Most in­surance agen­cies were rated much lower in a bevy of cat­e­gories this year. Ad­vi­sors want firms to step up their ef­forts

Investment Executive - - FRONT PAGE - BY FIONA COLLIE

Most in­surance agen­cies re­ceived lower rat­ings in sev­eral cat­e­gories this year.

the re­sults of this year’s In­surance Ad­vi­sors’ Re­port Card are in and the mes­sage from in­surance ad­vi­sors is clear: in­surance agen­cies need to do more to sup­port their ad­vi­sors.

The main rat­ings ta­ble for this year’s Re­port Card (see page 12) is over­whelm­ingly red: more than 60 cat­e­gories de­clined by half a point or more com­pared with 2016. In fact, with the ex­cep­tion of Water­loo, Ont.-based Sun Life Fi­nan­cial (Canada) Inc., ad­vi­sors with ev­ery in­surance agency in the sur­vey rated their firm lower by this mar­gin in at least one cat­e­gory — if not in many more.

Ad­vi­sors have sev­eral is­sues on their minds this year: from prob­lems with their con­tact­man­age­ment sys­tem (CMS) to their lim­ited ac­cess (at times) to wealth-man­age­ment ex­perts, in­clud­ing fi­nan­cial plan­ning spe­cial­ists. More gen­er­ally, ad­vi­sors sim­ply are look­ing to their firms to help build their busi­nesses.

“Ob­vi­ously, we serve our cus­tomers; we run our own busi­nesses. [But] we look to [the firm] for cer­tain things to make our job eas­ier,” says an ad­vi­sor on the Prairies with Win­nipeg-based Great-West Life As­sur­ance Co.’ s (GWL) Gold Key dis­tri­bu­tion network.

Three firms, in par­tic­u­lar — Kitch­ener, Ont.-based Fi­nan­cial Hori­zons Inc., London, Ont.based Free­dom 55 Fi­nan­cial and Wood­bridge, Ont.-based Hub Fi­nan­cial Inc. — gar­nered rat­ings that dropped by half a point or more vs last year’s sur­vey in var­i­ous cat­e­gories in this year’s Re­port Card, as well as in their IE rat­ings, which are the av­er­age of all the rat­ings the firms re­ceived. (Many of Cal­gary-based PPI So­lu­tions Inc.’ s rat­ings dropped by a sim­i­lar mar­gin, al­though the manag­ing gen­eral agency’s [MGA] IE rat­ing dropped by 0.4 of a point.)

Ad­vi­sors at these firms took is­sue with sev­eral el­e­ments per­ti­nent to their firms: from the back of­fice to wealth-man­age­ment sup­port, from their firm’s strate­gic fo­cus to the mar­ket­ing sup­port. Specif­i­cally, Fi­nan­cial Hori­zons saw its rat­ings drop by half a point or more in 16 of the 25 cat­e­gories in which it re­ceived a rat­ing, in­clud­ing “firm’s/MGA’s strate­gic fo­cus” and “firm’s/MGA’s mar­ket­ing sup­port for ad­vi­sor’s prac­tice.” (See story on page 13.)

Some of the un­cer­tainty that Fi­nan­cial Hori­zons ad­vi­sors feel, par­tic­u­larly con­cern­ing the MGA’s strate­gic fo­cus, may have to do with the tim­ing of when the re­search for this year’s Re­port Card was con­ducted: in May, GWL’s par­ent, Win­nipeg-based Great-West Lifeco Inc., an­nounced that it had ac­quired Fi­nan­cial Hori­zons. At that time, In­vest­ment Ex­ec­u­tive was in the process of con­duct­ing sur­veys for the Re­port Card. As a re­sult, many Fi­nan­cial Hori­zons ad­vi­sors men­tioned that they were un­sure about what the fu­ture held for them­selves and their MGA.

“We just got bought out, but they didn’t tell us. No­body knew,” says a Fi­nan­cial Hori­zons ad­vi­sor in Que­bec. “We found out the day of [the deal. Fi­nan­cial Hori­zons] must have a good [strat­egy], but we don’t know it.”

How­ever, sub­se­quent to the an­nounce­ment of the deal, John Hamil­ton, pres­i­dent and CEO of Fi­nan­cial Hori­zons, has spent a lot of time talk­ing with that MGA’s ad­vi­sor sales force to as­sure them that ev­ery­thing will be busi­ness as usual for the firm.

Another cat­e­gory in which ad­vi­sors with Fi­nan­cial Hori­zons ad­vi­sors and other firms raised con­cerns was in the “firm’s sup­port for de­vel­op­ing a fi­nan­cial plan for clients” cat­e­gory. In fact, the cat­e­gory had the largest drop in the year-over-year over­all av­er­age per­for­mance rat­ing of any cat­e­gory, to 7.2 from 7.9 in 2016.

Fur­ther­more, when com­pared with the over­all av­er­age im­por­tance rat­ing of 8.9 for the cat­e­gory, this rep­re­sents the largest “sat­is­fac­tion gap” in the sur­vey at 1.7 points. That dif­fer­ence be­tween a cat­e­gory’s over­all per­for­mance and im­por­tance rat­ings re­veals that ad­vi­sors’ ex­pec­ta­tions are far from be­ing met.

Free­dom 55 ad­vi­sors were par­tic­u­larly dis­pleased with the fi- nan­cial plan­ning sup­port avail­able to them, say­ing that ex­perts aren’t avail­able for face-to-face dis­cus­sions.

“I’ve been ad­vo­cat­ing for a spe­cial­ist for years,” says a Free­dom 55 ad­vi­sor in On­tario. “We don’t have the same kind of sup­port we had years ago. Now, they just give us a 1-800 num­ber.” (See story on page 16.)

Tech­nol­ogy plat­forms also were a thorn in the sides of many ad­vi­sors. Case in point: ad­vi­sors with Free­dom 55, Mis­sis­sauga, Ont.-based RBC Life In­surance Co. and Cal­gary-based PPI So­lu­tions Inc. rated their firms lower by half a point or more in the “ad­e­quacy of your firm’s/MGA’s con­tact-man­age­ment sys­tem” cat­e­gory be­cause the ad­vi­sors con­sid­ered their CMS plat­form to be an­ti­quated and cum­ber­some.

“There are way too many sys­tems, and it would be nice if they were all amal­ga­mated into one in­stead of hav­ing to en­ter in­for­ma­tion into many sys­tems,” says an RBC Life ad­vi­sor in Bri­tish Columbia.

Another on­go­ing con­cern for ad­vi­sors is their back-of­fice sup­port, par­tic­u­larly as it per­tains to sup­port for new busi­ness. The stand­out is­sue for ad­vi­sors, many of whom gave their firms a lower rat­ing in the “back of­fice and ad­min­is­tra­tive sup­port for new busi- ness (ap­pli­ca­tion pro­cess­ing)” cat­e­gory, is the slug­gish turn­around times for pro­cess­ing ap­pli­ca­tions. (See story on page 18.)

“[The back of­fice] is very slow. It’s ter­ri­ble,” says a GWL ad­vi­sor in At­lantic Canada. “The sys­tem has got­ten bet­ter, but there’s a ton of de­lays in the un­der­writ­ing process.”

These con­cerns and low rat­ings all point to an ad­vi­sor force that saw sig­nif­i­cant room for im­prove­ment at their firms. How­ever, even the gloomi­est ad­vi­sor still gave credit where credit is due.

For ex­am­ple, ad­vi­sors rated their firms highly in the “free­dom to make ob­jec­tive prod­uct choices for clients,” re­sult­ing in an over­all av­er­age per­for­mance rat­ing of 9.3. Sur­vey par­tic­i­pants praised firms that have deep prod­uct shelves and al­low ad­vi­sors to se­lect what they feel is best for their clients. (See story on page 16.)

“From a prod­uct point of view, [the firm] lets you do what you think you should do for the client,” says an ad­vi­sor in At­lantic Canada with Mis­sis­sauga-based IDC World­source In­surance Network Inc.

Another pos­i­tive note in this year’s Re­port Card is that the in­vest­ment com­po­nents in ad­vi­sors’ books of busi­ness ap­pear to be grow­ing: av­er­age as­sets un­der man­age­ment rose to $33.9 mil­lion from $18.4 mil­lion yearover-year. In part, this could be be­cause this year’s sur­vey par­tic­i­pants were an older crowd: the av­er­age ad­vi­sor in this year’s Re­port Card was 51.8 years of age com­pared with 49.4 last year.

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