By

With many insurance companies looking for new ways to distribute their products, industry experts say the CPA channel is drawing a great deal of attention.

Mass Mutual Financial Group, Springfield, Mass., recently announced it formed a strategic alliance with RSM McGladrey, Inc., a business consulting, accounting, and tax firm located in Bloomington, Minn. RSM McGladrey serves clients from over 100 offices nationwide, dealing with mid-sized businesses and their owners, according to Connie Smith Benning, communications director for RSM McGladrey.

As part of the venture, Mass Mutual joins two other carriers in the alliance, National Life Insurance Company, Montpelier, Vt., and Pacific Life Insurance Company, Newport Beach, Calif.

“Mass Mutual has been dealing with accountants for a very long time,” says Philip Stevens, vice president of institutional distribution for Mass Mutual. “They’ve always been a good source for referrals, and excellent partners in planning,” he says.

Stevens feels that many CPAs would like to expand their practice beyond the typical accounting services to other types of financial services, including life insurance.

RSM McGladrey’s goal with the alliance is to provide its clients with a full menu of services that meets all their financial needs, says Benning.

Stevens notes that while working with CPAs is nothing new to Mass Mutual, the arrangement with RSM McGladrey was a way of formalizing access to the firm’s clients, as well as many more CPAs in a national alliance.

All three carriers are making their products available to a network of agents who are designated to work with the RSM McGladrey partners.

These agents are not RSM employees, but are independent agents who may or may not have had relationships with the three carriers involved, says Ann Dehner, vice president of marketing operations for National Life.

While the agents in the network may either be independent or affiliated with any of the carriers, the agents Mass Mutual is selecting to participate are among its top producers, says Stevens.

“RSM has to feel good about the agent and the individual offices have to feel good about our people–that’s why we’ve made this available to our top tier,” says Stevens.

“There’s a pretty extensive due diligence done when appointing agents to work with the RSM McGladrey group,” adds Mike Pinkans, vice president of sales and promotion for National Life.

“We’re looking for the agent who maintains a significant level of production, and also has a process that falls in line with providing solutions–rather than the sale of product,” says Steve Mulder, COO of the RSM McGladrey Insurance Alliance.

Mulder explains that when a client has a situation that may involve the use of life insurance as a solution, the case is reviewed by an internal advisor. “We have licensed advisors who are both securities and insurance licensed.”

From that stage the advisor evaluates the case and refers it to one of the licensed alliance agents, he continues.

The agents affiliated with the alliance are licensed with all three carriers, and are also able to use other carriers through a brokerage arrangement in the event none of the primary carriers have the product to fit the situation, he says.

Many observers say the biggest challenge agents face when dealing with CPAs–whether there is an arrangement in place or not–is building the trust between the CPA and the insurance agent.

“It takes a lot for a CPA to trust an agent in front of his client,” says Dehner.

Stevens also feels it takes some work to raise a CPA’s comfort level about including life insurance as a component of an estate plan solution.

Pinkans agrees, “The biggest problem you have with any CPA is to get them to consider that life insurance is needed as part of the overall planning process.”

Mulder says there are some obvious barriers, since insurance is so different from the accounting business. But RSM has been overcoming those barriers and is seeing some success in the program, he says.

“The evolution of the relationship has gone very well in building the trust necessary to make those referrals,” he says.

Last year, approximately 80% of their partners participated in the referral program, and Mulder is expecting that to increase over the next year.

“Once they go through the process and see the value added, the partners feel good about it,” says Benning. “Once someone has a successful referral, they become a strong supporter of the program.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, May 20, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.