When it comes to the qualities firms are looking for in an insurance advisor, traits such as entrepreneurial spirit and an outgoing personality appear to outweigh professional qualifications, according to the results of Investment Executive’s 2007 Insurance Advisors’ Report Card.
In fact, IE research shows that barely one in three of the 300 advisors surveyed has any designation at all. Despite the push toward holistic financial planning, only one-quarter of them are certified financial planners and a mere 19% are chartered life underwriters.
The overwhelming message: designations are not a prerequisite for the industry, nor do they guarantee success.
Taylor Train, chief operating officer of the CLU Institute and vice president of marketing at Advocis in Toronto, isn’t surprised. For a long time, he says, “The environment didn’t demand designations.”
But now the market is more sophisticated and consumers’ needs are increasingly complex. Without designations, advisors entering the marketplace “will be ill-equipped for it,” Train says.
But some firms are trying to change that. Waterloo, Ont.-based Sun Life Financial (Canada) Inc. and Guelph, Ont.-based the Co-operators Group Ltd. require new agents to work toward their CFP or CLU designations, and will reimburse the cost of courses. London, Ont.-based Freedom 55 Financial and Winnipeg-based Great-West Life Assurance Co. both reimburse their agents upon the successful completion of courses, but do not require them for new advisors.
Freedom 55 and Great-West Life lead the pack among the firms with dedicated sales forces in terms of designations, with 56% and 41% of their sales forces, respectively, having at least one. Sun Life rounds out the top three, with 43% of its agents having at least one designation. Co-operators trails the group, with only 31% of its agents having a designation, despite designations being required for new hires.
While the insurance industry may not place a high priority on designations, that’s not to say that it does not appreciate continuing education. Both firms with dedicated sales forces and the managing general agents try to distinguish themselves from their competitors by providing opportunities to accumulate continuing education credits, qualify for seminars and talk to wholesalers.
Such is the case at Aurora, Ont.-based State Farm Insurance Cos. , even if designations are not one of its educational priorities. According to public affairs supervisor Peter Karageorgos, the firm “does everything” for its agents. That applies to product and office support, back office, mutual funds and, absolutely, education. State Farm believes that it is equipping its agents to succeed with the training program it provides. Not surprising, few of its advisors have designations of any kind.
The lack of professional designations may be reflected in State Farm’s advi-sors’ service offering.
“We are dealing with poor people,” says a State Farm agent in Ontario. “The high net-worth client is not on our radar.”
As with Co-operators, property and casualty insurance is the bulk of State Farm’s business. As such, the latter’s advisors feel that the planning-centric CFP or the life insurance-focused CLU are overkill for their market. But these designations cater perfectly to the business that a Freedom 55, Sun Life or Great-West Life agent does on a regular basis. Train agrees, and Advocis recognizes the need for a designation suitable for the middle market.
The stance on designations is just as varied among the MGAs. Richard Williams, president of Toronto-based World Financial Group Inc. , says the firm “supports people who would like to move along in their designations” but tends to be hands-off when it comes to training advisors. Only 3% of World Financial advisors surveyed have completed any designations, all CFPs.
Toronto-based PPI Financial Group Inc. toes much the same line on the issue of designations, but with different results. According to PPI chairman and CEO Jim Burton: “It would be more important to us to have an agent or agency that commits to working in this sophisticated marketplace.”
With the highest percentage of advisors who deal through an MGA with designations (57%), it appears that designations and education are part of the dedication to which Burton alludes.
Meanwhile, Woodbridge, Ont.-based MGA Hub Financial Inc. believes in the value of designations and provides many opportunities for its agents to continue their education, says president Terri DiFlorio. Still, 60% of advi-sors dealing through Hub Financial have no designations whatsoever. IE
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