Calculated Risk Taker

By taking the appropriate risk at the appropriate time, Paul Allen Dyer has become an exceptional seller of long term care insurance and senior market advisory services.

By Stephen P. Brown

Life-long Bangor, Maine resident Paul Allen Dyer gives new meaning to risk taking. On the business front, Dyer has always lived by his wits. When he was a young teenager, he started a lawn mowing service, which grew sufficiently to require additional capital and employees. This entrepreneurial work ethic was instilled in Dyer by his father, who believed that everything in life had to be earned. Recalls Dyer: "I was an entrepreneur at an early age because of the tutelage my father gave me about money and work.

" Unfortunately, tragedy struck in the early 1980s. When Dyer was 17, his father died suddenly, leaving the family to fend for itself. Fortunately, a lawn-mowing client stepped in to guide Dyer through his tumultuous teen years.

This client (mentor is more like it) was also the vice president of a general agency, and he naturally guided Dyer to insurance selling as a vocation. Initially, Dyer rebelled. "All I could envision was wearing plaid pants and a wide tie and having people run from me at cocktail parties," he jokes. "But he kept on me, and that's the direction I took. I actually sat for my insurance license test two days after my 18th birthday."

Thanks to his mentor's guidance and a nose-to-the-grindstone attitude, Dyer soon became an accomplished salesman, as well as an accomplished trainer of salesmen. Indeed, he has sold hundreds of LTCI policies and successfully trained more than 150 agents.

Dyer has also become an accomplished skydiver. In fact, he's made over 1,600 jumps - averaging 200 to 400 jumps per year. "I've jumped in Hawaii, Mexico, all over the United States," says Dyer. "The only place I haven't jumped is in Europe because the rules and regulations for getting a parachute overseas are a bit complex."

What's more, Dyer has become a sufficiently competent skydiver that he now takes magazine-quality photographs during jumps. In fact, his photographs have appeared in Skydiving Magazine and Parachutist Magazine.

Dyer credits skydiving for improving his business acumen and mental acuity. "When you're hurtling toward the ground at 130 miles an hour, you have to focus," he says. "You can't worry about what the NASDAQ is doing."

To date, Dyer has only had two incidents that have been cause for concern; both involved a malfunction of his primary parachute. Says Dyer dryly, "Those incidents taught me that I could rely on myself and not panic under pressure. A lot of people can't say that."

In addition to enjoying skydiving, Dyer also enjoys senior market success, which he has achieved through Legacy Insurance and Financial Advisors, his full-service financial advisory shop that specializes in selling LTCI. Skydiving, practice building, the senior market, and selling LTCI are just a few of the subjects Dyer broached during a recent interview with Senior Market Advisor. To learn what it means to be a calculated risk taker, read on.

SMA: What was the first product you sold after you received your insurance license?
PD: In 1983 I started selling long term care insurance. I was going door-to-door and doing one-stop closes.

SMA: Door-to-door selling sounds like a tough introduction to the business.
PD: It certainly made me tough. I wouldn't recommend that everybody start door-to-door, but it's where I started. I would go out and then return to the office and say, "Gee, this really seems difficult." But my mentor would employ a little psychology on me: He would counter, "I don't know why you're having a hard time because everybody else thinks it's easy as pie." After a while, it did turn into something that was easy to do.

SMA: What else were you selling besides long term care?
PD: I also sold Medicare supplements and disability income policies. This was during the time when Medicare supplements were coming into their own.

SMA: Was it difficult making a living selling long term care door-to-door?
PD: Not really. I was pretty good at it. By 1984, I had over 100 LTCI sales. I always took a different approach, and I still use that approach today: I don't talk about the benefits of long term care; I talk about the need for long term care. I liken it to heart surgery. If a physician told you that you needed a new heart tomorrow, you probably wouldn't haggle over the price. Your overriding concern would be the need, and you would be willing to pay to have that need satisfied.

I always talk to people from a needs standpoint. Once they truly understand the need for and the odds of requiring long term health care, the price becomes immaterial.

SMA: Were your door-to-door contacts completely cold?
PD: No, I had direct-mail leads. My contacts would have already inquired about getting information on Medicare or Medicare supplements or something of that nature. Once I had the lead, I would go to their house. Their reaction would be, "Well if I sent in for it, come in and let's talk about it."

If they let me in, I was usually able to get them to buy. It was hard work, though. I used to make three to five presentations a day, five days a week. Anyone who has any experience selling insurance knows that can be extremely difficult.

SMA: What percentage of the contacts let you in the house?
PD: I would get in about 80 percent of the time. In the early 80s, the world wasn't quite as cynical as it is now. There was no Internet. Once the Internet came around, though, people had other sources of information. They became less interested in hearing about products from somebody who might sell them something at the end of the conversation.

SMA: Is it still possible to make a living selling only long term care?
PD: I think so. As a matter of fact, a few weeks ago I went on a sales call with someone who didn't believe that you could sell only LTCI. We went on a cold call to a house that I had never been to before, knocked on the door, gave our presentation and were let in. Three hours later we left with a long term care application and a check

SMA: Is underwriting becoming a greater concern with LTCI?
PD: It's always a concern; that's why it's important to manage expectations. I always let the client know that an insurer could reject him for medical reasons. If that happens, we continue to search for an insurer that will accept him, even if it takes going through 10 or 15 different companies or going to a non-typical approach like life insurance with long term care benefits or an annuity that pays for long term care. We beat the bushes for our clients. An advisor has to be determined to get the need met.

SMA: How much LTCI have you sold during your career?
PD: I've done over $4 million of individual long term care premiums.

SMA: Given the recent difficulties in the LTC industry, is it becoming more difficult to get people underwritten?
PD: LTCI is a relatively new baby. It's only got a 20-year track record. Companies are coming in and they are finding that they don't like it or that they're not well capitalized. I'm used to the constant coming and going of companies and underwriting guidelines. To protect my clients, I go to the companies that are sufficiently diversified so that they don't automatically increase rates every time they encounter a problem.

SMA: Do you do much marketing?
PD: I use a combination of marketing materials. I do workshops. My fixed annuity provider has a terrific set of workshops that I use. I also use TV commercials, radio ads, print ads, and referral networks. I market across the board in all the different venues.

SMA: Do you have any marketing tips for producers with modest budgets?
PD: Someone who is relatively new to the business has an unlimited amount of marketing resources at his disposal. The most important thing he can do is determine which resources he is comfortable with.

The biggest marketing problem I've found is that people are too quick to judge, so they jump around a lot. They'll try something and if it doesn't work immediately, they'll abandon it and try something else. Or, they'll try something, and if it works, they won't have a system for measuring the results so that they can improve it. They need to simply pick a marketing plan and then execute that plan repeatedly over a long period of time, making sure that they are tracking results and tweaking the system accordingly. Most salesmen, being A-type personalities, generally don't do that.

SMA: Why did you decide to leave your former employer in 1998 to form Legacy Insurance and Financial Advisors?
PD: I needed to get more into overall planning. I think the next big movement in the insurance business is life planning.

SMA: So you basically wanted to take a more holistic approach to advising.
PD: Absolutely. That's what I focus my practice on. I call us life planners and part of that means ensuring that we're at least bringing up long term care needs and addressing them in one of three ways: by having the client privately pay, having an insurance company pay, or by having Medicaid pay.

SMA: Is long term care still a significant part of your business?
PD: It's maybe 35 or 40 percent of the business we do at Legacy. LTCI is our cornerstone. It's where we start our conversations, and then that leads to other places.

SMA: What other insurance products do you offer?
PD: We've done a large amount of business in the EIA market.

SMA: Are many of your clients annuitizing their VA contracts?
PD: I'm leaning more and more toward directing people to annuitize. I don't think it's going to be an immediate thing, but annuitizing is definitely an insurance industry trend that's just in its infancy. It's going to be huge because people can't rip their money out of the stock market all at once. The latter stages of the baby boomer cycle are going to see a lot of people needing more predictable income.

SMA: Are baby boomers creating a more fertile senior market?
PD: Absolutely, particularly for long term care. A few companies have stepped forward with some pretty good campaigns. Few new offerings were created in the '80s. So for producers just entering the market today, the prospects couldn't be better.

SMA: Do you see any notable trends developing in the LTCI market?
PD: We're obviously seeing more companies that are willing to deal with the out-of-the-norm riders that enable family members to take care of each other. We're also seeing more alternatives to nursing home and home health care.

There's no way to tell what benefits we're going to need in six or seven years because they are just being developed. The companies and the producers that will be most successful are those offering contracts that have flexibility built into them.

SMA: What about the overall senior market?
PD: I think that the next 10 years are going to be the best years to be an advisor in the history of the country; even better than in the 1990s. I see opportunity everywhere I look. There's a shortage of planners and advisors, and more importantly, there's a shortage of qualified people.

SMA: Are more clients demanding one-stop shopping?
PD: Definitely. I started working toward that six years ago to get a jump on the rest of the industry. I think life planning is the next wave. Clients don't want to re-explain their entire life history and reveal all of their family secrets, divorces, remarriages, and complex wants and needs to six different professionals. They want to come into one place, sit down, explain it all, and then have one source to contact to report changes in their circumstance or to ask for advice. It doesn't matter if you do it in an internal network or an external network; it's the future for capturing the baby boomer market.

SMA: Does that mean it's going to be impossible to survive as just a salesman?
PD: I wouldn't say it will be impossible, but it will be harder to get a good start. If you're an independent, you need to grow to a point where you can bring everything in house, or you'll have to establish partnership arrangements. You'll need a good attorney, a good CPA, a good tax guy, and a good trust guy. You'll also need to have good back-office support.

I especially believe in having support so that you have more time to do what you do best, which is meeting clients and solving their problems. When I first started, I was taking out home equity loans to pay my staff, but it was worth it. Too many people get bogged down in doing all of their own applications and doing everything to the nth degree. They waste a lot of time. Don't spend time doing $10-an-hour work. Hire somebody who works for $10 an hour to do $10-an-hour work.

Also, spend the money to hire a good marketing organization. When I found a marketing organization that actually understood what life planning was and where it was going, I grabbed them and embraced them.

SMA: What information should an advisor expect from a good marketing system?
PD: He should expect all of the nuances that people spend a fortune trying to figure out on their own. A good marketing system does that work for you. They know that it's not any one big thing that makes a successful marketing campaign; it's a lot little things. They know things like when to mail an invitation to a client, what day of the week to have a seminar, what kind of parking lot the place should have, and what kind of headline to use in a flyer.

There are a lot of good marketing systems out there that allow you to learn what works and what doesn't from other people. Fact is, nobody's going to reinvent the wheel in marketing. I wouldn't doubt that the best marketing system was invented 200 years ago. Marketing is all about getting your message out to people who will read it. You can have the best flyer in the world, but if you can't get somebody to open the envelope, you're not going to get your message out.

SMA: How do you keep motivated?
PD: In the beginning, it was blind faith in the person who was training me. I had a good mentor who was very successful. People in the community loved him and regarded him highly and needed his advice. When I saw him in action, I would think, that's somebody I'd like to be.

But what really keeps me motivated to stay in the business is delivering claim checks to clients. I love receiving a family's thanks. I was hooked the very second I saw that I had improved somebody's life because I convinced him to get the right insurance coverage. Now I'm a financial-advising junkie. I know that I am helping a lot of people with my work. Because of that knowledge, I can't wait to get up every day and go do it again.

SMA: Are you sufficiently well known in the community that most of your new business comes through referrals?
PD: I'd say that about 60 percent of our A-clients come strictly from referrals. We're still doing marketing campaigns, and that's bringing in clients, too. A good marketing campaign keeps the pump primed. When things get a little slow, you just prime a little more.

SMA: Has not having a college degree been a hindrance in building your business?
PD: It was never an issue except in the beginning when I wanted to attract a few A-list clients. Now, though, it's not a problem. They already know me from talking to me and through the people that referred them to me. I'm self-taught, but that doesn't mean that I'm uneducated. In fact, I've become an education junkie. I didn't see the value in education when I was younger because I was ready to go to work and was already educated in the field. But now I find myself going back to school and taking more courses. I'm even moderating some courses for the American College, and I'm loving it. You've got to continually educate yourself. If you don't, you shrivel and die.

High-Altitude Networking

Believe it or not, skydiving can be more than a thrill-seeking excursion; it can be an excellent networking opportunity as well (try finding that tidbit in any marketing textbook), so says Paul Allen Dyer.

Recently, Dyer visited Personalized Brokerage Services (PBS) and led 40 of its employees on their first skydiving adventure. The jump was an overwhelming success for company and employees alike. In fact, PBS was so gung-ho on the experience that it sponsored the event and covered all of the costs.

Dyer also benefited from the jump, though more sublimely. According to Dyer, skydiving has been a boon to his business. "I always thought that they [skydivers] would be an eclectic group of circus freaks," jokes Dyer. But what he has discovered from his many skydives is that most of his fellow daredevils are extremely intelligent and very successful. "In reality they are more likely to be doctors, lawyers, and attorneys who can be potential clients or professional references."

Like Dyer, his airborne counterparts find that skydiving allows them to temporarily escape the pressures of business life. "We'd ride the plane to altitude and talk about business models and marketing techniques and things of that nature and then jump out in silence with smiles on our faces," says Dyer. "A natural fraternity develops that often can't help but develop into a business relationship."

©2000-2003 Senior Market Advisor & Wiesner Publishing

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