Three years ago, The Canadian Business Journal introduced readers to HUB Financial, a national Managing General Agency experiencing tremendous growth. At that time, we interviewed Executive Vice President John Lutrin, who told us, “We not only want to survive the new era, but thrive.”
Just recently, HUB Financial once again flickered on our radar. The CBJ team decided to investigate HUB Financial’s progress over the past three years. Our findings were astounding. With enhanced product offerings and a stable, permanent infrastructure, HUB Financial proves itself as a firm more than worthy of continued attention.
We again reached out to Lutrin, seeking insight into how HUB had maintained such exceptional performance. He explains that the key to HUB Financial’s success is its ability to, “offer efficient and fully comprehensive products and services, while remaining on the leading edge of technology.”
Fifteen Years of Excellence
HUB International, a leading global insurance brokerage, established HUB Financial in 1999 as a Canadian Managing General Agency (MGA). HUB Financial’s commitment to providing support to financial advisors and brokers while allowing their clients to maintain their independence quickly pushed HUB to the forefront of the industry. Today, HUB Financial is the largest MGA operating in Canada, and has extended its service offering to include HUB Capital, a Mutual Fund Dealership, and Flexsave, a Private Health Spending Plan (PHSP). Both HUB Capital and Flexsave are now integral parts of HUB Financial’s business, and effectively compete with specialist firms.
HUB Financial operates Canada-wide, with main offices in Woodbridge, ON, Winnipeg, Calgary, Vancouver and Montreal. The company also runs satellite offices in London, ON, Ottawa, Victoria, Richmond and Surrey, B.C. Serviced advisors and brokers exist across the country, from the Maritimes to the Rockies. HUB Financial currently employs about 180 staff members from coast to coast.
Independent Broker Support
The central philosophy behind all sectors of HUB Financial is to allow independent financial advisors and insurance brokers to operate their businesses in a fully self-governing manner. HUB Financial does not seek to control or monitor their clients’ operations; instead, the firm offers the comprehensive support and solid infrastructure that best allows financial professionals to grow their practices.
“Our real value proposition is in how we structure ourselves,” explains Lutrin. “Independence is something cherished in the distribution channel and revered by true brokers; yet there aren’t many truly independent, comprehensive distribution opportunities in Canada. HUB Financial really sets itself apart by offering a robust value proposition that specifically caters to the independent financial professional that wishes to offer his/her clients a wide array of products.”
Each subsidiary of HUB Financial operates as part of an integrated unit. HUB Financial is the firm’s backbone. The HUB Financial staff offers extensive sales training and coaching to insurance brokers who seek to develop their skills with a MGA without sacrificing their independence.
HUB Capital is a mutual fund dealer that allows advisors to consolidate their practice, enjoying the benefits of the structured, robust services and registering with HUB Capital, while maintaining the unique characteristics that constitute their business.
Lutrin believes that brokers and financial planners registered with HUB Financial/Capital can “have all their eggs in a stable, reliable basket.” The training and support HUB Capital offers allows advisors to train and have a practice that offers a variety of deliverables, furthering their value to their clients.
HUB Financial’s newest program, Flexsave, allows registered advisors to offer clients a PHSP without high premiums and uncontrollable costs. Flexsave is the company’s fastest growing business offering, and is expected to be a major aspect of the firm’s future growth.
A Revolutionary Health and Welfare Trust Plan
In Flexsave, HUB Financial recognized a gap in the health and welfare trust market. Employers, displeased with the high premiums and rigidity of traditional employee health and dental plans, sought a program that would allow them to take control of their benefit options. HUB Financial introduced Flexsave, an innovative PHSP that allows employers to better manage employee benefits, as a response to this demand.
“A challenge in traditional group benefits programs is the inability for the employer to control costs. Premiums increase, and the business-owner grows dependant on their claim history,” says Lutrin, “With Flexsave, the employer determines the monetary amount set aside for the employee. The employee can then use that amount until the end of the year. The amount initially set aside is tax deductible for the employer, and becomes a tax-free benefit for the employee. It’s a win-win program.”
Flexsave reflects its name – it’s flexible. The financial advisor can offer their client a non-traditional alternative to other benefit programs that provides business-owners with the tax efficiency and cost control they seek.
Advisors currently offering Flexsave see the difference it makes for their clients. The client gains complete control of the costs associated with their employee benefits plan, while the advisor gains commissions on a per claim basis, providing an ongoing revenue stream.
“When you look at HUB Financial’s infrastructure and stability with the flexibility of the Flexsave program, our ability to offer consolidated offerings without compromising independence really does set us apart,” adds Lutrin.
The HUB Financial Advantage
HUB Financial’s greatest asset is its ability to expand each financial advisor and broker’s expertise and abilities. HUB Financial and its subsidiaries encompass a wide breadth of strategies and concepts available to financial professionals. The firm carries experts in everything from life insurance to investment products, Flexsave to mutual funds. The education, support, and guidance HUB Financial specialists can offer allows independent advisors to expand into new markets and better develop their business.
Through offering different products as an integrated unit, HUB Financial can introduce financial professionals to new areas of business.
“The more we grow, the more our advisors are embracing the fact that HUB Financial really does open the door to new markets,” explains Lutrin, “Many advisors limit themselves and specialize in the line their most comfortable in – this is a problem. If advisors see themselves in a singular role, they aren’t offering the best value to their clients. A competitor will take control of the client’s other financial planning needs.”
“Failing to expand removes the essential advisor-client relationship and ultimately the independent advisors core line of business. We tell our users, ‘if not you, then who?’ insinuating that if you don’t develop the expertise in all the areas your client requires financial guidance, you are not fully offering an effective and comprehensive practice.”
Through providing advisors with the tools needed to expand their service offerings, HUB Financial experiences increased organic growth. Financial planners can develop a more well-rounded practice, thus improving HUB Financial’s presence in the MGA, mutual fund dealer, and PHSP industries.
HUB Financial’s second main mode of growth is acquisition. The firm continually seeks way to improve and expand its offerings and thus gain a greater market share. In late 2013, Hub Financial completed a large transaction, intensifying the insurance side of its business. According to Lutrin, “Acquisition has always been a key to our business; this strategy will continue to be a large part of our growth.”
On the ‘Bleeding Edge’ of Advancement
HUB Financial truly is a pioneer in the industry. The firm seeks to develop innovative products and services before competitors. This requires consistent monitoring of financial market trends and close observation of advisor and client needs.
“Growing pains are a part of rapid growth,” explains Lutrin, “HUB Financial is more than ready to take these on. The benefits far outweigh the challenges we face as a forerunner and reach new heights.”
Some analysts critically refer to the MGA industry as a ‘dinosaur,’ failing to evolve to meet the needs of modern clients. HUB Financial recognizes the need to train and mentor young, burgeoning advisors. Mature advisors must create a succession plan in order to secure their business’s future. This is especially critical for independent brokers and advisors, who may not be able to access mentorship opportunities anywhere else.
Lutrin believes HUB Financial, HUB Capital and Flexsave are “forces to be reckoned with,” in the financial industry. Through educating professionals on how to expand their practices and offering invaluable support throughout every stage of growth, HUB Financial proves to be a company with unlimited potential.