What’s in your wallet?
November 30, 2011Affinity – the connection between an individual and an organization that generates a feeling of “belonging” or, even more important, motivates individuals to act collectively on behalf of the institution – is the characteristic that, if it really exists, has the potential to differentiate fraternals from commercial insurers. I’ve been giving the notion of “affinity” considerable thought over the past few weeks, asking myself what organizations I feel connected to and questioning my friends and family about their institutional relationships. Let me start by saying that I’ve never been a joiner. I did not join a fraternity in college, despite the wild resurgence in the Greek system thanks to the release of the movie “Animal House” in my sophomore year (“Toga, toga, toga”). Instead, I associated with a group of dedicated iconoclasts. Of course, we gave ourselves a name (which we’ll keep on a “need-to-know” basis), but that was only so that we could compete in intramural athletics. And let me tell you, those iconoclasts made for a pretty darn good basketball team. I still am not a joiner. I frequently tell myself that I’m just too busy to join in; that my business travel schedule entitles me to little time to myself; that I don’t have the skills needed to make a beneficial contribution. You’ve heard all these lame excuses before (and maybe even used them yourself). So instead of swinging a hammer or stocking food pantry shelves, I attempt to cover up this flaw in my character by making financial contributions. A tour of my wallet… But no man is an island. What are the organizations inspire affinity in me? A good place to start would be taking a tour of the “membership” cards in my wallet and giving each organization an “affinity rating” of 0-10:
- American Express – They tell me I’m a “member,” but I sure don’t feel like one. I “belong” to Amex and keep the card in my wallet purely as a back-up to my primary credit card (a VISA – which I use because I get frequent flyer miles). Affinity rating: 0
- AAA – All it takes is one flat tire or dead battery to remind me that this is one card I really wouldn’t leave home without. But while I value my membership, my affinity is not strong enough to make me purchase their auto, home, or life insurance. I only care that they show up when my car breaks down. Affinity rating: 2
- AARP – I joined because I admired the fact that they invited me to when I turned 50. I remained a member for four years because I felt I could learn something (and share it with Alliance members) about how they marketed their endorsed products and services – as well as their public policy messages. I dropped membership because I was offended by their threatening ads on the budget debate. I rejoined when I discovered that the $16 membership fee could save me nearly $1,000 on a home security system. I don’t feel a real affinity for the group – perhaps because I’m not retired or don’t really need the Medicare Supplement insurance plan. But the economic benefits of membership are too valuable not to join. Affinity rating: 3
- Fraternals – I don’t have membership cards from either of the fraternals of which I’m a member. I’ve not attended any meetings or participated in any community service activities of either society. With my schedule, the chances of me joining in anytime soon are slim. I take comfort in two things about my affinity with these organizations: 1) a significant share of the profits go to help those less fortunate than me; and 2) the return on my annuity is outperforming almost every other asset in my investment portfolio. Affinity rating: 4
- Financial Advisors – Again, no membership cards for these two advisors – one for auto, home, and liability; the other for asset management and life insurance. But the personal relationship we have with each determines the affinity we feel for the organizations they represent. We overhauled our entire financial plan five years ago – before I joined the Alliance or knew about fraternals. Our advisor recommended a life insurer and annuity provider based on factors including financial strength, competitive pricing, and stability. Good corporate citizenship was a non-existent priority for me at that time. The story may have ended differently had we known that the “fraternal alternative” existed. My affinity with those companies is less than zero. However, my “relationship rating” of the financial professionals with whom we work is 10.