With an eye toward capturing a greater share of the emerging
affluent market, US insurer MetLife has leveraged the online
channel to offer sophisticated financial advice to investors with
an initial investment of as little as $10,000.
MetLife formerly offered such services only for investors with
$100,000 or more in business, but the recession has seen many
clients fall beneath that threshold.
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To retain those customers – and to open the door for new clients
who will emerge as affluent customers in the years to come – the
insurer launched the new investment advisory platform, MetLife Fund
Management Services.
The online platform is available to all registered investment
advisers in MetLife’s broker-dealer group, including those at
MetLife Securities, New England Securities, Tower Square Securities
and Walnut Street Securities.
Jeffrey Wilk, vice-president, Broker-Dealer Investment and Advisory
Product Management for MetLife, told LII the idea is to use the
online channel to offer advisory solutions to more customers
without putting undue strain on advisers.
“The key here is to provide a broader spectrum of clients with
investment advice, and to level the playing field a bit in terms of
the advising relationship,” Wilk said.
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By GlobalDataAnxiety-inducing markets
MetLife Fund Management Services was born of the recession’s
anxiety-inducing equities markets, Wilk said.
“The idea came in the middle of the recession, when we began to see
call centre volume going through the roof, and that transactional
relationship suddenly became a potential advising relationship as
well,” he said.
“We thought that if we could put together a platform that was
simple and streamlined, delivered through the adviser channel, we
had a real chance to deepen the adviser relationship with MetLife
households.
“This is only possible now because the technology now allows
partners to work seamlessly online in something that doesn’t
complicate things.”
Wilk said that nearly 100 advisers are using the platform, and that
the early results are encouraging.
One surprise, he said, was that MetLife’s work on identifying
emerging affluent households revealed the existence of what he
called “the emerging adviser” – young agents who are building
powerful client relationships on the life insurance side but who
lack financial advising experience.
“Emerging advisers are just as important as emerging households,
and in many cases, they are the key to identifying emerging
households,” Wilk said.
“One leads to the other, and if you can help them deliver the
financial advice, you find that these households have several
different financial vehicles with 10, 12, 15 thousand dollars in
them, and so, if you can present them to the client as a whole, you
really have an opportunity there.”
MetLife joined forces with partners Pershing LLC, a unit of Bank of
New York Mellon Corp, to provide clearing services for the platform
and PNC Financial Services Group Inc in Pittsburgh for investment
products and services.
Fully automated solution
MetLife’s platform brings a fully automated advisory product
solution to mutual fund clients whose assets may otherwise be held
directly at multiple mutual fund companies and allows advisers to
build and maintain an advisory rather than transactional
relationship with clients by providing on-going advice, Wilk
said.
“We felt like if we could build a simple enough, paperless
platform, then advisers could offer simplified account maintenance
and support, as well as consolidated statements and tax reporting,
and the tools that provide an automated, on-line process, then we
could actually improve efficiency and productivity at the adviser
level,” he added.
The platform is supported by the electronic, paperless business
procession system known as eApp, which warehouses all business
forms in a single electronic repository, and provides systematic
validation after an adviser completes the electronic form.
It also immediately notifies the adviser of missing information
from the application and provides suitability guidance
automatically.
“The adviser can use the platform to start a conversation with a
client about their accounts here and there, and before you know it,
you are showing the client the underlying assets in their 401k and
their rollover account, and it’s a real breakthrough moment in
terms of deepening that relationship.”
Improving client relationships
The online platform comes on the heels of a pair of innovations
launched earlier this year: the consultative sales support network
known as the Pension Resource Center, available for
MetLife-registered representatives who offer solutions in the
qualified retirement plan market for small to mid-sized businesses;
and the second generation of its Wealth Management Services
platform – a comprehensive online investment advisory product
platform that enables advisers to seamlessly integrate a client’s
accounts into a single, consolidated account.
All are aimed at changing the nature of the adviser-client
relationship, Wilk said.
“People right now are searching for a trusted adviser,” he
said.
“There has to be an ongoing series of advising conversations to win
that role, and the online platform is a wonderful tool for us to
speak with a much broader base of clients about their investments,
as part of an even broader conversation about insurance needs. We
don’t see those as separate conversations at all.”
Many financial services companies are using third-party providers
for planning services because the cost can be significant to create
a proprietary advice platform aimed at mass-affluent
customers.
Wilk said that MetLife was surprised to find that by partnering
with Pershing and PNC, it could offer an in-house product that was
affordable and that includes nine fund families, annuities or
third-party products, as well as a multi-manager model.
“If you can sit down with clients in an insurance context and let
them look under the hood of their investments, all at once, at the
underlying investments, then you look at risk, you look at return
overall, and you have incoming data as to asset allocation from
PNC, and that comes together in a pretty strong offering,” Wilk
concluded.
Charles Davis
