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Life Health > Running Your Business > Selling

5 Ways an Outsourced Insurance Desk Can Boost Recruiting for RIAs

By Jeff Cusack

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What You Need to Know

  • Your firm could do everything.
  • You could also buy services from outside companies.
  • An OID provider makes the case that easier can be better.

The joint RetireOne and Midland National 2022 RIA PARI Survey recently revealed that 37% of RIAs don’t offer insurance.

This translates to nearly four in 10 advisors being unable to deliver truly comprehensive financial planning services to their clients.

However, it’s becoming increasingly apparent that the future of financial advice is holistic in nature.

That’s where an outsourced insurance desk, or OID, can be an asset to the firm, supporting its advisors’ abilities to deliver zero-commission annuities and insurance solutions that are best suited to clients’ needs.

If you own or help run an RIA, here are five ways an OID can boost your recruiting.

1. You can offer more comprehensive financial planning services.

By partnering with an OID, advisors can provide comprehensive and holistic financial planning services, including insurance and annuities, without requiring a license or additional resources.

By providing a wide range of product offerings, like annuities and life insurance, advisors can offer a more comprehensive suite of options to clients.

This can make an RIA firm particularly attractive to advisors who want to offer such a range of products, but lack the insurance license or FINRA registration to do so.

2. You can increase revenue potential.

According to Dimensional’s 2021 Global Advisor and Investor studies, firms that offer annuity and insurance solutions enjoy more growth in their assets under management (AUM), more revenue, and onboard higher-AUM clients than their competitors.

By offering insurance products, RIA firms can generate additional revenue streams that can help to boost their bottom line.

This can be an attractive proposition for advisors who are looking to increase their earnings potential and grow their business.

3. You can improve compliance support.

Advisors transitioning from the commission model to the fee-based model must often weigh whether the insurance solutions they stand to leave behind are worth the additional compliance rigor they must contend with.

A robust outsourced insurance desk can help ensure that all insurance-related activities are fully compliant with industry regulations.

This can be an attractive proposition for advisors who are looking for support in navigating complex regulatory environments.

4. You can provide more efficient processes.

An OID provides ongoing services and support for all client policies, handles everything needed to meet suitability standards, and complies with the SEC’s Regulation Best Interest rule.

This allows RIA firms (and advisors, by extension) to streamline their operations and improve efficiency.

By outsourcing a firm’s insurance needs, advisors can reduce their administrative burden and focus on providing the best advice to their clients which, in turn, can translate into more revenue for advisors.

5. You can provide more education and support.

Navigating the complex world of advisory insurance solutions can be daunting for advisors, and it’s not always easy to find continuing education to stay abreast of such changes.

Luckily, OIDs can help.

Because staff at OIDs must stay up-to-date on regulations and insurance technology, they can often provide education and support for advisors, helping them expand their knowledge of insurance so they can better understand what kinds of solutions are most beneficial to their clients.

The potential for professional growth and development can be a powerful tool for attracting new talent.

Not All OIDs Are the Same

It’s critical for RIAs to conduct adequate due diligence when selecting an OID partner to bolster their firm’s recruitment strategy.

Keep in mind that:

  • Some OIDs charge platform fees. Some do not. Be sure to ask whether there’s an additional fee for services.
  • Some run their business through a third-party broker-dealer, potentially leaving clients vulnerable in the event the relationship is severed. Others own their broker-dealer which offers more stability over the long run.
  • It’s also important to note that not all OIDs offer the same advisory solutions. It’s good to know which companies and solutions your IARs favor and research which companies and solutions are available on the particular platform you are considering.

RIAs considering the OID route must factor in their firm’s particular needs and DNA before deciding which platform best suits those needs.

It’s an important decision.

After all, the right OID partner can make all the difference when it comes to recruiting, retention, and growth.

Jeff Cusack. Credit: RetireOneJeff Cusack is the chief distribution officer at RetireOne, a company that can provide OID services.

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