Highland Capital Brokerage’s Latest Acquisition Expansion Moves Show How Insurance and Annuity Products Fit into Financial Advisors’ Toolkits
A holistic financial advisor must offer insurance planning at a level meeting clients’ sophistication and expectations – a fact as intimidating as it is true. The complexities of insurance solutions remain outside the comfort zone of many stock-and-bond focused advisors.
That’s where Highland Capital Brokerage enters the picture – with life insurance and annuity solutions to empower advisors’ financial planning – and now Highland is expanding their footprint and digital capabilities with new acquisitions.
Highland, a subsidiary of Advisor Group, recently acquired Hallett Financial Group, the Minneapolis-based independent insurance brokerage agency and Quotacy, an insuretech firm providing online access to term life, whole life and disability products.
We caught up with Jim Gelder, Highland’s CEO, for a glimpse into the life, annuity and long-term care insurance space and its role in the wealth management industry.
WSR: What do you believe will be the top defining trends of the life insurance distribution space for this year, especially regarding products that will be more in demand?
Gelder: As the baby boomers give way to Gen X, millennials and Gen Z, advisors must meet their customers where they are, and these generations tend to look digital first. Brokerage general agencies (BGAs) and the advisors we serve must keep pace not just with advisors’ new digital capabilities, but with the expanding expectations of their end consumers.
Likewise, BGAs will continue to look for ways to assist non-traditional insurance distributors with customer acquisition strategies to help advisors connect with their marketplace. Digital tools and tactics will be a cornerstone of these strategies.
In terms of products, those built on a variable life chassis will continue to grow in number and design uniqueness, and linked products for longevity planning will also become more important.
WSR: Do you believe M&A consolidation trends across the insurance space will remain the same, diminish or accelerate, and why? And why is Highland well-positioned to grow and succeed in today’s industry landscape?
Gelder: Our industry is in a time of transition, with multiple factors changing the landscape. Traditional insurance distribution is giving way to non-traditional insurance advisors as the main distributors of products. This is coupled with more stringent compliance and IT security measures from the firms these advisors represent.
Additionally, the end consumer’s changing expectations are driving innovation in the overall purchase and ownership journey. Add a pandemic to accelerate the expectation curve and you have a very dynamic industry in a short period of time. Organizations ill-equipped to transition their enterprise – whether due to lack of competence or capital – will be pushed towards consolidation.
Highland is a stand-alone distribution company with amazing operating infrastructure and technology that allows us to expand and scale as opportunities present themselves, positioning us very well to succeed in this changing environment.
Our core business model focuses on assisting non-traditional advisors with the distribution of insurance, including the rigorous management of compliance and security protocols. We are also well-capitalized and poised for growth through our parent company, Advisor Group.
WSR: Describe Highland’s typical sweet spot financial advisor and the clients they serve – How do you stand out in helping advisors grow their businesses on the insurance front?
Gelder: Historically, Highland focused on helping advisors serve emerging affluent to ultra-high net worth clients with their risk management needs through life, annuity and long-term care solutions. We can support a wide array of advisor capabilities and position ourselves as the product expert on behalf of our partnering advisors, assisting through the entire sales process, whether virtually or in person.
In addition to our sales teams, our support staff and IT resources enable us to meet the needs of the B2B organizations with whom we partner. Our digital platforms also enable advisors to experience streamlined and easy transactions and provide B2B2C resources and direct-to-consumer options to assist in connecting with their customers.
WSR: Given all the chatter about likely interest rate hikes happening this year, what impact would a higher interest rate environment have on income and asset protection solutions like annuity products, and how is Highland helping financial advisors and their clients get ahead of potential interest rate changes?
Gelder: An increase in interest rates will help carriers improve the pricing of life and annuity products, an obvious benefit to the industry. Highland always strives to be transparent and proactive in our communications with advisors. One way we do this is providing real-time updates on carriers and products to ensure the most appropriate solution for each client.
WSR: Any words of advice for financial advisors who haven’t been that engaged or active with insurance solutions for their clients – Why should they be prioritizing insurance solutions for clients this year and beyond?
Gelder: Risk management and use of insurance and annuity products should be part of every financial advisor’s dialog with customers. If the financial advisor isn’t having these conversations with clients, someone else will. Providing these services not only protects assets under management but also improves stickiness with existing and next-generation relationships.
Julius Buchanan, Contributing Editor at Wealth Solutions Report, can be reached at firstname.lastname@example.org