Why an independent financial advisor should work with an MGA

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An MGA is an advisor-based company that provides a broad array of life and health insurance products which include mutual and segregated funds, mortgage services, and retirement and estate planning programs and is centered around client satisfaction.  An MGA has aligned itself with financial institutions, such as Manulife Financial, Canada Life, Standard Life, RBC Insurance, and Equitable Life.  A Managing General Agency, basically designates itself as a major distributor of financial products.

 

The financial advisor acts for the insured rather than the insurer.  He or she determines the coverage required and arranges the insurance with the companies best suited to provide it at a minimum cost to the insured.  Therefore the advisor has an ethical responsibility to clients to ensure that their needs are understood and met, and that they choose an insurance company that is reputable, financially sound, and with a good product offering.

 

Today an MGA’s best approach is to first establish a relationship with a prospect through the sale of traditional life insurance products and then, if appropriate, offer other product and services to the newly acquired client.  Its belief in this is so strong today that it does not, as a rule, offer its ancillary services to new clients (people who have not purchased life insurance from its advisors.) Those advisors who have a few years of experience in the industry will know who are the MGA players in the marketplace.  The advisor will see which MGA caters to their needs.  For example, which firm provides the best product training and administrative support for their clients.

 

An MGA has leaders and managers that have many responsibilities.  These include hiring quality advisors, retention of these advisors, increasing production of life and investment products, assuring compliance with company and regulatory agency rules and procedures and ensuring that everyone associated with an MGA acts in an appropriate and ethical manner.  Careful planning and control is the foundation upon which lies all the elements together in a realistic and reasonable system.

 

As a managing general agency, it needs to build up the relationship between the financial product service providers and the independent financial advisors.  The independent financial advisors distribute the financial products to the customers.  The trend in the financial and insurance industry is gearing more towards intense competition with just a few major players.  As MGAs have access to most of the industry’s products, most of the financial advisors can sell the same products.  The accessibility of products will intensify the competition among financial services.

 

For more information on career opportunities available for financial advisor trainees in Canada, please visit http://www.canadafinancial.ca.