Why insurance professionals should offer wealth management solutions

January 3, 2018 Canadian Underwriter

By: Greg Meckbach

Property & casualty insurance providers wanting to improve client retention could offer more “holistic advice” and better “product density” by offering wealth management, some insurance executives say.

Brokerages can provide a “broader value proposition” to clients by offering them home, auto, business, life and investment products, said Ted Harman, president of Montreal brokerage Accent Insurance Solutions.

Offering wealth management and life insurance gives his clients “a better value proposition than simply offering them home, car and business insurance,” added Harman, who for years has been active in industry associations including Regroupement des cabinets de courtage d’assurance du Quebec (RCCAQ), Concordia Brokers Association, Insurance Brokers Association of Canada and the Centre for Study of Insurance Operations (CSIO).

P&C brokers who also offer life and investment products are “increasing the product density with a client,” Harman added. “The greater product density that you have with a client, the greater likelihood that client will be very loyal to you and they will become essentially life-long clients for you.”

A similar strategy is in place with some agency-based companies.

The Co-operators Group Ltd. put “significant resources” in 2015 in “trying to ensure that we can meet the broad financial security needs of our clients,” Co-operators CEO Rob Wesseling said in a phone interview.

Providing wealth management products through subsidiary Credential Financial Inc. has been “an ongoing strategy” for The Co-operators, Wesseling noted.

Guelph-based Co-operators announced Dec. 12 an agreement to merge Credential Financial with online brokerage Qtrade Canada Inc. and mutual fund provider NEI Investments to form Aviso Wealth.

If the merger closes, Aviso Wealth will have multiple owners, including Desjardins Group and a limited partnership comprised of Co-operators subsidiary Cumis Group Limited, Atlantic Central, Central 1 Credit Union, Credit Union Central of Manitoba, Credit Union Central of Saskatchewan and Credit Union Central of Alberta.

“A significant portion of Canadians are under-served from the perspective of wealth management advice and wealth management products,” Wesseling said. “There are lots of products and services that are available for those that are in groups that some might categorize as high net worth or affluent.”

It is “more difficult,” Wesseling added, for non-affluent Canadians “to really get the holistic advice that they require related to things like wealth management, life insurance, health insurance and P&C insurance.”

This type of “holistic advice” is “not missing in the Canadian marketplace but it’s not as prevalent as it could be,” Wesseling said.

“That’s the key reason why we launched this effort into the wealth management space in 2015,” he added.

The Aviso merger is expected to close before March 31, 2018 and still requires approval from regulators.

Read the full article here: https://www.canadianunderwriter.ca/products/benefits-moving-beyond-pc-1004125341/