Property and casualty insurance brokerages are acquiring wealth management and retirement planning firms so they can cross-sell additional products.
“There’s no way you can get profit if you’re not cross-selling. And this [is] basically why monoline doesn’t work anymore,” said Yan Charbonneau, president of insurance industry acquisition firm Synex Business Performance, adding that in most instances, the actual assets under management at many retirement-advisory shops aren’t worth purchasing on their own.
Cross-selling is becoming more natural at what Navacord executive chairman T. Marshall Sadd called “multiline brokers that do P&C, which covers commercial and personal home and auto, and includes the benefits and the group retirement side of the business as well.”
Group retirement and benefits clients can be moved to wealth advisors after they retire. And commercial and personal P&C clients can access retirement, wealth planning and benefits products.
“Having these folks housed in the same space [means] those conversations happen, and those opportunities will present themselves more often than if it happens only by referral,” Sadd said. “You do get revenue synergies by putting these businesses together.”
Navacord acquired Winnipeg-based wealth management firm ONYX Financial Group in August.
For more information, check out How acquisitions help P&C brokers boost cross-selling options
in our sister publication, Canadian Underwriter.