26 February, 2018 07:00
Photo : Freepik
Major general agents, as a Group, Cloutier and Group financial Horizons believe that the small general agents will be able to stand out in the future. They will, however, need to play their cards right, prevent they.
Michel Kirouac, vice-president and general manager of the Group-Cloutier, believe that some of the MGA dealing with a small number of insurers, and hiring a fifty advisors have been very successful. «There is room for the smaller players,» he said during a panel held at the Conference of the insurance and the investment.
The Group Cloutier is probably the smallest player in the sector of mutual funds. When it was launched in 2007, it had assets of $ 67 million ($M). «We were told : «You are mad, it is necessary to manage billions». It was successful, we went to three billion dollars (G$). It’s done, but it is important to have the human resources to conduct the whole thing «, he said.
The bigger players are very strong competition to get your hands on the best employees, not only in sales but also in marketing, in administration, in computer science, in particular. Two general agents who combine their forces are better armed to equip themselves with the best tools and provide adequate support to their sales force, adds Mr. Kirouac.
There is no magic formula when one wants to merge two general agents. «These are two entrepreneurs, each with its politics, its ways of doing business, its shareholding,» says Kirouac.
Trial and error
Elsewhere in Canada, other tests have worked, as has been the case of Bridgeforce. This company has consolidated five general agents who are equipped with common resources, especially in terms of compliance.
In Quebec also, similar efforts have been conducted since 1995, » says Kirouac, giving the example of Gilles Cloutier, Daniel Labonté , and Dir Parent. «They wanted to give themselves a «back-office» common comprised of five general agents. Gilles we summarized it by saying : “We had 10 damn good dinner, but it was never given anything”. Yes, it is necessary to try things, instead of simply saying that it must sell because it is not big enough, » said Mr. Kirouac.
James McMahon, president, region of Québec, in Horizons, estimated that there will be further mergers and acquisitions in the industry. «For some of the agents general smaller, but very well styled, with a service offering separate and distinct, they can survive,» he says.
According to Mr. McMahon, the smaller players who do not go out of the lot will have trouble finding capital to finance the needed expansion of their distribution network and the support tools to the sales force.
Michel Kirouac noted that the appetite for risk decreases with age. Entrepreneurs to take the age, in this sector as in others.
«Made in the end of the career, it is less obvious want to invest a lot of money to acquire a competitor. This is why people speak of a sale or merger. Be yourself and the buyer, it requires a lot of money and a little courage. «
The heaviness of the compliance
The weight of regulation is a significant challenge for general agents, » adds Pierre Vincent, executive vice-president, individual insurance in iA financial Group. The trend is observable everywhere in Canada. We want the advisor, especially when the sale of segregated funds, is required to do business with a distributor that ensures compliance rules, as is the case for mutual funds.
The regulator is expected that the needs analysis has been made and that the right product is sold to the customer. If this advisor has done business with several insurers and will receive the visit of people of the compliance of each of them to verify its practice, it is likely that it will change its ways of doing business, » says Mr Vincent.
Michel Kirouac noted that the attitudes have changed in recent months. General agents in quebec are grouped together to make a submission to theAuthority of the financial markets. They argue that the adviser should, ideally, be associated with a general agent.
Mr. Kirouac is, however, not certain that it will be until then. «If the regulator forces the adviser to deal with a single general agent or distributor for all of its needs in financial services, it will kill all the small players. We have 18 insurers, Horizons also, Insurance Hollis (formerly known as the NACC) also. For the one who only has two or three, the counselor will what ? «