Even though the conservative government announced in June that it is sticking to its election promise and will not allow banks to sell insurance at branches, the subject still sparked some of the most passionate and divergent opinions in this year’s Account Managers’ Report Card. Many account managers want to see these restrictions abandoned, but an almost equal number believe these boundaries are still needed.
Account managers at banks and credit unions are not allowed to refer customers directly to insurance advisors at insurance firms under the same corporate umbrella. Although account managers at most institutions are allowed to discuss insurance needs if their client broaches the subject, they are limited in their capacity to address those needs beyond identifying them, and then referring the client to an insurance agency.
“I want the ability to sell insurance,” says a Bank of Montreal account manager in Nova Scotia. “It’s getting harder to compete when insurance companies can offer bank accounts and we can’t even talk about insurance.”
“I’d like to be able at least to discuss insurance more openly with my clients,” adds a Royal Bank of Canada account manager in Ontario.
Although most banks and credit unions say account managers have to refer objectively and cannot favour their own institution over another, many account managers are still referring within their own companies — despite the rules regarding discussing and referring clients for insurance products.
“I just refer to a Vancity agent,” says a Vancity Credit Union account manager in British Columbia, who adds that the convenience of having both services in one company is something that most of her clients are looking for.
“I’m not really allowed to talk about it,” says a TD Canada Trust account manager in Ontario. “I just offer a list of companies to my clients, but TD is listed very prominently on that list.”
At BMO, the almost unanimous response from account managers as to who gets their referral business was “BMO Nesbitt Burns Inc.“
When asked about referring within his company, a Royal Bank account manager says: “I’m not allowed to. I provide a list of life insurance agencies in the area.”
Despite the apparent confusion regarding the dos and don’ts of insurance referrals, opinions on whether account managers should be allowed to offer insurance to their clients are deeply divided.
Some see the removal of this barrier as the next step toward providing their customers with the best service available. “I’d love to see us able to sell insurance,” says a Bank of Nova Scotia account manager on the East Coast.
“A more competitive setting in which we’re able to sell a larger array of products, such as insurance, will only help our clients meet their financial needs,” adds a CIBC account manager in Western Canada.
Meanwhile, account managers who oppose the marriage of banking and insurance had varying reasons, with some seeing the opportunity as a conflict of interest.
“I think it’s well in place right now. It keeps everyone honest,” says a BMO account manager in Ontario.
Other account managers also fear they will lack the expertise or will not be adequately trained to serve their clients’ insurance needs competently.
“It’s good the way it is right now. Offering insurance is very specialized, and I don’t believe that a general advisor should be selling it,” says a TD account manager in Ontario. “How much of that stuff could you know really well and not just superficially?”
The argument against also extends to account managers who are satisfied with their current product offering and simply have no wish to expand into insurance.
“I don’t want to sell insurance,” says a TD account manager in Ontario. “The Bank Act is fine. And if it ain’t broke, don’t fix it.”IE