The results of the 2019 Insurance Advisors’ Report Card indicate most agencies are offering consistent support when it comes to insurance planning. However, advisor satisfaction varies regarding other aspects of wealth planning.
The performance average for the category “support for insurance planning” ticked up to 8.8 from 8.7 a year ago, and there was no real satisfaction gap (the amount by which the importance of a category exceeds its performance), though the category’s importance was rated 0.2 lower this year, at 8.9. Only three out of eight agencies saw significant ratings changes (of 0.5 or more).
Waterloo, Ont.-based Sun Life Financial Distributors (Canada) Inc. and Mississauga, Ont.-based IDC Worldsource Insurance Network Inc. (IDC WIN) saw the largest year-over-year rating improvements for the insurance planning category, to 8.9 from 8.3 and to 9.5 from 9.0, respectively. IDC WIN received the highest rating in the category across all agencies surveyed in this year’s Report Card.
Advisors from both agencies attributed their satisfaction to high-quality insurance planning software.
“The majority of our software is geared [toward] the insurance planning side of our business,” says a Sun Life advisor in the Prairies.
“It’s up to the advisor to utilize them, but we have really good tools,” says a Sun Life advisor in Alberta.
For its part, IDC WIN recently introduced new planning software which, according to an advisor in Ontario, “helps [advisors] understand more in-depth information.”
The insurance planning rating for Woodbridge, Ont.-based Hub Financial Inc. dropped to 8.3 from 8.8 in 2018. That’s still a relatively high rating, but was the second-lowest across all firms for the category. Hub also was the only agency to see a year-over-year dip in the category.
One of Hub’s advisors in Ontario found the support provided by insurance carriers directly to be more readily available than Hub’s, noting a lack of communication from the agency: “Contact is crucial. If you don’t have contact, a lot of that information gets lost,” the advisor says.
Other Hub advisors were upbeat, saying they had received one-on-one help with client cases and training.
Other holistic planning categories, such as “support for developing a financial plan for clients” and “support for developing an investment plan for clients,” sat lower on the performance scale. Based on the four firms rated in each, they garnered averages of 7.5 and 7.9, respectively, compared to 7.7 for both categories a year ago. As for importance, the 2019 ratings were 9.0 and 8.9, respectively, and 0.2 and 0.4 higher than in 2018.
While insurance is the main focus for advisors surveyed in this Report Card, more than 50% said they were mutual fund-licensed. Out of the respondents who answered the query about financial planning, 76.7% said they created such plans.
But there’s room for improvement in support: even while the financial planning and investment planning categories missed making the top 10 list of the categories deemed most important to this year’s respondents, they were among those with the largest satisfaction gaps.
The overall average investment book value was $41.9 million in this year’s Report Card. The majority of advisors at Sun Life and London, Ont.-based Freedom 55 Financial said they conducted at least part of their business through investments, as did respondents who work through Winnipeg-based Great-West Life Assurance Co.’s (GWL) Wealth and Insurance Solutions Enterprise (WISE) network. But, as the ratings data showed, many saw weaknesses in the support they received amid the industry’s shift toward holistic wealth planning.
Advisors at Freedom 55 attributed those limitations to a lack of freedom, even while the agency received a stable year-over-year rating of 8.5 in the insurance planning category.
“[Insurance planning] is one area we are really good at. Obviously it’s very important to us and our business,” says a Freedom 55 advisor in Ontario.
Outside of that, however, another Freedom 55 advisor in Ontario says, “There definitely is a push for proprietary products. I don’t get investment support unless I’m selling proprietary.”
The agency’s financial planning rating fell to 7.0 from 7.5 in 2018, although it remained at 7.6 for investment planning. Abbie MacMillan, vice president of Freedom 55, says the firm’s advisors use “a broad range of insurance and investment solutions,” and that product sales support “spanning the breadth of all products on our shelf is a core element of KYP requirements and our value proposition for our advisors.”
She adds that Freedom 55 advisors can use Constellation, a tool that manages portfolios and focuses on goal-based investing, as well as a support program to help advisors seeking the certified financial planner designation.
A Freedom 55 advisor in Ontario was optimistic about that support: “[Financial planning] is more the focus now; I want to get my numbers up. Freedom’s support is getting better,” they say.
The average performance rating from advisors in the WISE network indicated a decrease in the quality of support for financial planning (to 5.5 from 6.2 in 2018), despite there being an increase in performance for support for investment planning (to 7.6 from 7.0 a year ago). Many advisors said they don’t use the financial planning software provided because they find it “onerous” and not “user-friendly.”
“They have never engaged us on that level of doing business,” says a WISE network advisor in Ontario.
Despite this criticism, Mark Foris, vice president of GWL’s WISE network, says a financial planning program is available if the advisor “decides it makes sense” for them. In terms of investments, GWL’s WISE advisors can also use Constellation. (GWL and Freedom 55 are both owned by Winnipeg-based Canada Life Assurance Co.; so is Kitchener, Ont.-based Financial Horizons Inc.)
An advisor in Alberta with the WISE network expressed excitement about an upcoming seminar focusing on the new goal-based investing tool. And a WISE network advisor in the Prairies says, “The newly released Constellation [is] amazing. The facility has so much more information.”
Most of the managing general agency (MGA) executives say they, too, have taken strides to move into the wealth-management space. However, due to insufficient responses from their advisors, nearly all of the wealth planning category results for the agencies were incalculable.
Phil Marsillo, president of IDC WIN — the only MGA with calculable data in any of the wealth planning categories — says his firm has invested in holistic planning by hiring individuals to focus on and grow the wealth business. IDC received the highest financial planning (9.3) and investment planning (9.0) ratings across the four agencies with results in those categories.
“They got us involved with Razor, which has simplified the process,” says an IDC WIN advisor in Atlantic Canada.
Jim Virtue, president and COO of Toronto-based PPI Management Inc., says that, in years to come, successful advisors will be involved in more holistic planning. “In addition to advisor tools that really support the sale of insurance, we’ve recently added some products and services on the planning side,” says Virtue.
Financial Horizons is also taking steps to provide total wealth management. “It’s imperative for our advisors to become better planners and more holistic planners,” says David Stewart, executive vice president and COO. “We are looking at what kind of planning platforms we need for our advisors.”
On the other hand, Terri Botosan, president of Hub, says Hub advisors vary in their specialties. As a result, she doesn’t think holistic planning support is necessary for everyone in their roster. “If I think of [insurance] advisors that do business with Hub, it’s a really short list of people that would really excel in both spaces,” says Botosan.