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CASE STUDY A BUSINESS BOOST Adding investment products to an insurance practice The practice today Kevin is an insurance advisor in the Winnipeg area. Having started in an industry ‘career shop’ in the early 1990s, in the past ten years he has built his independent practice in affiliation with PPI Solutions. He focuses on the family market with approximately 92% of his revenue from insurance sales and 8% from segregated funds and other investments. Kevin feels comfortable with insurance sales, enjoys the financial planning process and the protection element of insurance, and sees certain insurance products as an asset class that provides both estate preservation and wealth accumulation in a client’s or family’s financial plan. He is less comfortable selling and servicing investment accounts due to the complexity and variability of the markets, economy, and of constructing portfolios – since they require numerous decisions on asset classes and market diversification. Currently his investment business consists mostly of his own and his friends’ money – and only when they insist on his help. For these clients he uses segregated funds and one carrier’s asset allocation portfolio service. He refers his other clients to a respected colleague who is focused on the investment side of the business, however many of his clients make their own contacts and have their money handled elsewhere, which is less convenient for them. Kevin has one staff member, Cindy, who helps with the service side of his business, handling inforce requests such as beneficiary changes, and who also helps Kevin with new insurance applications, underwriting concerns, his appointment scheduling, and general practice management. Cindy is very good with technology and helped Kevin get active on LinkedIn and Twitter. Cindy is instrumental in creating a professional online presence for Kevin, and he finds that many of his clients and prospects search for him on these social platforms upon a reference and prior to meeting with him. Cindy uses social media content from PPI’s e Link Between blog, and from the PPI Advantage Program’s social content service, FSB. ey receive referrals and inquiries through these marketing efforts. Kevin’s practice – by the numbers: 2017 2016 # of Insured Clients 730 691 # of Investment Clients 27 26 Insurance Revenue – New Sales $210,600 $204,200 Insurance Revenue – Residual $24,300 $24,800 Investment Revenue $16,175 $15,800 Introducing PPI Valet Kevin hears about PPI’s digital wealth management platform PPI Valet, powered by WealthBar – and is intrigued. He learns that it’s similar to the PPI Toolkit... an advisor tool that will help him introduce WealthBar’s robo-advisor for investments to his clients. He and Cindy agree that if this platform can provide easy onboarding, online access, and help them to outsource those components of an investment practice that he doesn’t feel comfortable with – in particular, the compliance requirements and portfolio selection – then he could easily incorporate this into his practice and feel confident recommending it. He could finally support all the financial planning needs of his clients, including their investments, and at the same time grow his practice. Page 1 of 2 25948.19.02.26

A BUSINESS BOOST - ppivalet.ca · PPI’s The Link Between blog, and from the PPI Advantage Program’s social content service, FSB. They receive referrals and inquiries through these

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Page 1: A BUSINESS BOOST - ppivalet.ca · PPI’s The Link Between blog, and from the PPI Advantage Program’s social content service, FSB. They receive referrals and inquiries through these

CASE STUDY

A BUSINESS BOOST Adding investment products to an insurance practice

The practice today

Kevin is an insurance advisor in the Winnipeg area. Having started in an industry ‘career shop’ in the early 1990s, in the past ten years he has built his independent practice in affiliation with PPI Solutions. He focuses on the family market with approximately 92% of his revenue from insurance sales and 8% from segregated funds and other investments. Kevin feels comfortable with insurance sales, enjoys the financial planning process and the protection element of insurance, and sees certain insurance products as an asset class that provides both estate preservation and wealth accumulation in a client’s or family’s financial plan. He is less comfortable selling and servicing investment accounts due to the complexity and variability of the markets, economy, and of constructing portfolios – since they require numerous decisions on asset classes and market diversification. Currently his investment business consists mostly of his own and his friends’ money – and only when they insist on his help. For these clients he uses segregated funds and one carrier’s asset allocation portfolio service. He refers his other clients to a respected colleague who is focused on the investment side of the business, however many of his clients make their own contacts and have their money handled elsewhere, which is less convenient for them.

Kevin has one staff member, Cindy, who helps with the service side of his business, handling inforce requests such as beneficiary changes, and who also helps Kevin with new insurance applications, underwriting concerns, his appointment scheduling, and general practice management. Cindy is very good with technology and helped Kevin get active on LinkedIn and Twitter. Cindy is instrumental in creating a professional online presence for Kevin, and he finds that many of his clients and prospects search for him on these social platforms upon a reference and prior to meeting with him. Cindy uses social media content from PPI’s The Link Between blog, and from the PPI Advantage Program’s social content service, FSB. They receive referrals and inquiries through these marketing efforts.

Kevin’s practice – by the numbers:

2017 2016

# of Insured Clients 730 691

# of Investment Clients 27 26

Insurance Revenue – New Sales $210,600 $204,200

Insurance Revenue – Residual $24,300 $24,800

Investment Revenue $16,175 $15,800

Introducing PPI Valet

Kevin hears about PPI’s digital wealth management platform – PPI Valet, powered by WealthBar – and is intrigued. He learns that it’s similar to the PPI Toolkit... an advisor tool that will help him introduce WealthBar’s robo-advisor for investments to his clients. He and Cindy agree that if this platform can provide easy onboarding, online access, and help them to outsource those components of an investment practice that he doesn’t feel comfortable with – in particular, the compliance requirements and portfolio selection – then he could easily incorporate this into his practice and feel confident recommending it. He could finally support all the financial planning needs of his clients, including their investments, and at the same time grow his practice.

Page 1 of 225948.19.02.26

Page 2: A BUSINESS BOOST - ppivalet.ca · PPI’s The Link Between blog, and from the PPI Advantage Program’s social content service, FSB. They receive referrals and inquiries through these

Getting started

Kevin and Cindy meet with PPI Valet’s regional Business Development Manager for a platform demo and to review the sales pieces and tools available. Kevin likes what he sees, and visits www.ppivalet.ca to sign up and get started on the platform.

Cindy promotes the benefits of WealthBar’s robo-advisor to their clients: lower fees, professionally managed portfolios, and the convenience of accessing and managing your account online. Kevin starts mentioning the service and showing the robo-advisor and iPhone app during his new client meetings and his existing client checkups. He and Cindy manage the “invite a client” feature on the PPI Valet platform to email interested clients a link to sign up on WealthBar’s website. Cindy monitors their invited clients on the PPI Valet platform dashboard and follows up to ensure their sign-up is smooth.

A business boost

Kevin’s clients are significantly more tech savvy than he expects and most really like the idea of making deposits, withdrawals, and monitoring accounts online. Many of his clients are very educated about fees for investment management and service, and are happy with his new low fee offering through online digital wealth management. He wants to keep his offering competitive, so he chooses to charge a flat fee of 50 basis points (0.50%) as his financial planning for his clients. This keeps the portfolio expense around 1.2%, excluding the low ETF Portfolio MERs, which are as low as 26 basis points. These fees are deductible as professional fees for his clients as well, making it even more competitive.

CASE STUDY – A BUSINESS BOOST – Adding investment products to an insurance practice

The previously untapped market of his clients’ children, who range in age from 20 to 45, are also very keen on the concept for their investing needs. And the digital nature of the offering means that its management does not require Kevin to commit costly extra resources from his practice to acquire these new clients.

The bottom line

Within twelve months, Kevin’s investment business grows significantly, and his clients are very appreciative of this new planning support that is available through Kevin. He averages over $300,000 in new deposits per month with an accumulated total of $3,918,000 in assets on the PPI Valet platform.

On his accumulated book, Kevin is now earning $19,590 annually, with little expense added to his practice. He does a simplified projection out 5 years, assuming $250,000 a month in new money on the platform through his increased efforts of promotion and marketing. He also assumes a 5% market growth:

A succession benefit

Kevin’s practice is growing significantly in residual revenue, which is something he’s been paying more attention to as his thoughts start to shift to succession planning and retirement. He attends PPI’s Knowledge Program: Buying and Selling a Practice, applies the valuation techniques to his practice and realizes that by adding PPI Valet to his overall practice, he increases the value of his business significantly. He enrolls on PPI’s MatchBook, powered by FindBob, online tool to begin the search for a potential successor. Kevin’s expanded business mix, solid client relationships, and the fact that many of his clients have placed multiple products and lines of business through him, have been important valuation considerations in his early conversations with potential successors and buyers on MatchBook.

All in all, Kevin’s decision to use PPI Valet has given his clients – and his practice – a big boost!

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Advisors introducing clients to WealthBar via PPI Valet are not permitted to provide portfolio manage-ment activities for those assets being managed by WealthBar. WealthBar is registered with Canadian securities regulatory authorities in British Columbia, Alberta, Manitoba, New Brunswick, Newfound-land and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, Saskatchewan, Yukon, North-west Territories and Nunavut (“Provincial Securities Regulators”) as a Portfolio Manager. WealthBar is responsible for “Know your Client” information collection, analysis and periodic updating when determining whether recommendation of a portfolio and trades in securities are suitable for clients. WealthBar and its registered representatives have in-depth knowledge of all securities that they buy and sell for, or recommend to, clients. They know each security well enough to understand and explain to clients the security’s risks, key features, and initial and ongoing costs and fees. CS-131

2019 2020 2021 2022 2023

AUA at Year End 7,263,900 10,777,095 14,465,959 18,339,257 22,406,219

PPI Valet Revenue $36,319 $53,885 $72,329 $91,696 $112,031