Can advisors afford to just be portfolio managers?
RetireOne President Ed Mercier recently appeared with Mark Colaço of Dimensional Fund Advisors on Robert Huebscher’s Gaining Perspective Podcast to discuss the future of financial advice, and the role insurance might play in it. In the podcast, Ed and Mark talked about each company’s respective survey data, and the trends they seem to point to.
In his discussion about the Dimensional survey, Mark talked about advisory firms needing to focus on more services to attract both clients and employees, as well as the fact that the survey identified several key differentiators that correlate with firm success. One of these differentiators is use of insurance products, like annuities.
Ed talked about the importance of an outsourced insurance desk (OID), especially for advisory firms that don’t have built-in insurance capabilities:
“At Schwab, I saw advisors really struggle with insurance-based products, because it doesn’t fit into their ecosystem naturally, right? So, all the advisor investment products, like ETFs and funds, they sit on a custody platform, and it’s really easy for the advisor to access. The insurance products sit off-platform, so it’s really hard for them to be able to integrate into their practice.”
Ed also talked about how technology has made integrating insurance solutions easier, as well as the increased advisor interest in annuities suggested by our 2022 PARI survey.