There’s an ap­proach to ad­vi­sor au­ton­omy at firms, which al­lows ad­vi­sors to make prod­uct choices for clients with­out any in­ter­fer­ence

Investment Executive - - FRONT PAGE - BY CHARLES BOSSY

In­surance firms scored well in giv­ing ad­vi­sors the free­dom to choose prod­ucts.

in­surance ad­vi­sors sur­veyed for this year’s In­surance Ad­vi­sors’ Re­port Card placed great im­por­tance on hav­ing the “free­dom to make ob­jec­tive prod­uct choices for clients.” And much to ad­vi­sors’ de­light, their firms are de­liv­er­ing strongly in pro­vid­ing that free­dom.

Ad­vi­sors gave the free­dom cat­e­gory an over­all av­er­age im­por­tance rat­ing of 9.6, tied (with “firm’s/MGA’s ethics”) for the high­est such rat­ing in the Re­port Card. They also gave their firms an over­all av­er­age per­for­mance rat­ing of 9.3 in the free­dom cat­e­gory, also tied (again, with ethics) for the high­est such rat­ing in the Re­port Card. These rat­ings point to ad­vi­sors’ in­de­pen­dence and vast prod­uct shelves as rea­sons for the wide­spread sat­is­fac­tion.

Many ad­vi­sors said there’s a phi­los­o­phy of ad­vi­sor au­ton­omy at their firms, which al­lows ad­vi­sors to make prod­uct choices for clients with­out in­ter­fer­ence from man­age­ment or su­per­vi­sors.

“I get all the free­dom to give the ad­vice to the client. There’s not any ques­tion [about it]; I’m free to make the best rec­om­men­da­tion pos­si­ble,” says an ad­vi­sor in On­tario with Mis­sis­sauga, Ont.based RBC Life In­surance Co. “No­body’s telling me how I should go about it. [The choices I pro­vide] are just based on my train­ing and how to give proper guid­ance.”

“I have to­tal au­ton­omy, no pres­sure at all from my MGA [that is, the manag­ing gen­eral agency],” adds an ad­vi­sor on the Prairies with Kitch­ener, Ont.-based Fi­nan­cial Hori­zons Inc. “[That’s] one of the rea­sons I chose [to work with Fi­nan­cial Hori­zons].”

Part of the process in en­sur­ing ad­vi­sors have the free­dom to sell what­ever they deem a best fit for their clients is that firms have an abun­dance of prod­ucts avail­able from many carriers from which ad­vi­sors may choose.

“We deal with 24 carriers and we of­fer ad­vi­sors 100% free­dom of choice,” says Pa­tri­cia Ziegler, chief mar­ket­ing and cor­po­rate strat­egy of­fi­cer, with Fi­nan­cial Hori­zons. “We don’t show a bias or favouritism to­ward any com­pany.”

In­surance agen­cies across the board share that ap­proach. And ad­vi­sors were quick to of­fer praise for the firms that pro­vide a va­ri­ety of prod­ucts from which to choose.

“We’re for­tu­nate that PPI Ad­vi­sory has a wide ar­ray of prod­ucts avail­able from a wide range of carriers,” says an ad­vi­sor on the Prairies with that Toron­to­based firm.

Adds an ad­vi­sor in Bri­tish Columbia with Win­nipeg-based Great-West Life As­sur­ance Co.’ s (GWL) Gold Key dis­tri­bu­tion network: “I have ac­cess to a lot of dif­fer­ent prod­ucts — even if they’re not from [GWL].”


“The [ MGA] takes turns i n be­ing fair [in pro­mot­ing] all their providers, and they ro­tate months [in do­ing this],” says an ad­vi­sor in At­lantic Canada with Mis­sis­sauga-based IDC World­source In­surance Network Inc. (IDC WIN). “One month might be Eq­ui­table Life [In­surance Co. of Canada]; the next might be Man­ulife [Fi­nan­cial Corp.]; [IDC WIN] tries to pro­mote each com­pany fairly. But from a prod­uct point of view, they let you do what you think you should do for the client.”

“Ad­vi­sors have a lot of choice,” says Ron Madzia, pres­i­dent of IDC WIN. “From a le­gal stand­point, there’s no way we can dic­tate to them: ‘You should sell this or can’t sell that.’ We’ve never had an is­sue with an ad­vi­sor or client who has said they’ve been sold the wrong prod­uct.”

Still, some ad­vi­sors with the ded­i­cated sales agen­cies men­tioned con­cerns. Even though some of these ad­vi­sors praised their firms for grant­ing au­ton­omy to choose what fits best for their clients, they felt that their ob­jec­tiv­ity is di­min­ished some­what be­cause they have ac­cess to only their com­pany’s prod­ucts — or must of­fer their agency’s prod­ucts to clients first.

Says an ad­vi­sor in On­tario with Water­loo, Ont.-based Sun Life Fi­nan­cial (Canada) Inc.: “Be­ing ca­reer agents, we have a li­cence to sell only Sun Life prod­ucts. I can’t re­ally be ob­jec­tive. I have only one type of in­surance to re­ally of­fer clients.”

This feel­ing was par­tic­u­larly preva­lent at London-based Free­dom 55 Fi­nan­cial. Those ad­vi­sors were very crit­i­cal of their firm in the free­dom cat­e­gory and gave a rat­ing of 7.7 — sig­nif­i­cantly lower than for any other firm in the Re­port Card.


“We are al­lowed to rec­om­mend only what we have on our shelf. In many cases, we don’t of­fer sev­eral prod­ucts, such as long-term care,” says an ad­vi­sor at Free­dom 55 in On­tario. “It’s very dif­fi­cult for us to be holis­tic ad­vi­sors and have clients’ best in­ter­ests at heart.”

If Free­dom 55 ad­vi­sors want to of­fer prod­ucts the firm doesn’t pro­vide, they have to seek per­mis­sion —which, they said, can be an ar­du­ous process.

“Our con­tract says we can sell only prod­ucts that are ap­proved,” says a Free­dom 55 ad­vi­sor in On­tario. “In other words, if I have some­one who needs long-term care, travel in­surance or dif­fer­ent prod­ucts, I have to get per­mis­sion. [The firm] just makes it dif­fi­cult.

In re­sponse to ad­vi­sors’ griev­ances, Ab­bie MacMil­lan, vice pres­i­dent with Free­dom 55, de­fended the firm’s prod­uct shelf, say­ing ad­vi­sors still can be ob­jec­tive and that the firm’s in­ten­tion is to be able to meet all of clients’ in­surance needs.

“The most i mpor­tant thing that we’re try­ing to do is put the client at the cen­tre of ev­ery­thing that we do,” she says. “And we want to make sure our ad­vi­sors are in a po­si­tion to meet the needs of their clients [with] a broad range of prod­ucts.”

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