MetLife Inc., the largest U.S. life insurer, cut its adviser force by a third, eliminating 2,500 jobs as the company scales back variable annuity sales and turns to other nations for growth.
MetLife has about 5,000 advisers who sell insurance and investment products, down from 7,500 in February of 2012, Eric Steigerwalt, head of MetLife’s U.S. retail business, said at a May 21 investor day presentation. The New York-based firm lowered the number of agencies to about 60, from 85, he said.
“We’re not financing advisers who, frankly, were never going to make it in this business,” Steigerwalt said. “Our productivity is way up and we’re saving a lot of money.”
MetLife has said U.S. units should contribute 60 percent of Chief Executive Officer Steven Kandarian’s targeted $600 million in expense cuts as he seeks growth in emerging markets such as Chile and Turkey. Kandarian plans to cap variable annuity sales at $11 billion this year, compared with $28.4 billion in 2011, after low interest rates pressured returns on the retirement products, which can guarantee minimum returns for clients.
The insurer has rallied 41 percent in New York trading since Kandarian, 61, unveiled his cost-cutting plan in May 2012. That compares with a 25 percent advance in the Standard & Poor’s 500 Index.
MetLife has promoted alternative distribution methods, pushing sales through its website and using characters such as Snoopy from the Peanuts comic to pitch life insurance at some Wal-Mart Stores Inc. locations. The insurer plans to hire about 500 inexperienced advisers and 200 experienced ones in 2013, compared with a total of 2,200 two years ago, Steigerwalt said.
Salespeople are having a harder time breaking into financial-services fields, said Danny Sarch, president of recruiting firm Leitner Sarch Consultants Ltd. Rules have limited cold-calling, and potential customers have become more likely to turn to advisers suggested by friends.
“In the old days, as recently as seven or eight years ago, somebody just with a little bit of chutzpah could spend hours a day just calling people, asking whether they needed insurance,” Sarch said by phone. “With a little bit of charm and skill, you could find people who were interested.”
The largest banks are cutting back broker training. Morgan Stanley reduced its trainee class last year to 1,250 from 2,000. Bank of America Corp. plans to hire at least 1,200 trainees at Merrill Lynch this year, compared with 2,500 in 2012.