onferences have panels about it. Entire studies are devoted to it. Community initiatives around the country try to tackle it — Latino financial literacy and planning.
Latino financial experts like Miami-based Frank Acosta understands the need, but more than that, he, as a successful Latino insurer, he understands the solutions.
But his role is more than just an educator to his fellow Latinos. As a successful entrepreneur and certified financial planner, Acosta is also a strong example of the possibilities that exist with some dedication and, well, planning.
Today, his company, Acosta Insurance Group, has three offices—in Miami, Boca Raton and North Palm Beach. His staff includes 50 agents, 25 administrative support employees and another 50 agents with their own offices. Acosta gives credit for their collective success to the business model of providing administrative infrastructure (office, phones, support staff) combined with a relationship with insurance powerhouse ING and the agency’s longtime position as one of the largest distributors for Blue Cross Blue Shield in Florida.
He opened Acosta Insurance Group more than 20 years ago and was fortunate to find early success working with some of the largest insurance companies in the country. Today, the company is one of the largest insurance and investment agencies in South Florida. He currently serves as a managing director for ING Life and is one of its key distributors.
A Cuban-born immigrant whose family arrived in Miami almost 50 years ago, Acosta mentors and manages more than 100 producers who sell securities and life and health insurance to Greater Miami and its Hispanic communities.
Like many others during that time, Acosta’s family fled Cuba for the Miami area in the 1960s. He was just over a year old. His parents believed the political situation would calm down in time, and that they would be able to return.
This never happened. His father struggled to find work and eventually moved the family to Puerto Rico, where his grandfather—a former bank president in Cuba—was working yet again in banking. After five years, the family returned to Florida, where Acosta’s father started his own business, and the family made its permanent home in the Miami area.
“Today, when you look at Miami, some people joke that with a Latin population of 65 percent, it’s the ‘closest Hispanic country to the United States,’” Acosta said. “When we came here in 1964, it wasn’t like that. I was the only Hispanic in my elementary class, in my grade. You don’t see that anymore, but back then there were ramifications.”
He remembers schoolyard fights and other issues inherent with the early migration of Hispanics into the community. Despite those early challenges, Acosta earned his bachelor’s and MBA degrees from the University of Miami before going to work for his father, who owned an aviation company.
“It had always been my dream to work for my father in aviation,” he said. “My father flew freighters and cargo airlines and converted passenger aircraft to freighters which were sold.”
The price of fuel skyrocketed during the OPEC crisis of the early 1980s, and within a few months, his father’s aviation company was in dire straits. Newly married, Acosta needed a new plan. The numerous banks and financial services companies that dominated the area prevented him from entering into the banking sector like his grandfather had decades before.
Acosta answered a newspaper ad for estate and financial planners. This led to his first insurance-related job at Connecticut General (today Cigna). He toughed out the training and started paying calls to Miami businesses.
After about nine years at Connecticut General and a short stint in pension administration, he decided to open his own insurance agency, Acosta Insurance Group, where he soon became a distributor for Blue Cross Blue Shield and started recruiting agents to sell health insurance for business owners.
For 15 years, he honed his skills inside the insurance business. Then, he received an important phone call. Acosta received a call from ReliaStar (which would become an ING company) asking him to run their Miami operations. Today, ING has two main distribution channels: one that Acosta describes as being like a grocery store with products on the shelves from which the consumer chooses; the other he compares to an Apple Store, with more intensive consumer information, training and servicing.
The latter, strategic distribution, is Acosta’s channel. “There are about 20-something of us in the U.S.,” he said. “I’m the second largest distributor for ING in the country in that channel and by far the largest distributor for ING in the Hispanic market.”
In addition, about three years ago, Acosta began the distribution of other types of insurance — homeowners, auto, commercial, life — allowing him to offer more products and services to the small business community, which, in Miami includes a significant number of Hispanics.
“Those probably have a greater need for service than anyone else,” Acosta said. “In a small company, you likely have the owner trying to do everything related to the finances, and they need a lot of service.”
Acosta naturally recognizes the differences in working with Hispanic clientele versus the general market.
He notes one material d
ifference: that fewer Hispanics take measures of long-term preparedness like life insurance, retirement planning or drawing up a will. According to his figures, in the U.S. about 50 percent of people have taken the time to do their wills, but in the Hispanic community that number drops to 25 percent.
A study conducted by ING Retirement Research Institute found that only 19 percent of Latinos currently work with a financial professional toward retirement planning, compared to 28 percent overall. In addition, 19 percent are contributing less than $50 per paycheck to their employer-sponsored retirement plan, compared to 13 percent overall.
Respondents cited lack of knowledge, debt and insufficient income as barriers to their ability to plan for the future. Acosta believes, however, it’s not only about knowledge or cost.
“I think it’s about not enough specialized agents working inside the Hispanic community,” he said. “I would say [my Hispanic background] has been an advantage because there are less people of quality working in the Hispanic community.”
One of the biggest challenges in a business owner wearing so many different hats is that he is often pulled in different directions. Part of Acosta’s “value proposition” is being able to deliver a level of service to the small business owner that facilitates everything related to financial services for him.
“With one phone call, we’ll help him insure his building or his vehicles or protect his family or get an attorney to do his estate planning documents,” he said. “We provide a level of comprehensive service that’s hard for him to find elsewhere.”
Yet the problem from an insurance distribution standpoint is some of the products pay so little compensation, that it is hard to service them properly when the commission is not enough to pay for the agent’s costs.
For example, a small business may have two or three employees, and the health insurance commission may be only a few dollars per month. By providing multiple services to small employers — health, auto, workers compensation, life, disability — the client is creating enough revenue to make comprehensive services cost-effective for both the agent and the business owner.
The biggest challenge for any business is finding clients, even in such a large community as Dade County. Acosta points to a main reason why the previous generation of insurance agents met past failure: the model that has been pursued by many career companies called the “100 Man Story.” Industry trainees were asked to list 100 people (friends, family, former colleagues) that they knew; once trained, they would go to these people to solicit referrals, growing a network of prospects from their centers of influence.
“Quite honestly, that system was flawed in terms of raising prospects and doesn’t work because once you get what you can from those people, you’re not getting any more fresh referrals,” Acosta said. “People then leave the industry, so there’s tremendous turnover.”
Acosta puts a lot of resources back into his agency in order to ensure success for his producers. One aspect on which he places great importance is marketing. Ten telemarketers work for his agency, generating about 100 business owner appointments per week. By removing the added work and stress of creating appointments, Acosta is giving them a greater opportunity for success.
He also understands the need to meet his consumer where they are and makes use of technology to service them. Acosta and his team have begun using EnterateInsurance.com, a site that offers employee benefits, auto, home, life, health and commercial insurance. With 10,000 visits in the month of May alone, it’s not just a gimmick.
The rate at which Latinos are adopting technology is far outpacing the general market. Acosta said that in order to keep up, a Spanish-language version will be launched this summer.
This, he says, is part of his business model of building successful producers in the financial services area explaining, “My job is to serve the producers, and by serving them they serve the clients.” In Dade County, where two-thirds of the population is Hispanic, Acosta’s business model is well suited to his environment — allowing him and his agents to further the education and readiness of Miami’s Hispanic community.
“If you don’t solve the problem of having people to practice your skills, it makes no difference how smart you are, it makes no difference what determination you have,” he said. New agents are carefully tended. Acosta expects them to be trained from a technical standpoint but also to learn by doing, accompanying seasoned producers into the field and watching client presentations and relationship building.
Even after training, new agents typically do not work alone on client accounts for about a year; all their work is done in tandem with an experienced producer.
“Some of what we do in my organization that you don’t see anywhere else is that commitment to help the market and grow the business,” Acosta said. “One of the reasons I can do that, is, by providing multiple product lines for the client, that distribution and product costs can be spread out over multiple lines that can generate the money I need to spend for marketing.”
And it’s yielded positive results both in retention and growth. From Acosta’s perspective, the next decades have him poised for even greater success. More than 20 years after launching his hugely successful agency, he still shows the optimism and determination that the company and its people will continue to thrive.
“We came from a place of tremendous growth, but there’s always new opportunity for anyone willing to work hard and adapt to a changing environment.”