The insurance firms included in this year’s Insurance Advisors’ Report Card were quick to rebound after last year’s disappointing results, with individual firms seeing improvements in their performance ratings in a number of categories.
Toronto-based PPI Advisory and Mississauga, Ont.-based IDC Worldsource Insurance Network Inc. (IDC WIN) had the strongest performance ratings once again. Both managing general agencies (MGAs) saw high ratings in key categories such as “technology tools and advisor desktop,” “back office and administrative support for new business: support for application processing” and “firm’s/MGA’s strategic focus.”
“The principals at the firm understand how hard it is to develop a career in this business,” says an IDC WIN advisor in Ontario, “and they really listen to what advisors have to say.”
Adds a PPI Advisory advisor in Alberta: “The firm is our greatest support as far as being industry watchdogs. They provide us with all the knowledge we need on legislation changes and product updates.”
Although Calgary-based PPI Solutions Inc. continues to be rated very favourably, advisor satisfaction appears to be slipping. The firm saw its ratings drop by half a point or more in nine categories rated by advisors, as well as in the overall rating by advisors, which dropped to 9.1 from 9.6 last year. PPI Solutions advisors spoke of a lack of communication with head office and a culture that seems to be shifting.
“They need to improve the culture at the firm,” says a PPI Solutions advisor in Alberta. “In the past, PPI Solutions thought it was important to process things as quickly as possible to help their advisors. Now, it can be three to four days of going back and forth with people not responding and, in the end, I have to contact them multiple times.”
It’s a different story at Toronto-based World Financial Group Insurance Agency of Canada Inc. (WFG). That firm saw its ratings increase in 27 of the 36 categories in which it was rated by its advisors, with 18 of those ratings increasing by half a point or more. Last year, the firm struggled; many advisors were upset over the delay of a new electronic application platform, which officially launched this summer – a year later than previously announced.
“We have really been focusing on new application platforms using iPads and more New Age processing because that’s what our sales force has been asking for,” says Richard Williams, WFG’s president. “We’re excited to be able to offer this platform now. From brochures to pre-approved marketing pieces to electronic signatures, it will be a warehouse of different tools for advisors.”
WFG also saw a major improvement in the “firm’s focus on social media” category, as it received a rating of 8.8, up dramatically from 7.0 last year. In fact, the overall average performance rating for the category as a whole rose to 7.2 from 6.4 last year, with four of the seven firms rated seeing their ratings improve by half a point or more.
“The firm has come a long way in the past year,” says an advisor in Atlantic Canada with London, Ont.-based Freedom 55 Financial. “Our marketing campaign has been 100% social media-based and the firm has given us classes on the importance of social media.” (Investment Executive [IE] explores this topic further in a web-exclusive story.)
The ratings obtained for the Report Card are based on how advisors believed their firms performed in 45 categories (plus the “overall rating by advisors”), as well as how important advisors believe each category is to their business. Both performance and importance are rated on a scale of zero to 10, with zero meaning “poor” or “unimportant” and 10 meaning “excellent” or “critically important.”
The “IE rating” is the average of a firm’s ratings in all the categories; the “overall rating by advisors” is how advisors rated their firm as a whole.
IE researchers Justin da Rosa, Tessie Sanci and Jeff Wimbush spoke with 415 advisors at three dedicated sales agencies and eight independent sales agencies (seven of which are MGAs) across Canada.
The dedicated sales agencies in the Report Card were Freedom 55, Mississauga-based RBC Life Insurance Co. and Waterloo, Ont.-based Sun Life Financial (Canada) Inc. These firms are run as traditional career agencies, in which the carrier owns and operates the advisor distribution channel. Although there are minor differences between them, these firms operate under a similar model.
In contrast, there are many differences among the independent sales agencies in the Report Card. For example, Winnipeg-based Great-West Life Assurance Co. (GWL) runs its practice under a independent/direct model. In one way, the firm’s business model is similar to that of the dedicated sales agencies, in that advisors deal with the carrier directly; however, GWL advisors still remain independent and are not committed nor obligated to sell only GWL products.
The seven remaining independent sales agencies operate as MGAs – although two of these MGAs have unique business models. For example, PPI Advisory is known for its dedication to high net-worth clients and the services surrounding this specialized niche.
Advisors who run their businesses through PPI Advisory praise that MGA year after year for its focus on support services, including access to tax lawyers, accountants, underwriters and other experts who cater to their high net-worth clients’ unique needs.
Much along the same lines, WFG is known for its focus on the middle-income market, as well as for the plethora of services it provides its advisors while still offering the freedom of an MGA.
In an effort to capture a better perspective of the growth in the MGA channel, IE added one of the largest MGAs in the country to this year’s Report Card: Kitchener, Ont.-based Financial Horizons Inc.
In addition, with the independent agencies facing greater regulatory oversight – and the MGAs striving to meet those strict regulations – IE added a new question to this year’s survey: “MGA’s support in relation to the compliance regime.”
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