Advisors must redefine their value propositions

By Susan Yellin | July 11 2018 07:00AM

Michael Rogers, Jim Brownlee and Jim Burton | Photo: PhotoVisions

Today’s life and health insurance advisors need to rewrite their value propositions, embrace technology and learn to specialize if they want to take advantage of opportunities and growth in the insurance industry, Canada Sales Congress attendees were told.

Jim Brownlee, vice president, affiliated partnerships, MGAs, Canada Life, told about 1,200 people at the conference held May 23 in Toronto that life insurance advisors need to update how they define their roles if they hope to thrive in the near future.

Brownlee used the analogy of the changing definitions of a traditional travel agent and a tour guide as an example. A few decades ago, he explained, travellers would put their trust in travel agents in planning a great holiday and only had to tell the agent approximately where they wanted to go and what they wanted to do.

Changing regulations

“But the world has changed,” said Brownlee. “I don’t know that being a travel agent any longer in our business is sufficient. I think we need to all think of ourselves today as tour guides. To be a tour guide one really needs to understand where we are sending somebody on a trip. We in fact probably need to be there to lead them along and guide them along their journey to make that journey even more impactful and powerful and fulfilling.”

Nowadays new disruptors like cryptocurrency and changing regulations make it even more necessary for financial advisors to be navigators for their clients, helping clarify where they’re going and how they can get there, he said.

“We need to look at evolving from that travel agent model to tour guide and certainly be a better navigator to our clients’ needs as the years evolve from here,” said Brownlee.

Advisors might also want to change the way they structure their businesses – from running their business solely on their own to being part of a team that may include an accountant and lawyer, said Michael Rogers, vice-president sales and distribution at Desjardins Insurance

Rogers said advisors don’t need to do everything for themselves these days, but should build or be part of a team, just like at law and medical firms, enabling the advisor to have a more holistic practice.

Invest in yourself

“It means you and I need to stretch,” said Jim Burton, executive chairman and CEO of PPI. “It means we need to increase our knowledge. We need to invest in ourselves and grow. I think there are multi-billion dollar opportunities for us.”

Rogers said advisors don’t need to go way out of the way to increase their business. Much growth, he suggested, can come from advisors’ existing book of business and may include constantly developing issues such as new tax changes.

“Don’t just sell your clients and forget about it,” said Rogers. “Those clients who came in 10, 15, 20 years ago have different evolving needs – they have children and grandchildren. That’s probably one of the greatest sources of growth that can happen fairly quickly.”

Burton said advisors need to be disruptive in their thinking and tactics and differentiate themselves from everyone else.

High net worth market

He suggested some advisors may want to enter the high net worth market, dealing with sophisticated uses of life insurance, such as shareholders’ agreements, or funding estate planning, estate equalization or charitable giving.

He also noted that growth opportunities are in the offing as $850 million is transferred to the baby boomer generation with an estimated $3 trillion expected to be handed down from them to the next generation.

Burton, who is chair of the Family Enterprise Xchange Foundation, said insurance advisors may also want to think about taking on advisory roles with family businesses because they currently control 60 per cent of the economy.

And when it comes to the growth in new technology, he said advisors “can make this an asset versus an enemy.”

While many people consider robo advice to be a major disruptor to the industry, Brownlee noted that robo advice has really been around in Canada in some form for the last 25 years. Brownlee pointed to discretionary investing as a form of robo advice because investors have been able to open an account and buy and sell on their own.

Burton also noted that PPI recently introduced its robo advice platform, PPI Valet, in conjunction with WealthBar Financial Services Inc. The goal of the platform is to provide PPI advisors with the ability to offer clients professionally managed investment portfolios with all kinds of products.

But good face-to-face advisors will always be needed, said Brownlee. “We have to be able to help navigate through all the noise. People still want to deal with somebody who can clarify for them where they’re going and where they’re headed.”

Expect more shakeups

Meanwhile, stay tuned for more shakeups in the industry, he said. Just recently, iA Financial Group announced it had acquired PPI and last year, Great-West Life bought Financial Horizons Group, an indication that some insurance companies may want to get back into distribution.

Rogers said the industry seems to be taking a page from high-tech companies on how to provide distribution in the future. Not long ago, for example, Apple decided to invest in some brick-and-mortar stores, on top of the internet where it was very popular, he said. This way, said Rogers, clients who want the store experience will be able to get it and not have to wait until the product is delivered.

“So I think there will be consolidation but I definitely think we have to reshape how we deal with clients,” he said. “Customers want a different experience.”

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