John Dargie is at a crossroads.
After four decades as an insurance broker, the recently appointed president of Mississauga, Ont.-based Independent Financial Brokers of Canada finds himself at age 71 to be in the same boat as many of his members. With a large book of business, he is on the lookout for a successor at a time when the sector is undergoing fundamental change.
That’s why recruitment and succession planning, as well as dealing with increased regulation, are at the top of Dargie’s list of priorities in his new role with the IFB. “We need to focus,” he says, “on making it more comfortable for younger brokers to enter this business.”
In fact, it’s key for established brokers to realize that the sector needs to change in order to stay healthy for the future, given the existing nature of being an independent broker — the business remains the epitome of an “eat what you sell” world, in which brokers’ income is made up entirely of commissions from the products they sell. For many younger brokers, it’s an intimidating model. “To get fresh blood,” Dargie says, “we need to start paying our young people a salary to start.”
Helping independent brokers deal with emerging issues like this is at the crux of the IFB’s mandate. The organization is already well known for providing its members with educational seminars and networking opportunities; but the 26-year-old volunteer trade association also is an advocate on sector issues, representing the interests of 4,000 independent insurance and mutual fund brokers across Canada.
At the same time, building up the younger layer of independent brokers is happening in the context of a regulatory landscape that is undergoing rapid change. That is being driven by, among other things, growing public pressure for greater oversight of virtually all sectors of the financial services industry.
For independent insurance brokers, this will mean new ways of doing business. For the past 20 years, insurance agents and managing general agencies have been regulated with a light hand. That’s partly because the sector is far from being a unified entity; not every MGA carries every insurer’s product on its product shelf, so many insurance advisors work with several MGAs to ensure that the advisors can get the best products and rates for their clients.
However, this structure makes it difficult for some MGAs to maintain a complete picture of all the MGAs an advisor is working with. As a result, the level of supervision of agents is beginning to generate questions, inside the sector and out. Indeed, the Canadian Council of Insur-ance Regulators has included this matter among the topics it has been studying since January. The CCIR’s findings and recommendations are expected to be released later this year.
Dargie, whose involvement with the IFB began in 2000, when he decided to “give back” to the sector, approaches the supervision issue with a valuable perspective — a career built during the 1990s, when the insurance sector underwent a major transition, moving from largely captive sales forces to the independent distribution model. And Dargie, for one, believes the sector’s Wild West days are numbered: “Regulators are going to end up restricting the number of MGAs an advisor can work with.”@page_break@Dargie doesn’t believe the news is all bad, however. In fact, there could be considerable upside for the industry, he says: “It means ensuring that brokers have a solid understanding of what ‘independence’ really means.”
He may have something of a battle ahead of him —most brokers think that in the future, MGA rules and restrictions on a broker’s relationships will become a threat to a broker’s independence. But Dargie doesn’t see it that way: “Independence is about recommending the best products to your clients. It will be about choosing which MGA you work with.” And Dargie, a man who fires off his opinions with considerable force, is determined to get that message across: “I will be a visible president. I will be at every summit, reminding brokers about what this organization is and what it is trying to do.”
Working in insurance was not Dargie’s first choice. Opening his own men’s clothing store was. Fresh out of teachers’ college in May of 1960, Dargie spent that summer sorting clothes in the basement of a discount store in Oakville, Ont. He soon decided retail was more intriguing than a classroom, and entered a retail-management development program. Within a few months, he was promoted to manager. He then spent 13 years opening and managing discount department stores across Canada. Along the way, he met his wife Barbara. They have two daughters and two grandsons.
Finally, the relentless moves proved too much for Dargie’s family and he opted for a more settled career. As Dargie had in retail, he excelled at sales in the insurance sector. Within three years of joining Montreal-based Standard Life Assurance Co. of Canada in Saint John, N.B., in 1973, Dargie was promoted to manager of its branch in Hamilton, Ont.
Not one to sit still, in the late 1980s, Dargie moved over to Toronto-based National Life Assurance Company of Canada, now part of Industrial Alliance Insurance and Financial Services Inc. of Quebec City. He was admitted to IA’s President’s Club in 1993.
During the early 1990s, Dargie began to notice the trend among insurers to outsource their distribution businesses to MGAs. It was time to switch gears again. He teamed up with another top producer, Sam Marino, at National Life to found Oakville-based DMR Financial Services Group Inc., a full-service MGA. Over the next 16 years, DMR grew to the point at which it was administering the contracts of 12 insurers and three fund companies, as well as 200 brokers.
In 2009, Dargie and his partner decided it was time to lighten their workload and sold DMR to Oakville-based Canada Loyal Financial Ltd.
Although Dargie still works as a broker at DMR, he has a lot more time on his hands to enjoy the simple pleasures — as well as the rewards of his labours. When he’s not spending time with his wife, relaxing over coffee and the papers, Dargie enjoys raising racing mares from a stable south of Guelph, Ont.
As for Dargie’s succession plans, he chuckles and points to his forehead: “I might be 71, but in my mind I’m still 31. Retirement isn’t any time soon.” IE