Reputation

My personal reputation is perceived fairly consistently between my friends, family and peers at UIUC. I believe those who know me well would say I am hard working, energetic, innovative and goal orientated. As a result, my actions and choices I make on a day to day basis regarding school work, going out of my way to help others, creating new projects etc. resonate with my peers at school, who might not know me personally. I think my reputation has been built first by internalizing my goals and then, more importantly, voicing my objectives and using action to follow through with them. I believe actions are stronger than words in shaping perspective and those actions communicate the type of person you are to others.

More specifically, I have a strong reputation at school for being involved in with the Investment Banking Academy, Investment Management Academy and the Margolis Information Lab. People often seek my out by finding my contact information on the school’s website and ask for my advice in a variety of different segments. I help people put together career plans or provide contact advice to help them achieve their personal goals.  In addition, I am also involved in some of the newer organizations such as PRIME and The student managed investment fund, so I think I also have a reputation for knowing what is coming next and really wanting to grow UIUC’s finance program.

I personally have never “cashed in” on any situation by leaving my reputation behind. If anything, I have found that my reputation has been able to provide me more attractive opportunities. My track record often allows me to volunteer for really good opportunities that may not be available to the wider public. I’ve also had the opportunity to work on interesting projects and be creative on my own terms when possible.

Basic Principle-Agent Model

When I was 19 I interned at Northwestern Mutual, an insurance and wealth management firm. My title was “Financial Representative” and my job was to introduce the firm to a wide variety of potential clients in hopes of selling them life insurance and wealth management products.  I would meet with potential clients to assess their financial needs using statistics, simple finance calculations and basic rule-of-thumb insurance knowledge. For example, I might recommend a simple term insurance policy for a newly wed couple or long-term care insurance for a newly retired person. Each meeting I was accompanied by a senior member of the firm in order to boost my credibility and shared any commissions we earned from bringing in a new client.

On paper, this principle agent model was bilateral stretching directly from Northwestern Mutual to the client. Federal Law, legislation and the term “Fiduciary Responsibility” aimed to make sure that the incentives of the firm/financial representative and the client were directly aligned at all costs. Company policy was set so that all the advice a client was given was 100% in their own best interest and in the best interest of the firm. However, in reality this was not the case. The true model was more like a triangle where incentives rarely aligned with each agent.  Representatives were constantly incentivized to focus on selling products to earn more commissions and were also given financial bonuses as well as prestige from the firm. A simple example follows: The representative’s financial assessment finds that a whole-life policy would not provide any more utility than a term policy to a potential client. Both provide the same level of protection, however the whole life policy is more expensive. In this situation, you might find the representative push the whole life policy to earn more commission.  In this scenario the client receives the coverage needed to protect their family, but is lured into buying the “Cadillac” vs. the “Honda” of insurance plans. As you can imagine, many conflicts of interest arise.

The misalignment of incentives within the insurance industry is well known publically. Often, potential clients enter the meeting with a deep mistrust of the representative. The first job of the representative is to earn the trust and respect of the client. Over the summer I found that open communication, presenting mathematical evidence, discussing the range of options and using personal experience helped build trust. Throughout the course of the meeting you want to make it clear that your goal is to help the person’s family and put yourself in their shoes to make the experience as personal as possible. If the client doesn’t believe you, it is nearly impossible for a sale to occur. If the above-mentioned actions are taken usually the sale in the best interest of the client will take place, however in the eyes of the firm this is the bare minimum level of performance.

If the representative always acts in the best interest of the client they will likely fall behind in terms of average number of sales. Unfortunately, all too often representatives will earn trust and push the limits of their client relationships by convincing them to buy packages or products that are unnecessary. Many representatives will eventually get fired for either underperforming by not meeting sales goals. The best representatives meet both the firm’s and client’s expectations through volume. Instead of upselling clients, the representative will work twice as hard to acquire more clients. This scenario keeps the firms happy with increased number of sales and new clients without the financial representative breaching fiduciary responsibility. As you can imagine, representatives are often enticed to upsell vs. working more hours of the day.

Conflict in the Workplace

            Conflicts are fairly common in the work place and in settings where individuals are required to work in groups. As I mentioned in earlier blog posts, it is extremely important to understand the key components of an organizational structure to avoid conflict, and in some cases, conflict may be unavoidable. Miscommunication, personal differences, difference of opinion and many other factors contribute to the break down of group structures, causing conflict. I’ve described several situations, in which I’ve worked in a group setting to achieve a common goal, successfully, and now I would like to illustrate an example of a conflict, and how it was handled.

            Back in high school I worked at Carson’s as a shoe salesman. This was the first job I ever held and each day I learned something new about customer service, handling money and sales. Although the job wasn’t group orientated by nature, all the sales people helped each other out whenever possible. This may seem counter intuitive, because each person was paid on commission and it is in everyone’s best financial interest to only focus on his or her sales. One day while I was working a customer requested that I help her sort though some shoes on the shoe rack. Each time she found a shoe she liked I went in the back storage room to find and retrieve the shoe’s mate. On one instance I could not find the shoe that matched the mate the customer was interested in finding. I went to the costumer to deliver the bad news at which point she began to yell and demand that I bring her the shoe. I tried my best to calm to customer down, but at one point I said, “ I don’t know what else to tell you, the shoe was lost – I am sorry”. She continued to yell and demanded to speak with my manager.  After yelling and explaining the situation to my manager she simply ran off and left the store.

            Fortunately for me, my manager was not upset and completely understood the situation. This conflict stemmed from lack of communication and was my fault. My manager was able to look at both sides of the situation and pinpoint exactly what went wrong and what could have been done to improve the situation. From my perspective, I could not understand why the woman didn’t simply accept that the shoe lost. However, what I failed to do what share the information that I had with her. I should have told her that the back storage room is extremely disorganized in regards to sale items. The sale items are often older models, returns or defective and it extremely common for shoes to inadvertently get thrown away  - this is why we offer those shoes at such low prices. I strongly believe that if I explained that portion of the situation she would have understood and stopped yelling. Secondly, having a weak background in sales and customer service I should have offered her a discount on another pair she liked, or given her some other gift for her inconvenience.  For whatever reason, giving her a gift next crossed my mind.

            From the shopper’s perspective, I imagine she held the mentality of “ the customer is always right.” From the outside looking in, stores often look like tightly run corporate entities, but often they are mismanaged and operate only as well as the workers who run them. The woman clearly held one of the shoes in her hand and could not possible image that the other shoe was not located somewhere in the back. It simply made no sense to her. I am sure the woman had many other things on her mind and didn’t take the time to realize that losing a shoe isn’t that big of a deal in the perspective of an billion dollar business.  Overall, this was a valuable learning experience. It is important in the work place, group setting etc. to share all the information you have with the other person to make sure you are both on the same page.  In a customer service setting you need to make sure the customer is happy and if they do not have what they wanted, a good employee will try to compensate in some other fashion.