Advisors seek the right combination of technology and support specialists to create strong financial plans for their clients
While insurance advisors embrace financial planning, they said their firms are not providing enough support.
insurance advisors continue to embrace the shift toward providing holistic financial advice. However, many advisors surveyed for this year’s Insurance Advisors’ Report Card said their firms have much work to do to support advisors’ efforts in financial planning, which is becoming an increasingly important part of serving their clients.
Among the advisors surveyed, 69.3% create financial plans for clients — and advisors gave the “support for developing a financial plan for clients” category an overall average importance rating of 8.9. In contrast, advisors gave their firms an overall average performance rating of 7.2 in the category. That’s down significantly from 7.9 last year and represents the largest year-over-year drop in the survey. As well, the difference between this year’s overall average ratings represents the largest “satisfaction gap” in the survey.
The significant drop i n the overall average performance rating reflects the fact that the category’s rating for three firms — London, Ont.-based Freedom 55 Financial, Winnipeg-based Great-West Life Assurance Co. (GWL) and Woodbridge, Ont.based Hub Financial Inc. — declined by half a point or more.
Freedom 55 (which saw its rating in the category drop to 6.3, down from 7.9 last year) and GWL (its rating dropped to 6.2 from 7.1 year-over-year) are sister firms. Advisors with both firms cited the lack of support from specialists for financial planning as the biggest cause for concern.
In the case of GWL, advisors generally were on board with the available NaviPlan financial planning software offered to them at a reduced price, but they pointed to a lack of support in terms of personnel and training to use the tool.
“[GWL] gives us NaviPlan, but they don’t have anybody that knows how to use it,” says a GWL advisor on the Prairies.
In addition, several advisors mentioned their dissatisfaction that their go-to contact for financial planning support had been let go as part of a recent restructuring at GWL.
“[The firm] fired the person that was giving me a lot of help,” says a GWL advisor in Atlantic Canada.
Mark Foris, vice president of GWL parent firm’s new Wealth and Insurance Solutions Enterprise (WISE) network, acknowledges that some “tough decisions” were made that may mean that advisors may have to deal with a different person than they did a few months ago — but he’s adamant that the support is still there.
“If anything, we’ve enhanced the offering,” says Foris, explaining that under the WISE network, advisors will have access to a support network consolidated from sister firm Canada Life Assurance Co.’s wholesaling, product sales and marketing departments, as well as to tax planning and wealth planning consultants.
Foris recognizes the growing importance of financial planning to advisors: “It all ties into the overall compliance and regulatory requirements of an advisor to make sure that, ultimately, we’re able to show a financial planning thought process to the clients we’re serving.”
Advisors with GWL’s sister firm, Freedom 55, understand Foris’ position full well: 97.8% of those surveyed said they create financial plans for their clients — the highest in the insurance channel by a significant margin. However, Freedom 55 advisors lamented that the financial planning support they receive is provided by telephone.
“Every situation is different,” says a Freedom 55 advisor i n Ontario. “We don’t have somebody reviewing our plans with us in person so we can learn from them.We can only call head office.”
Some advisors with that dedicated sales agency believe their firm’s focus on financial planning isn’t where it needs to be. “[The financial planning support] is a work i n progress,” says a Freedom 55 advisor in British Columbia. “The firm was too product-focused in the past, so it’s trying to be more financial planning-focused now — but it’s not there yet.”
Meanwhile, advisors with Hub, who gave the managing general agency’s (MGA) support for financial planning a performance rating of 7.5, down from 8.1 last year, cited growing dissatisfaction that their firm offers only discounts on software rather than providing a reliable software platform.
Advisors with Mississauga, Ont.-based RBC Life Insurance Co. gave their dedicated sales agency the same performance rating of 7.5 for financial planning support. Both agents and the firm are focusing more on the practice.
This year, 56.8% of RBC Life advisors surveyed said they create financial plans for their clients, up significantly from just 38.3% last year. Some advisors welcomed the fact the firm now offers access to NaviPlan.
“[Support] is getting better,” says an RBC Life advisor in Ontario. “[The firm] is just beginning to roll out the tools I’ve been fighting for for the past two years. There’s never been a focus on building wealth on the insurance side here, but I’ve been picking at that bone for the past few years.”
Although RBC Life neither encourages nor discourages advisors to take on the role of financial planner for their clients, says Mike Hamilton, senior vice president, sales and distribution, advisors who take the initiative to earn the certified financial planner (CFP) designation are very welcome to specialize and build their businesses in such a way that they offer comprehensive financial plans to their clients. As well, the firm encourages advisors who don’t hold a CFP to take advantage of RBC Life’s relationship with RBC Dominion Securities Inc. and consult with the latter firm’s tax and estate planning experts.
“We’re experts on the insurance side, and to do that full financial plan is very difficult,” says Hamilton. “It’s better to bring in those who are skilled and trained at that and to have a partnership model, as opposed to being a one-stop shop.”
In contrast, advisors with Waterloo, Ont.-based Sun Life Financial (Canada) Inc. gave their firm a survey-high rating of 8.6 in the category. Many advisors said they are encouraged to focus on financial planning — and they receive all the necessary support to do so.
“We have specific software for everything from financial to tax planning. And I have support and people I can go to for assistance,” says a Sun Life advisor in Ontario.
Adds a colleague in the same province: “The [firm is] really keen on [financial planning and] makes things easier for me [to] crunch the numbers for my clients.”
“The firm is just beginning to roll out the tools I’ve been fighting for”