s what motivates me, is to gain that trust. I’m compensated extremely well for that trust, but that isn’t my driving source. In terms of motivation I try to stay physically fit. I run three to five miles every day, which on one hand is physical and on another it’s spiritual to keep my head in gear, and I set goals.
Avil Beckford: If you had to start over from scratch, knowing what you know now, what would you do differently?
John Klotz: In a way we do start from scratch. The focus of this business, it’s a commission-based business so at the beginning of every month you are kind of a bum again and I don’t know if you’ve heard that from other people who are in sales professions, so you are always starting out again, and what you do is you want to create goodwill with people so if I were to start over from scratch, I would try to identify a target market more readily than I did in the beginning to find people I want to do business with.
I would create ways of getting in front of those people and there are some great books I have read along the way, and one is Opening Doors, so if you want to work with physicians you’ve got to learn and think like a physician and you’ve got to get involved with their associations, and you’ve got to join groups, and you’ve got to be on committees, and you’ve got to write articles, and do seminars and you have to learn what is important to physicians, and ultimately you do that by associating with them. So one of the things I would probably do if I had to do it again is to really identify my target market and pursue it doggedly.
Avil Beckford: What's the most important business or other discovery you've made in the past year?
John Klotz: I’ve gone through a transition. I’ve been an advisor for 20 years, basically offering services to my clients in both insurance (life, disability, critical illness insurance) and investment. About three years ago, I stepped out into running my own brokerage and that has been a huge education because dealing with clients is one thing, managing and building a sales force to deal with clients is a whole different animal, and I have really learned some interesting lessons.
I thought when I graduated from university I could work for just anybody, and the truth was I couldn’t. I met some people along the way who I couldn’t work with, maybe they were too demanding, or we didn’t share values. I found that as a manager I cannot have just anybody working for me, there has to be some commonality between me and the other person. And that’s been a hard lesson but a good one.
Avil Beckford: What’s one of the biggest advances in your industry over the past five years?
John Klotz: The insurance and financial services Industry I think has always been a little behind the times in advances, but one of the big things that I have always embraced is social networking, and I think that’s been a huge plus and a minus for the business. A lot of people are interacting with people without ever seeing them or being in front of them and our business is still very much a knee-to-knee business, you really can’t know a person unless you are sitting either in your office a metre away from them or in their home, or in their office, but I still think there are some opportunities with social media that has helped to advance at least communication with clients on a certain level.
Avil Beckford: What are the three threats to your business, your success, and how are you handling them?
John Klotz: There are always threats, there are always other competing forces coming in to the business. The banks have always wanted a piece of the insurance business, so that’s a threat. And I don’t think they are going to pursue it that doggedly due to legislation.
I don’t feel that I am competing with other advisors. There are other advisors out there, and you sometimes end up in competitive situations. But there are only a handful of really solid insurance and investment advisors, the people who have been at it for 10, 20 years. There are a lot of people who come in and try it so I’m not really threatened by other advisors. That’s not a threat and that’s how I handle it. Sometimes during a competitive situation you simply have to prove that you are better or you can offer different value added services.
Avil Beckford: What’s unique about the service that you provide?
John Klotz: We do a few things at Northwood Mortgage Life. So what I did about three years ago, I partnered with Northwood Mortgage Ltd, the largest independent mortgage broker in Toronto. They have approximately 200 mortgage advisors offering mortgages to tens and thousands and hundreds of thousands of people in the Greater Toronto Area. We offer a service to all the clients at Northwood Mortgage. We offer them insurance – life, disability, critical illness insurance that is much more competitive than the bank products for a number of reasons.
One is our products are portable from mortgage to mortgage, house to house. The bank products that they sell will cover the debt on the mortgage so long as it’s at that institution, but if the client moves it to another institution the client will have to waive their mortgage insurance. With our products they follow you around which is great because clients need to be able to move their mortgage around, and they do, right?
One of the benefits of our products is that it’s just portable, it moves from house to house, mortgage to mortgage so you don’t have to constantly re-qualify for your health, which becomes harder as we get older. Another benefit is that we offer products that have returned a premium, so at the end of say 15 years a client hasn’t used their life insurance or their critical illness insurance or their disability insurance then they get their premiums back, which is great.
If you ask most people who currently own auto insurance, and said, “At the end of a 10, 15 year period, if you haven’t really used your insurance, you haven’t killed anybody or had that massive car accident, if we charged you a slightly higher premium, and at the end of that 15 year time you haven’t made any claims on you auto insurance, or if they were just for little fender benders would you pay that premium if we gave you your premiums back?”
Most people would say, “Yes, that’s a great feature.” And there are some other things like our products tend to be better underwritten than various lending products and there is also a whole CBC Market Watch documentary done about lending institution products where they are underwritten at time of claim so they are underwritten when you need them, whereas our products are underwritten right up front.
We are a little bit more thorough, and ask a little bit more nosy questions, but we know if we do it right, and there is a claim, we will pay out, whereas they can’t say that for other lending products offered through various banks and so on. We feel it’s a superior product, not only that, we have the opportunity and we feel it’s really important especially on the mortgage side of things to deal with an insurance advisor as opposed to a mortgage agent selling the lending institution mortgage insurance products. We actually have professionals just dedicated to selling the insurance as we’ve been talking about earlier.
I work on more complicated cases, I’m a higher end advisor who works a lot with corporations, showing them how to put insurance through their corporation as opposed to individually.
Avil Beckford: What do you observe most people in your field doing badly that you think you do well?
John Klotz: That would require me to criticize some of the people in the industry. There are a lot of great advisors out there, and I’m friends with a lot of them, and have a lot of respect for them. I think sometimes the public is very down on financial advisors, but I respect people who go out and get their Certified Financial Planning designation and their Chartered Life Underwriter and Chartered Financial Consultant and the Registered Health Underwriter and a bunch of other designations. To me an advisor who educates himself really takes a commitment to the industry. I guess the advisors who I feel might not be doing that are people who just get their licenses and don’t constantly try to improve themselves through education. There’s a lot about ethics when dealing with people in these designations that I think is really important.
Avil Beckford: Describe a major business or other challenge you had and how you resolved it. What kind of lessons did you learn in the process?
John Klotz: One of the hardest things I find is finding good people in this business, and like I said, I was a successful advisor for 20 years. I am now in a position, where as well as running my practice, I’m in a management role building a sales force. It’s hard to find good people and that’s been a major challenge for me. We are doing some advertising on 680 News to look for new recruits. We’ve got various websites where we’re looking for people.
We’ve decided that a target market for us is more mature workers, that are maybe people in their thirties, forties whatever or sixties even, who have basically had a career and now want to have a new one and this is potentially very good because an insurance and investment carer is a wonderful career, but it takes some stick-to-it-tiveness and maturity and so the challenge we’ve had is defining who to recruit and as I mentioned we feel older workers may be our target market, which is very interesting to hear because everyone wants the young workers. I want more mature people in this business.
Avil Beckford: Tell me about your big break and who gave you.
John Klotz: I’ve had a few, but I’ll tell you about one of the earlier big breaks that I had. When I first started in the insurance and investment business I really didn’t have much of a market. I was 28 years old and I really hadn’t defined myself as a financial advisor and I think a lot of people were sceptical of me being able to hold this role. But I knew I was good, and I knew I could be good at it because it appealed to me on so many levels.
I decided I wasn’t going to pursue my family members and friends. I thought they would find that overbearing and I went out and developed marketing plans to approach people, sent out letters and made phone calls. But every morning I would drive round at 7:00 am and look for nice cars in front of businesses then I would knock on the door and would meet business owners every morning. So every morning I would get up early and go around looking for what I thought were successful people. And I met a lot of them, and some of those relationships that started 20 years ago blossomed.
One of my clients who I met this way, ran a major association, an association across Canada. We became very good friends. And this individual turned to me at a certain point and said, (and remember I’d been out there banging on doors) “I’ve got an association with 3,000 members across Canada and would like to be able to offer them insurance products.” And I immediately said, “No problem, I’ll take care of it.”
I proceeded to find out how hard that was to offer medical and dental benefits to members across Canada, and I partnered with a firm who actually did that. I was introduced to somebody at this firm and we worked on this case together and the firm liked me a lot, the way I’d handled this client that they hired me. I spent eight years offering association benefits across Canada with them. It was great, I started off as a general broker and rose to Vice President and I had a great run there then I had the opportunity to start my own brokerage.
And I guess that’s another break that I had, was keeping my eyes open and having the opportunity to be the boss, and that’s basically what I am now.
Avil Beckford: Describe one of your biggest failures. What lessons did you learn, and how did it contribute to a greater success?
John Klotz: In this business you fail at times if you don’t get clients, and you don’t get business, and not everyone likes you. Sometimes people hire you as their advisor and a few years later they fire you. Someone basically decided they didn’t want me to be their financial advisor anymore and they sent me a letter and let me go. What I do firstly is take the emotion out of it. While it’s personal you can’t let it stop you. And what you need to say is, “Okay, what they’ve done is freed me up to pursue other business.”
I generally send out a letter, and I have an email called the “Good Loser” email, and if anyone is listening to this you can think whatever you want. You have to conduct yourself as a gentleman 24/7, think of yourself as a politician. If someone just said, “I don’t want you to be my advisor, you’re fired,” I have a letter that I send out saying,
“Firstly, thank you for the business over the years. I enjoyed our relationship. All the information and planning I gave to you I felt that I had your best interest at heart. I understand that this is just a natural part of being in business, sometimes you lose clients and the door is always open if you want to consult me on anything else. Sincerely, John Klotz”
Whatever they did, they can fire you nicely, they can fire you meanly, at least the way I carry myself is really important to me that I not send them off a snotty letter saying, “You know, how dare you, I did my best.” That’s not the way to conduct yourself. And very often what that will do, is that by not insulting them, though the relationship didn’t work out, sometimes they may refer others to you. It happens.
How can you use this information? What do you have to add to the conversation? Let's keep the conversation flowing, please let me know your thoughts in the comments section below. Many readers read this blog from other sites, so why don't you pop over to The Invisible Mentor and subscribe (top on the right hand side) by email or RSS Feed.
