Although insurance advisors value their independence greatly, they still expect their dedicated sales agencies or managing general agencies (MGAs) to provide extensive assistance.
The results of Investment Executive‘s (IE) 2015 Insurance Advisors’ Report Card show a marked contrast between firms that provide advisors with the support they need and firms that advisors find to be lagging.
One of the most striking examples of this difference is in the ratings for the “back office and administrative support for new business (support for application processing)” category. Specifically, advisors with London, Ont.-based Freedom 55 Financial and Winnipeg-based Great-West Life Assurance Co. (GWL) hit their firm particularly hard because of the difficulties associated with the launch of the New Business Now application process. (See story on page 13.)
Says a Freedom 55 advisor in Ontario: “It’s been almost a year since New Business Now rolled out and my patience is wearing thin.”
Freedom 55’s troubles with New Business Now appear to have affected the way advisors rated their firm in other categories in this year’s Report Card. The firm’s ratings dropped by half a point or more in 10 of the 35 categories that applied to Freedom 55.
For example, several advisors said the firm lost focus when rolling out the new application. As a result, Freedom 55’s rating in the “firm’s/MGA’s strategic focus” category declined to 7.6 from 8.2 year-over-year. Says another advisor in Ontario: “New Business Now was a strategic mistake.”
Even more telling, the firm’s “overall rating by advisors” dropped to 7.7 from 8.3 in 2014. (See ratings table on page 12.)
In contrast, advisors with Mississauga, Ont.-based IDC Worldsource Insurance Network Inc. (IDC WIN) rated their firm higher by half a point or more in 15 of the 31 categories that applied to the MGA, including its back-office support for new business and “technology tools and advisor desktop.” (IDC WIN’s IE rating, which is the average for all relevant categories, rose by half a point year-over-year, to 9.2 from 8.7.)
“At my age, I was dragged kicking and screaming into the technology age, and they make it so easy. It’s a godsend,” says an IDC WIN advisor in Ontario.
On the whole, although technology is important to advisors, many noted this year that their firms’ contact management systems and desktop tools were outdated or cumbersome.
“It’s not very good,” says a GWL advisor in Ontario of the firm’s tech platform. “It’s difficult to use and find things.” (See page 13.)
But ease in using technology is not the only thing that advisors are looking for. Many advisors who were surveyed said they appreciate having more support from helpful branch managers, sales directors or regional sales managers.
Specifically, advisors were full of praise for managers who understand the industry as well as advisors’ business needs.
“[The branch manager’s] tech expertise and human skills make her such a strong manager,” says an advisor in Quebec with Toronto-based PPI Advisory.
In fact, there’s an expectation at this MGA that managers need to understand an independent agent’s business and how it fits within the larger PPI Advisory team, says Jim Burton, the firm’s chairman and CEO.
That mentoring may be paying off for many advisors: the average book of business rose for the second year in a row, to $25 million from $21.1 million in 2014. Advisors also reported more sales in both mutual funds and segregated funds in 2015. (See page 1.)
The products that advisors can access were critical to survey participants. (See page 16.) For example, advisors gave the “freedom to make objective product choices for clients” category the second-highest overall average importance rating in the Report Card, at 9.6, because they value the ability to grow their business and serve clients as they see fit.
Says an advisor in Atlantic Canada with Calgary-based PPI Solutions Inc.: “The freedom I have is the reason why I still have new clients.”
But it’s not only freedom to make objective product choices that matters greatly to advisors. As in years past, advisors said their “firm’s/MGA’s ethics” and “firm’s/MGA’s stability” also mattered greatly to them, rating the categories at 9.7 and 9.5 in overall average importance, respectively.
Insurers and MGAs are delivering ethical environments, as advisors gave their firms an average performance rating of 9.4, the highest ranking in this year’s Report Card. Advisors praised the strong compliance culture they see at their firms and MGAs; compliance departments are ready to investigate issues or answer advisors’ queries when required.
“We’ve never had any compliance issues,” says an advisor in Atlantic Canada with Kitchener, Ont.-based Financial Horizons Inc. “And if I have a question or concern, it’s just a matter of contacting [the MGA].”
The results for all the categories in this year’s Report Card were obtained by IE research journalists Joy Blenman, Kelsey Rolfe and Anne-Marie Vettorel, who surveyed 346 advisors with three dedicated sales agencies and six independent agencies. (Five in the latter group are MGAs.) Participating advisors must either be a full-time advisor with one of the dedicated sales agencies in the survey or run a minimum of half of their business through one of the MGAs.
Advisors were asked to rate their firms’ or MGAs’ performance in a given category, as well as how important that category is to their business. Both ratings were based on a scale of zero to 10, with zero meaning “poor” or “unimportant” and 10 meaning “excellent” or “critically important.”
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