Toronto-based 360° Financial Services Inc., has more than tripled the size of its advisor base by picking up the managing general agency business of Austin Global Insurance Co., based in Hamilton, Ont.

Wilton Neale, the sole owner and CEO of 360°, bought the MGA from Austin’s owner, Reynolds Austin, who will stay on with the firm as a senior advisor and continue to serve some clients.

The financial details and terms of the transaction were not disclosed, but Neale says the acquisition of Austin’s firm adds about 40 active reps to his existing stable of about 15.

Neale’s firm, which has offices in Toronto and Bradford, Ont., adds an office in Hamilton as well. Its client base now extends to British Columbia and Alberta and it is licensed across all the western provinces.

Neale, 46, who started his career in retail banking more than 18 years ago, says that the market is underserved by much larger firms such as Mississauga, Ont.-based PFSL Investments Canada Ltd. , Vaughan, Ont.-based World Financial Group Inc. and other captive sales agencies.

“My model is based on the fact that the industry is shifting from one in which clients are being sold services from sales companies to one in which clients are being represented by advisors, who will source their needs on their behalf from various financial institutions,” Neale says.

The firm maintains agency contracts with Quebec-based Industrial-Alliance Insurance & Financial Services Inc. and Waterloo, Ont.-based Equitable Life Insurance Co. of Canada. It also has associate agency contracts with several more insurers including Sun Life Financial Services Inc., Transamerica Life Canada and Canada Life Assurance Co. , all of Toronto, and Moncton-based Assumption Mutual Life Insurance Co.

Neale says 360° concentrates on segregated fund sales, but it also has contracts with Mutual Fund Dealers Association of Canada– and Investment Dealers Association of Canada-licensed firms for fund sales and principal-protected notes. These types of products provide “higher ground” for older investors who are worried about their retirement income, but who are also accustomed to seeing their investments grow at rates higher than guaranteed investment certificates rates, he adds. “How do you get that at the same time?” says Neale. “Enter principal-protected product.”

He believes that many life insurance agents are in a better position to serve a broader range of clients’ financial planning needs than they realize. Each advisor should think of himself or herself as a branch service for clients, sourcing retail bank services, mortgage and lending products and broader estate planning services instead of simply selling a few contracts during the RRSP season. “The task at hand is to convert the advisors’ thinking from being an agent for the insurers to true representation for the clients,” says Neale.

The firm already runs a training program, which Neale plans to unfold into a broader three-tiered learning platform to teach agents the philosophy of “becoming an independent life insurance broker.”

By this coming spring, Neale expects to be running a formalized “University of 360°,” drawing from the expertise of some of the national sales representatives at the major insurance and mutual fund firms.

Neale describes his acquisition of Austin’s firm as a classic example of transition and consolidation in the insurance industry, in which advisors are aging.

“There’s a wealth transfer happening within the industry. If more opportunities come my way, I plan to exercise my options,” says Neale, who adds that he considers himself part of the active MGA mergers and acquisitions market. “But we’re also growing one representative at a time as I convince life insurance representatives of their strength in the market.”

Industry consultant NewLink Group Inc. says there is a trend of consolidation among the more than 400 managing and associate general agencies across Canada, many of which are privately held.

Some MGA owners are ready to pass on their assets to younger business owners as they move toward retirement. Insurance manufacturers are also putting some pressure on smaller agencies to meet their production targets, forcing smaller agencies to band together; and finally greater scale at the firms that have already invested in back-office staff and technology allows for greater margins.

Austin now spends most of his time golfing on his property in Barbados. He met Neale earlier this year and quickly made a deal to sell Austin Global. IE

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