An insurance distributor’s ideal advisor: Includes chart

Derek Fee, senior public affairs specialist for State Farm Canada in Toronto, likewise, sees insurance as a world of entrepreneurs.
The majority of advisors Investment Executive surveyed work in small agencies as independent contractors. “We’re looking for someone with a real entrepreneurial spirit, someone interested in running a business and making the most of the opportunity,” says Fee.

Strong relationship-building skills is a prerequisite. “There has to be a keen interest in helping others and in living the State Farm brand,” says Fee. “[Agents] have to be dedicated to their customers.”

Although it is part of the State farm brand, it is not a sentiment exclusive to State Farm.
Clarica, too, looks for entrepreneurial drive, partnered with people skills and a passion for the insurance business. “We want someone who is a good listener, who finds this type of work interesting and who is passionate about the difference he or she can make in people’s lives,” says Garramone.

The Co-operators Group Ltd. is also on the prowl for entrepreneurial types with strong business skills. “Our ideal advisor is looking for a franchise infrastructure,” says Jim Wingrove, director of the agency department at Co-operators in Guelph, Ont. “And we want advisors who can take advantage of our system tools.”

But an advisor cannot succeed through sheer will alone. Nick Pszeniczny, senior vice president of Freedom 55 Financial in London, Ont., says his ideal advisor is able to tap into a network of specialists. “Our ideal advisor has an infrastructure that includes product specialists, tax-planning consultants, private wealth counsellors and distribution coaches,” he says.

Designations are also critical. All firms surveyed want their advisors to hold a certified financial planner, chartered life underwriter or both — and many are willing to put up the money to make that happen.
“We want our primary agents to hold a CFP or CLU, and we give assistance to those who complete them,” says Wingrove. Clarica and State Farm also reimburse advisors who earn designations.

While designations are in demand, mutual fund licences are even more sought after. “A State Farm agent must be in a position to offer customers all the products and services we offer, and that means having a mutual fund licence,” says Fee. He estimates 85% of State Farm agents are licensed to sell mutual funds. The firm’s long-term target is to see financial products comprise about one-fifth of an agent’s book of business.

Mutual funds are also a significant source of income for advisors at Great-West Life Assurance Co. and Clarica. “We don’t require a mutual fund licence, but we encourage it,” says Leander Dueck, senior vice president of individual distribution at Great-West Life in Winnipeg. “It’s important for their revenue stream.” Although the firm sets no target for book size, Dueck says, an average advisor should have an annual income of at least $105,000. He notes Great-West Life is best positioned for advisors who practise full financial planning.

At Clarica, the average advisor makes $600,000 in mutual fund sales every year, and the majority (2,850 out of 3,800) are licensed to sell mutual funds. “New advisors need to do 100 insurance sales or more,” says Garramone. “But over time, most will transition to having a bigger focus on the wealth business.”

Mutual fund licences are mandatory at Freedom 55, and no wonder: the firm’s advisors are expected to sell more investment products than insurance. “Our ideal advisor has a product mix consistent with where we are,” says Pszeniczny, who notes that advisors should have a client base of 600 and an annual income of $125,000 or more. “The mix is about 60% investments and 40% risk.”

That’s not the case at Co-operators, at which only one-third of agents have fund licences. “Some just don’t do enough volume to make it worthwhile,” says Wingrove.

@page_break@Equinox Financial Group Inc. doesn’t track the number of mutual fund licences among its ranks. However, notes general manager Daniel Dessureault, the Toronto-based firm encourages its agencies to recruit “planner-type advisors.”

Although insurers know what they’re looking for, what do advisors expect in return?
Those surveyed in this year’s Report Card told us that ethics, stability and image are a firm’s most important traits. Keeping promises and compensation round out the top five. Across the board, advisors agree that their firms are delivering on expectations: only 22 of 253 advisors surveyed wouldn’t recommend their firms to other advisors. IE