Should RIAs Consider an Insurance Partner?

Organic growth is the buzzword in the RIA industry right now, with all firms wanting it—and many still looking for ways to achieve it. Expanding insurance solutions has the potential to drive significant top-line growth. Not only does it make the client relationship “stickier,” but it helps create new revenue sources.

Yet many RIA firms have been hesitant to delve into the insurance sector for a variety of reasons, primarily because it hasn’t been presented around client or advisor experience and with an understanding of the fiduciary space.

There is an understandable push for RIAs to provide all necessary solutions in house, but integrating insurance offerings can be a daunting task. The risk of falling short of client expectations, combined with the intricacies of high-level insurance delivery, have created a gap that RIA firms looking to include insurance offerings are compelled to address.

Picking the right partner can be critical in bridging this gap. Forward-thinking RIAs align with an insurance distribution partner that understands their work and the intricacies of the advisor-client relationship. These partnerships, when done right, can enhance client outcomes, alleviate compliance concerns, streamline paperwork and administration and equip advisors with a consistent playbook for identifying and implementing insurance solutions for their clients.

What Should an RIA Expect in a Partner?

An RIA-focused insurance distribution partner ideally provides bench strength, acting as an extension of the RIA and providing a range of benefits that cater to the evolving needs of both clients and advisors.

Comprehensive, Holistic Financial Advice. The ideal insurance distribution partner should deliver solutions and results that help advisors improve their clients’ overall financial score, enhance the advisor-client relationship and support the client’s goals and objectives. Engaging collaboratively with enterprise leaders and advisors ensures a holistic strategy that prioritizes the client’s unique needs and aspirations. Emphasizing a planning-centric outlook, these partnerships aim to:

• Deliver unbiased recommendations;
• Maintain compensation transparency; and
• Adhere to compliance measures that safeguard both advisors and clients from potential pitfalls.

A Consistent Playbook for Advisors. An experienced insurance partner should help the RIA develop a scalable playbook for advisors within the firm. This uniform approach ensures advisors across an organization have access to the same resources and strategies when identifying and implementing insurance solutions for clients. A consistent playbook is designed to ensure the delivery of high-quality advice, which inevitably results in a positive client experience built on unwavering trust. It is also:

• Profitable; and
• Designed for a positive client experience, giving capacity back to the advisor.

Embracing the Future

The future of RIA firms lies in their ability to adapt and expand their service offerings. In the case of firms in acquisition mode, the future is now. These firms see the benefits to the advisor and end-client of enhancing their insurance offerings to their capabilities, meeting the sophistication and professionalism set for the rest of their services.

As the industry continues to change and clients seek holistic financial solutions, integrating insurance services is increasingly attractive. Embracing innovation and strategic planning will be crucial for RIA firms to thrive and deliver the comprehensive financial services that clients expect today.

Chad Druvenga is President and CEO of CBS Brokerage.