In one step, one of the largest independent managing general agencies in Canada has made a deep impression on the Ontario insurance distribution market.

Calgary-based Financial Management Brokerage Inc. completed a deal in November to acquire Simon L. Jackson Insurance Broker Ltd. , a large MGA based in Toronto.

“The addition of Simon Jackson gives us a broader national presence,” says Jim Virtue, Financial Management’s president and CEO, “and allows us to expand our opportunities to those areas that require offices across the country.”

The terms of the deal weren’t disclosed, but Simon Jack-son, who built the firm over a period of more than 25 years, will stay on as a senior manager, as will Jackson’s equity partner, Stephen Tung, who had joined Jackson over the course of the decade. Fourteen owners across the country have equity in the firm.

“We’ll work with Simon and Stephen to continue to expand our business in the Ontario market,” Virtue says. “One of our main business philosophies is that we believe in having equity owners in charge of the day-to-day operations in each of our offices.”

Financial Management now has a national profile with full-service offices in Vancouver, Edmonton, Toronto, Halifax and St. John’s, plus marketing offices in Victoria and Kelowna, B.C. One way of measuring a firm’s advisor base is by the number of reps that have done business with the firm in the past year. By that definition, about 1,500 advisors are with Financial Management presently.

How was the deal done? Virtue says several members of both companies have had relationships going back a few years. Once they began to talk formally, the transaction was completed quickly. One thing that made the marriage easy was that both firms have broad-based brokerage practices with no one dominant carrier, says Virtue.

This sort of growth is important in a changing industry. “I see the whole MGA distribution channel changing, as the insurance companies are looking for larger, more technologically sophisticated MGAs to work with,” Virtue says. “We need to have more scale to afford the systems necessary to work with the companies. I think we’re well suited to meet this challenge.”

Simon Jackson Insurance is the most recent of five mergers and acquisitions involving Financial Management in the past four years. In joining Financial Management, Simon Jackson Insurance becomes part of the Bridgeforce Financial Group, a national group of MGAs that includes Financial Management; WCS Financial Services Inc., with Ontario offices in Toronto, Richmond Hill, London and Grand River; Faiella Financial Group and Insurance Agency Ltd. in Sudbury, Ont.; Paradigm Financial Advisors, with offices in London and Chatham, Ont.; and Life Management Financial Group, with offices in Thornhill, Ont., and Toronto.

The group works together to provide software, back-office technology, training and other common elements. “Simon Jackson’s entry will increase the ability of our group of companies to compete in situations in which a national presence is required,” says Virtue.

To help advisors make the transition from Simon Jackson Insurance to Financial Management, the merged firm will maintain strong local service, says Virtue. This includes underwriting assistance, marketing assistance and business development.

“All of our offices provide brokers with assigned individuals that assist them with policy issues and policy-owner service,” he says. “We believe that these functions should be performed.”

It also helps that Simon Jackson Insurance’s service staff is staying put and, just as important, Virtue says, that Jackson and Tung will continue managing the local office as equity owners.

All new advisors will gain immediate access to Financial Management’s primary market technology, a Web-enabled illustration system. WEIS software allows brokers to run, print and save insurance illustrations without the additional work of having to install the software on their computers and keep it current.

“We are currently working on providing electronic segregated-fund training to the brokers, which is expected to be implemented in the spring of 2008,” Virtue adds. Similar to mutual fund trading platforms, this improves on the manual trading platform that most small MGAs provide.

Together, the Bridgeforce group recently chose Winfund Software Corp.’s W. Insurance back-office software, the platform that gives advisors access to policy underwriting status. It is designed to automate some of the day-to-day contract management for advi-sors, hooking them up with the insurance carriers doing the underwriting, along with third-party paramedical firms. “It provides us with the capability to deliver prompt, efficient and timely service,” says Virtue.

@page_break@As another Bridgeforce co-development, Financial Management is aiming to launch an advisor Web site by the middle of 2008 and hopes to make it the premier Web site in the industry.

Advisor training and education are a big part of Financial Management’s strategy. The Calgary office, for example, offered educational seminars and more than 150 CE credits in 2007. Similar services are available in all the branches.

Several offices offer sales training and coaching — the types of services the firm wants to develop and increase in 2008.

Increased regulation is among the top three challenges that the firm sees on the horizon: “Specifically, the way it relates to the sale of segregated funds,” Virtue says. “This will change the nature of this business.”

As with the rest of the financial services industry, Financial Management needs to be able to hire and develop a younger advisor base to replace an aging distribution network. “It’s the largest challenge we face,” Virtue says.

The company maintains direct MGA contracts with all major insurers: AIG Life Insurance Co. of Canada, Assumption Mutual Life Insurance Co, Canada Life Assurance Co., Manulife Financial Corp., RBC Insurance, Standard Life Assurance Co. of Canada, Royal and SunAlliance Group, Transamerica Life Canada and Wawanesa Mutual Insurance Co., among several others. IE