Established in 1999, HUB Financial is a managing general agency supported by more than 200 employees across Canada. During its 20 years in business HUB has established itself as one of the largest, most-respected MGAs within the financial services industry from coast to coast.
A MANAGING GENERAL agent is appointed by an insurer to seek out applications from agents for insurance contracts or to negotiate contracts on behalf of an insurer. Planning and executing a secure financial future is one of the most prudent endeavours businesses and individuals can undertake. At HUB Financial it’s about identifying and growing a team of professionals who are the very best in their field. A successful MGA puts in the time and effort in providing the necessary resources for advisors and their clients to succeed.
A secure financial future is something we all aspire to achieve and it is in fact readily attainable when advisors and clients have the optimal resource tools and information available to them in order to formulate the most prudent decisions for each individual situation. Two important facets of building that success can be broken down into two primary categories: insurance and investments.
The Canadian Business Journal recently spoke with the two senior executives from HUB that head up those two aforementioned categories: Andrew Fink, Executive Vice President, Insurance Division and Aly Damji, Executive Vice President, Investments Division. Fink is based out of the company’s Vancouver office, although he spends much of his time on the road while Damji is based out of the corporate head office in Woodbridge, Ontario, just north of Toronto.
Two Decades of Growth
The birth and rapid growth of HUB Financial was fundamentally borne out of acquisitions.
“In 1999 a group acquired the Independent Brokerage group in the west and that is really what stimulated the scope of HUB Financial becoming a meaningful MGA from a size perspective,” begins Fink. “From there the slow but systematic acquisition of many other MGAs has amalgamated us into one of the biggest, if not the biggest, MGA in the country.”
As part of his daily responsibilities Fink wears a hat that is very insurance-risk focused and he leads a team that pulls together the marketing up-front, pre-submission, case consultative and premium development right through to applications being submitted, commissions being paid and all of the encompassing experience that the advisors and the network would interact with.
“We are in six regions coast to coast and about 35 to 40 marketing specialists that are either broker development specialists, directors, advanced-case consultants or regional vice presidents,” he says.
As his title indicates, Damji’s responsibility is to grow the company’s investment division, which includes interaction with stock brokerages, private-money managers and with banking solutions. The main focus on the investment side is HUB’s Segregated Fund dealership and its Mutual Fund dealership, the latter of which makes HUB quite unique in Canada because many of the other MGA competitors don’t have their own dealership from which to draw upon.
“I work with a team of investment specialists throughout Canada with the focus on them servicing their advisors and helping them get into new markets while growing their existing book of business,” notes Damji.
Similar to insurance, the investments division delves well beyond the scope of sales and marketing. A significant focus within the dealership is on the way the company processes business, the way it pays commissions and the technology that is made available to advisors.
“Technology on the investment side is something that we continue to focus on almost on a daily basis,” confirms Damji.
At HUB there are a limitless number of programs to help new advisors succeed in the industry. Whether an advisor has sights on the middle market or the high end, HUB has a plethora of programs that carry mass appeal within the marketplace.
“I would say our value proposition is quite wide where there are a lot of independent individual brokers that could work well with us,” says Damji.
“It also depends on the segment,” adds Fink.
“If we’re looking to partner with a person who is new to financial services there are clearly some defined characteristics such as a track record of their success in their previous endeavours, their coach-ability, the ability to prospect and have a wide natural market. We’ll give them the product knowledge and process training.”
Alternately, with an established advisor in the middle market that has already proven their capabilities it becomes more a case of whether the value proposition that HUB offers is a good match for that individual’s three to five-year plan in their practice, which is most often the case.
Unique to HUB is the comprehensive way that it brings new people into the business as a MGA.
HUB offers a highly comprehensive, proprietary A to Z New Advisor School. It’s an extremely intense competition to merely be accepted into the school and there is a considerable amount of pre-work required on the part of those interested in moving forward. Personality and profile testing is conducted online and a great deal of time and effort goes into selecting the right people to join the business.
Throughout many of HUB’s regions the company has what is known as an Apprenticeship Program. It creates a pathway and a mentorship opportunity for new advisors where a director at HUB Financial will do takeaway meetings with them and run planning sessions for them in their practice and create accountability if that is what is needed. It’s a type of hand-holding experience to ensure they are maximizing opportunities and success for at least the first two years.
Included within the Apprenticeship Program is proprietary sales process training that helps advisors with prospecting – and that’s the No.1 job. Product is available for everyone, but how an advisor positions himself or herself in front of the next Canadian to provide maximized value in an initial meeting is the defining criteria. From that perspective, Fink and his team provide all the necessary material and training and neatly assemble it all together with a white-label to their name, their brand and their colour scheme, resulting in an impeccably personalized and professional-looking package.
“Out of basic training comes training opportunities to specialize or break into new markets whether an advisor then wants to pivot and focus their practice on disability or living benefits, long-term care or criticalillness insurance. We have proprietary training platforms and programs to help advisors have success across those lines,” adds Fink.
Training development continues for seasoned advisors looking to penetrate into the big premiums and high-income earners where many additional planning opportunities abound.
As we move deeper into the 21st century millennials are becoming a larger target market and it’s evident they are looking to communicate in a much different manner than previous generations, and it centres almost exclusively on methodologies involving technology.
“I think millennials want to leverage technology more with their clients and use more social media and streamline the process,” says Damji. “If you were to compare us from technology standpoint with many of our MGA competitors we’ve really taken a lot of initiatives to be on the cutting edge of technology and allow our advisors to leverage that in day-to-day business.”
According to Fink, he believes millennials are more cognizant on how they wish to interact with purchases, planning or whatever else they are doing in their personal lives. Most everything a millennial enacts is digitally driven, whether it’s communicating with friends, booking a vacation, a hotel or hailing a ride-share service. Adapting to how current and future generations want to communicate requires constant planning and implementation of new technologies and services.
“We bring someone into this business and the first thing we do is put a 30-page life insurance application in front of them with a pen. That’s conflicting with what they (millennials) know they want and what their natural market and clientele is going to expect,” says Fink.
Both Fink and Damji agree that what propelled HUB Financial to where it is today will not be what advances the company to where it will need to be over the next five to 10 years, and so a major shift is underway, and it is being spearheaded by technology.
“We’re very proud of the partnerships that we’ve created and the work that we’re doing with our carrier partners to drive that forward and to not be content just with e-apps being the solution, because that’s just one problem that we’re solving,” states Fink.
The reality is that these products are commoditized and the price is marginalized. Advisors are now at the point where their success differentiator has to be the specific value and professional advice that they’re able to provide to their clients in a one-on-one basis. They can’t afford to spend half of their day processing paperwork and being archaically stuck with how rapidly data transfer flows today; it’s simply not a viable option.
“We have to create a bionic advisor where they still have the warm handshake, the eye contact, the relationship and the advice but technology drives much of the required functions of being in financial services,” explains Fink. “Now is a major pivot point in that transformation. We don’t want to be a boat at sea without a motor just going where the tide is going. We want to create the tide.”
“What we are doing that many others are not is that we are teaming up with the insurance companies telling them what we want to see and working with them to help deliver that technology,” adds Damji.
Fink and Damji both say that the company has never been so naïve as to believe there is the requisite in-house expertise to build out all of this customized technology, which is why they’ve developed an exclusive strategic partnership with a technology company that specializes in this area.
“We’ve created the perfect one-two touch,” notes Fink. “Best in breed, brick and mortar MGA with world-class training and development coupled with unmatched technology and digital solutions for matching all the advisors that are used to the other experience.”
In a previous CBJ discussion with HUB Financial it was emphasized that a headlining focus is to disrupt the financial services industry by providing vastly improved methods in order to conduct merger and acquisition activity, succession planning and talent management within financial organizations.
“Succession planning has been very important to the company. I believe Andrew and I are in the positions we are today because we were identified as future leaders and we one of the few that have had that succession plan and started implementing it,” remarks Damji.
Also on the radar and close to the hearts and minds of the senior executive team at HUB is the succession of its advisors. Some are inching closer to retirement age and yet not all of them have made adequate preparations. In fact, Damji says some top advisors have passed away without a succession plan, which has resulted in difficult circumstances impacting their families, business and clients.
“We’ve built in plans, processes and programs to ensure that all our advisors can have succession plans to keep their families secure if something were to go against them. In the business we’re in, we are out there to protect our clients but at the same time we need to protect ourselves and build better lives for everybody,” he mentions.
“We came to the conclusion that having our most important advisors being without a plan is not acceptable,” interjects Fink. “We’ve told them that if by June of next year they don’t have a written, actionable succession plan that we’re likely not the MGA partner for them going forward.”
As bridge support, HUB is offering every advisor all of the internal support they require and in the interim have offered them a letter of intent (LOI). That way, if anything were to happen the families would be protected and HUB would be in position to retain the advisors’ clients to ensure everyone continues to be served in the best possible manner. This setup is not just for advisors who have passed away – it also includes disability and illness.
Several years ago HUB created a proprietary relationship that is essentially a dating site for buyers and sellers of blocks of insurance and investment businesses. What Fink and Damji are seeing come out of this tech-insurance investment web platform, known as FindBob, is the capability of revealing nearby investment specialists hoping to partner with somebody whose primary experience is with life insurance, resulting in the development of a fruitful, all-inclusive partnership. FindBob helps smart financial institutions protect existing assets by encouraging succession behaviour within their organizations.
“In many of our regions from coast to coast we’re now at a point where the community is far more robust. So if you are an advisor and first-time signing up in the GTA you would instantly as you went into the platform have 100 people that you could engage and interact with. It was slow getting off the ground, but it is like a snowball with momentum and now we’re seeing tons of fruit coming out of that partnership,” says Fink.
FindBob’s value proposition has also evolved; it’s not just a buy and sell platform. There are a number of ancillary values with an online web community, which can be seen through such social media platforms as Facebook and Instagram, specific to independent financial planners.
Technological and training advancements are always part of the in-depth corporate menu but Fink says the team is very excited about the ramping up of the Advanced Case support. Anyone can access the products that the advisor next to them can access, the pricing of those products is accessible by everyone and so advisors need to differentiate themselves through excellent advice and planning for their clients.
“Equally and even more important in the advanced markets – the high-networked space, the corporate space – our belief as an MGA is that our advisors need access to support, training and case consultation even more than everywhere else because that’s really where the planning and advice add so much value for our Advanced Case and Estate Solutions Group,” says Fink.
HUB advisors can access for things as straightforward as product questions, spreadsheeting or proposals they need support with, right down to actuarial support and some of the more complex planning around family trust, Hold-Cos that interact with Op-Cos, etc. It’s done at no cost to the advisors, which is oftentimes not the case with the competition, where advisors are expected to relinquish a portion of their compensation for those types of services.
“Conversely, if you’re an advisor and you need to get into the field and you need a meeting with a client’s accountant and you don’t feel confident that you have all the tools necessary in your tool box, we have people that can come in and drive those planning meetings and sales on your behalf, on the proviso you are of course willing to forgo some of your compensation,” says Fink.
On the investment training side, HUB carries a program under its MPAT series, which stands for Masterworks Professional Advisor Training. The program is dedicated to investment products where HUB professionals will go out and educate an advisor who might not be experienced on the investment side of the business; perhaps their primary focus is insurance risk. The HUB employee will teach them everything they need to know to go out and be able to offer their clients investment products and do a more comprehensive financial plan.
“We’ll teach them everything from how the stock markets and investments work and the goals they should be achieving for clients. Once that’s been identified we inform them on how to put that into a needs analysis and how to present it to your clients and implement it,” explains Damji.
“Our team will go out with advisors and do joint field work – at no cost to the advisor – with the aim of getting them into that market and be able to offer their clients more advice and a holistic financial plan,” he continues.
Distinctly unique to HUB is that it has its own independent investment division. With many other MGA competitors the investment aspect seems to be secondary to their primary planning mandate, often resulting in their insurance teams providing support on the investment side, which of course is less than desirable. Conversely, Damji leads a team of investment specialists at HUB that are entirely focused on investment products.
“Because we have a mutual fund dealership it allows us to process trades, do all the administration and handle segregated funds just as mutual funds would be handled. We have a lot more in-depth knowledge than would be seen anywhere else,” he says.
At HUB there is an expertise to build out a value proposition that is looking three to five years out with the knowledge of what is to come, having already experienced it with the mutual fund dealership and thus providing the ability to prepare advisors accordingly. Advisors typically fall into a specific specialization and whether they are doing investments in groups and insurance they usually have one that they gravitate towards.
“For every touch point that we have with them the chances of retaining and growing that client is exponentially higher,” offers Fink. “We want advisors to be able to cross-sell and diversify their income stream.”
Regulation, compliance and critical mass are three specific areas of immense importance, and require attention to detail to all times.
“Compliance is always one of the things we and our advisors have at the top of mind. We have a great compliance team and the focus is to help our advisors to do good business and keep their books clean,” says Damji.
Leadership teams at HUB not only educate the advisors on what they need to do to remain compliant, they are also given direct help, if requested. HUB offers up its best practices and provides each advisor with the necessary templates and disclosures that are available on the company’s website. It’s simply a matter of updating certain areas with each advisor’s own personal information and they’ll be equipped with a compliant package that is ready to go.
“A lot of sales processes that we have within our MPAT program provide a full client file, which is bulletproof when it comes to compliance,” says Damji.
Looking to the Future
An important business shift over the next two to three years will be to concentrate on greater independence, which is the exact opposite of what is happening in the industry right now, with many MGA companies being purchased by insurance entities.
“On the dealership side we’re seeing a lot of dealers being purchased by fund manufacturers. In my personal opinion the industry is going in the wrong direction with that. One of the great things is that we are truly independent,” Damji proudly says.
The commitment from the team at HUB is to work closely with all their advisors to find the best solutions and provide the best education and training. It’s about identifying the products that best suit their clients.
“We would never push the sale of a certain product just because it meant more compensation for us. It is always truly about what is in the client’s best interests,” reaffirms Danji.
Damji is emphatic that he wants to build out HUB’s dealership, which has been very successful over the past few years. Year to date HUB has increased its dealership by 10%.
“In the past, many advisors used our dealership as a secondary opportunity because they were life-focused and wanted to do all business in one place,” he says. “Now advisors are coming to us that are only on the investment side, only offering mutual funds and selecting our dealership.”
Exploring new innovative opportunities is always front of mind, but Fink also notes that staying the course remains a priority because that is what has provided so much success to this point. The primary aim is about helping advisors with growing their practice, having more success with the clients they have, accessing more potential clients through strategies and planning and continuing to identify methods of driving organic growth in assisting advisors to take their practice to the next level. A parallel objective is that the HUB team is also still very passionate about seeking out more acquisition opportunities.
“We have really benefitted from partnering and acquiring other MGAs and making sure that there is value. Our carrier partners have been a big part of our success and we’re actively looking and continuing to explore acquisitions as a go-forward strategy,” says Fink. “We have an opportunity to have our advisors be more efficient, breaking into new markets, and growing their businesses with our support. It’s what we’ve done all along, and it’s going to continue to work.”
The best way to gauge success from start to finish is ultimately defined by the level of customer satisfaction. The skilled, professional employees help to push HUB Financial to the pinnacle of an intensely competitive industry where they find themselves at the top of ladder and the professionals who work there have every intention of keeping it that way.