Kenny Waldt is Banking on his Future

Meet Kenny Waldt, independent agent from down there in Houston. When I last checked in, back in November, he was toying with selling his $1.2 million revenue agency to a bank. Feeling pretty righteous about the value of his agency, he said: “They’re going to have to make it worth my while.” Apparently that happened. Kenny has just sold his agency, Wayland Hancock, to Frost National Bank, part of a holding company out of San Antonio with 80 financial centers around Texas. The deal should close in April.

Wayland Hancock is a family affair. Kenny’s grandfather founded the agency in 1953. His dad is chairman and CEO. Kenny is president. So in this way, Wayland Hancock is a “typical” independent agency. In another sense it isn’t. Let me explain.

Once mortal enemies, many agents and banks today are thinking about aligning. Banks have more resources. But they need you. They have customers, and they’d like to sell them more stuff, but they don’t know how. You can help.

Even better, Kenny argues, if your agency is diversified beyond property/casualty, there are tons of products and services you can offer to the bank’s customers. To this end, Kenny built a financial services machine. His revenues are split 45 percent in personal p/c; 35 percent in commercial; and 20 percent in life, health and employee benefits. He’s a fan of financial planning, where he methodically, relentlessly cross-sells to his commercial accounts all sorts of life insurance and retirement products. Indeed, executives at Frost National Bank point say they’re “delighted” to offer those non-p/c products to the bank’s customers. I’ll bet they are.

Since I’m the inquisitive type, I asked Kenny if he is so sure consumers want to buy all their insurance and financial services from an insurance agency. Aren’t they worried about putting all their eggs in one basket? Kenny has a different view. “I think the small customer can become more important when they can put more through one place,” he said. “This was my selling point with a small commercial prospect just last week. When they spread their businessÐp/c, group, personal lines, etc.Ðall over, they become even less meaningful to four or five different agents. When it’s all in here, they get to know more of our staff and they get more value. Now, if we add other financial products it should strengthen the relationship.”

What advice would Kenny give agents who are considering a sale to a specific buyer? He says a “common culture” is key. That means building personal relationships as well as sharing a vision of a sales culture. “I believe an agency needs to understand how to bring all of the insurance and financial products to the table to sell. We should cross-sell with teams of expertise.”

But the best way to get ready for the future, he says, is to plan as if you would never sell. “Live by the best practices and diversify…I think agents should manage for a profit. That is, be efficient, cross-sell, add profit lines like life, annuities and benefit programs.

“I don’t believe every agent will do this. Then again, I don’t believe all will survive either. We are entering into the financial services world where people will change buying habits.”

Life after merger will be interesting, Kenny acknowledges. “The transition is just beginning. We have a lot to do. There are many things to work out, like where to set up shop. We will probably be [headquartered] in a bank location with reps in the branches. I really want to max out technology so we can [continue to have] low expenses and high profitability.”

What about the proceeds from the sale? “I won’t be as rich as everyone believesÐI just like to let them imagine,” he says. (Come on, people, you gotta love this guy.) “But invest in such a way as to be much better off by age 50. Plus, the prospects are great to make a lot more money guiding the development of this agency. I’m learning as I go.”

Kenny says one agent asked if he had a “back door” to get out of the deal. Nope. “If you act like it won’t work, you set up to fail. I intend to make it very successful. I believe you do it with all you got or you shouldn’t do it.”

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