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IN THE FIELD

Boxes and Cubes

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Guy Baker was becoming frustrated as he tried to educate the five members of a CPA firm on the value of buying life insurance to fund a buy/sell agreement. The CPAs were having a difficult time understanding what he was attempting to explain to them.

The whole presentation could have imploded, but Baker was resourceful. He asked the CPAs, “Do you guys really know how life insurance works?” They looked at him blankly and said no.

“So they had a tablet on the wall and I walked over to the tablet and taught them CLU Part 1,” he recalled. “And when I was finished, they said, ‘OK, let’s do it!’ I said, ‘Do what?’ And they said, ‘Buy the insurance!’”

“And I thought, ‘Hmmm, maybe there is something more to this than I think.’”

Soon afterward, Baker had lunch with a life insurance prospect and taught her the same concept that won the sale with the CPAs. Within five minutes, she agreed to buy the coverage.

And so The Box was born.

Baker took his presentation and turned it into a booklet called The Box, a guide to the basic mathematics of life insurance. The Box has sold 500,000 copies. Its main concept is that life insurance is like a box into which you put money. The amount of money you put in depends on factors such as mortality costs, interest rates and life expectancy. The Box is a way of explaining how life insurance is priced and what actuaries consider when setting premiums.

Baker said he has used The Box as part of every life insurance presentation he has done for more than 35 years. The Box is one of five books Baker has written during his 53 years in the business. Baker, 74, is the managing director of BTA Advisory Group and Wealth Teams Alliance in Irvine, Calif.

He is the recipient of the 78th annual John Newton Russell Memorial Award, the highest honor presented by the National Association of Insurance and Financial Advisors to a living individual who has rendered outstanding services to the institution of life insurance. Baker will receive the award at the NAIFA annual conference in September.

In addition to working in the financial services industry for more than five decades, Baker served as president of the Million Dollar Round Table in 2010 and was MDRT Foundation president in 2000. He has also been a continuing qualifying member of the MDRT’s Top of the Table since 1977, one of only 25 agents to achieve this distinction.

Baker credits his success in the business to several major factors: his passion for helping people figure out what he calls “the Rubik’s Cube of finances,” focusing on problems instead of focusing on solutions or products. And also employing a tactic from his days of playing high school football.

‘Like A Rubik’s Cube’

Baker was about to begin his senior year at McKenna College in Claremont, Calif., in 1966, when Pacific Life recruited him for a college training program. He was one of 25 rising seniors who went through a training program in the summer and then sold insurance during their last year of college. Baker was the top salesperson in the group in terms of the number of lives covered, so Pacific Life asked him to train the next group of student-agents during the summer after he graduated.

“That was my summer job before I started graduate school,” he recalled. Baker went on to earn an MBA from the University of Southern California. He continued to recruit and train students for Pacific Life while he was in graduate school.

After he received his MBA, Baker interviewed for a number of jobs but discovered that the jobs he sought paid much less than what he could make in the insurance business. His early success in selling insurance made him realize he had found his life’s work.

“I found I enjoyed helping people think about their future,” he said. “I had a passion for it and I was good at it. I looked forward to every new engagement because it was like a Rubik’s Cube — you had to figure out how to put all the pieces together.”

Baker often compares giving financial advice to solving Rubik’s Cube, although he admits he has never been able to solve the actual Rubik’s Cube.

“It’s too complex,” he said. “But I think it is a great analogy because it is so complex and the movement of one color has an impact on the rest of the colors and alignment.”

As Baker progressed in the business, he made the move from what he called “kitchen-table sales” to the business market. Success began to build, and the business market remains a focus of his practice today.

‘Two-A-Days’

Baker experienced some difficulties in his early years in business. He thought back to when he was a high school football player in San Bernardino, Calif., a desert community where the heat affected everyone’s lives.

“Back then, we used to have what we called ‘two-a-days,’ where we would practice early in the morning before it got too hot outside and then we would practice again late in the day when it started to cool off,” he said.

“So I adopted that concept for my business, where I would find two people every day who would talk to me about financial services, insurance or whatever. They didn’t count unless I actually asked them to talk with me about insurance. If I asked them to have coffee with me, it didn’t count. They had to know why I was coming and what I wanted to talk about. And if they said, yes, they would talk to me, I counted it as one of the two for that day.

That was the way I kept myself on track. I didn’t pay attention to any other metrics. I just knew if I got two people a day to say yes to talking to me, that I would have the activity I needed to be successful.”

Today, Baker said, “I have so many things coming at me from so many different directions, I really don’t have to spend time finding things to do — they find me. But I like to keep track of the fact that I’m on goal and I’m headed where I need to be.”
Baker began to make a shift from life insurance sales to money management in the early 1990s. By 2012, it had become a major part of his practice.

His 16-person agency has two main areas of interest, Baker said. “One is working with business owners, helping them transition their business, business succession, estate planning and retirement, attraction and retention of key people. That includes 401(k)s, pension plans, executive compensation.”

The other is asset management. “So when they sell their business, someone has to manage those assets. We help clients figure out how to answer the three great questions no one can answer about retirement: What’s my number? How much do I have to save to get to my number? How do I invest it so I make sure I get my income to my number?”

Baker serves the high-net-worth market, individuals who have assets of between $2 million and $50 million. Reaching this market and being successful with it, are two separate issues, he said.

“Reaching this market is done mostly through word of mouth and referrals,” he said. “When you’ve been around as long as I have, people either know you or they don’t. And if they know you, you have a chance of working with them.

“As for being successful with them, you need to learn a consulting process. I think that too often in the insurance industry, people are trained to be product-driven, solution-driven. I had to train myself to be problem-driven.”

Baker’s clients have multiple financial problems for him to work through with them, and he said that’s the fun part of his practice.

“As I said, it’s like a Rubik’s Cube. And the thing that’s so attractive about this industry for me is the complexity of those problems and the ability to sort them out and figure out how to put an integrated solution together,” he said. “So I think it’s the consulting integration process that makes it very interesting.”

A Lot Of Changes

Baker said the two biggest changes he has seen in the business during the more than half-century he has spent in it are the expanding variety of life insurance products in the market and the ever-shifting tax laws.

“When I came into the business, the only permanent policy available was whole life,” he said. “Then it shifted to variable life, universal life, indexed UL. And now IUL is getting a lot of variations. I think understanding the complexity of all those products and how best to fit them to your clients’ needs is an important component when you’re dealing with life insurance.”

As for taxes, “we’ve been in and out of estate taxes, in and out of income taxes,” Baker said. “So you must constantly keep up with the tax laws and helping people keep in perspective that what the tax laws are today are not what they are going to be the future.”

In addition to his passion for the complexities of finance, Baker is driven to educate others through his writing. His first book, Baker’s Dozen, is a compilation of the 13 principles that he learned at a young age that helped him manage his own personal financial circumstances.

“I wanted to write them all down because I thought they were principles that would help anyone who wanted to learn them and apply them,” he said. “I thought it was important to document my own path and the things I had learned, so I at least had something to refer back to.”

The follow-up book to Baker’s Dozen is Market Tune-Up, which Baker described as “all the things I learned and changed in my business to make Top of the Table 42 times.”

Another book, Why People Buy, “is really the heart of the selling process,” Baker said. “It’s important for people in our business to understand that we sell problems, not solutions, and the buyer has a process that we need to understand and follow.”

Two Innings Ahead

Scott Brennan, who was MDRT president in 2013 and served on the MDRT Executive Committee with Baker, described him as having “the brain of an engineer applied to the life insurance business.

“He can take a problem and break it down into three or four separate components,” Brennan said. “They say really great baseball managers always think two innings ahead. That’s how Guy operates. He is always ahead of the curve. He thinks deep, big, great thoughts, and he is incredibly bright.”

Baker and his wife, Colleen, have been married for 52 years. They are the parents of four children: Stacy (deceased), Todd, Andrew and Ellen. They have 10 grandchildren and will soon have six great-grandchildren. Todd and Ellen work with him in his practice, and Todd’s son and daughter work there as well.

Baker loves to play golf and play the piano, and is active in his church. In addition, he obtained a Ph.D. in financial planning and investments from

The American College in 2018. He was part of the college’s first cohort in that doctorate program.

Looking ahead, Baker said he has no plans to retire soon, but he is laying the groundwork for his practice to be successful after he does retire someday.

“I’m building a team that will be able to step up and take this business and run with it. So that’s my primary objective,” he said. “My secondary objective is to build retention income for that company so they don’t have to worry about how they will pay the overhead every month and they can concentrate on growing the business.”

Baker has been a leader in several industry organizations, and he said associations must do a better job of collaborating and building on each other’s successes if they are to survive.

“Associations need to do a better job of defining why they exist and why they are of benefit, and then use that to sell their value proposition to sell their membership.”

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Follow her on Twitter @INNsusan. Contact her at [email protected].


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