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Manulife eager to implement robo-advisors in the US

By Andrea Lubeck | August 22 2017 01:30PM

Roy Gori, Mike Doughty and Donald Guloien

Michael Doughty, interim President and Chief Executive Officer of John Hancock, and Roy Gori, President of Manulife, are “bullish” about implementing robo-advisors at John Hancock, they confirmed in a call with analysts regarding Q2 results.

To reach more households, John Hancock wants to introduce a new digital advice distribution channel. “A vast number of American households aren’t getting the advice they need. They basically never had access to it. We view the new power of digital advice as a way to actually help people improve their financial outcomes very efficiently,” Doughty explains.

Could it cannibalize traditional advice?

Asked by an analyst whether this new avenue could “cannibalize” the more traditional advisor channel, Doughty and Gori flatly ruled out this possibility. John Hancock intends to use this digital solution as a lever to steer clients toward a face-to-face meeting.

“I think the mistake that people often make is that they think there is a binary decision between digital advice or face-to-face. And the reality is that consumers don’t think about the world in that way. They, in many instances, want to be connected to an advisor and to have a face-to-face discussion or relationship. But in other instances, they want to be remote and they want to use digital platforms for their execution. So our belief is that we need to really cover the spectrum,” Gori said.

Expanding the pie

He adds that advisors realize that much of the population is beyond their reach, in both the wealth management and insurance segments, and that implementing robo-advisors will let them expand the pie and serve more families.

Advisors want to work more effectively; they see that a growing segment of their clientele is demanding a multichannel experience, Doughty continues. “Consumers want a face-to-face advisor, but also want to tap into digital tools any time, wherever they are,” he explains.

Manulife told The Insurance and Investment Journal that it was too early to say whether the initiative would be extended to Canada. “Manulife understands the vital importance of a strong advice channel, and we continue to evaluate consumers’ changing needs, to ensure that the channel performs well and meets those needs on an ongoing basis,” says Steven La Barbera, a media relations consultant for the insurer.

Is John Hancock for sale?

Donald Guloien, outgoing CEO of Manulife, addressed rumours that the insurer plans to sell John Hancock Financial Services. An article in The Wall Street Journal on July 13 says that Manulife is exploring an IPO or spinoff of its American subsidiary. The sources cited by the WSJ mention that the insurer hired investment bankers from Morgan Stanley to “assess all strategic options” concerning this transaction.

“It’s all market rumor and speculation as far as I’m concerned,” Steve Roder, Senior Executive Vice President and Chief Financial Officer at Manulife, told Reuters in an interview.

The ultimate question

Asked by an analyst whether an IPO or spinoff is out of the question, Guloien replied prudently. “I don’t think there are any non-starters going on because when you run a public company, you have got to look at every perspective in a dispassionate way. That’s not to suggest that it’s easy to do. The ultimate question is: does it build shareholder value? That would be the criterion our company would use.”

Commenting on Manulife Financial’s Q2 results, Guloien admitted that some sectors are struggling, but that the company “regularly investigates all opportunities to improve shareholder value.”

U.S. crucial to Manulife platform

He categorically rejects the idea of bowing out of the US market. “Frankly, I can’t see a time when Manulife wouldn’t be offering U.S. products, and wealth and asset management will obviously be a big part of that,” he says. He points out that the United States is the largest investment and wealth management market in the world, and that it is crucial that the country be part of the Manulife platform.

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