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Life Health > Life Insurance

Cerulli: Nearly Half of Insurance Professionals Express Preference for Independent B-D Channel

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Nearly half of life insurance professionals say they would want to become independent broker-dealers if they were to switch to another channel, new research reveals.

Cerulli Associates, Boston, published this finding in the second quarter 2012 issue of  ”The Cerulli Edge: Advisor Edition.” The quarterly publication addresses topics shaping the industry and includes market statistics drawn from interviews and surveys with thousands of financial advisors and industry executives across intermediary channels.

The report finds that 48% of advisors in the insurance channel would switch to the independent broker-dealer channel, more than twice the percentage of insurance advisors (24%) who indicate a preference to remain non-independent. The third and fourth preferred channels of these are advisors are the RIA  channel (11%) and the dually registered advisor channel (12%).  

Though most advisors in other channels (bank, wirehouse and regional broker-dealer) prefer to market their services through their current channel, the independent broker-dealer channel consistently ranks second as a destination of choice for these advisors as well. The Cerulli report finds that 16%, 12% and 13%, respectively, of advisors in the bank, wirehouse and regional channels flag independent broker-dealer as the channel of choice behind their current channel.

Accounting for the popularity of the independent B/D channel, the report says, are “the lures of increased payouts, broad market options, and greater flexibility to run their business as they see fit.”

The report notes, however, that independent B/Ds operate on tighter profit margins that those in other channels. Most independent B/Ds report margins in the single digits with the goal of getting to 10%. This compares with margins of 10% with the hope of getting to 20% among advisors employed by wealth management arms of wirehouses.


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