Nick Simone is the industry’s outsider. The relatively new president of Qualified Financial Services (QFS) Inc. doesn’t have a background working inside of a managing general agency but he’s had the opportunity to observe many of them in action.
Before buying into his new role (Simone joined the firm in April 2011), he worked as a wholesaler of sorts, as president of Walton Capital Management, which sells real estate products, primarily through MGA-affiliated brokers. Before that, he operated his own consulting firm which helped large companies expand and manage their growth.
This combination of experience is coming together in an interesting way in his new role as part owner and president.
He says having an outside view of the industry gives him a unique perspective on things. “It’s not in my nature or Kevin’s nature (Kevin Cott is the QFS CEO) to keep doing things the same way just because they’re working,” he says, adding that such reasoning can become a bit of a trap. “It’s great that things are working, but I’m always thinking that things can be better. There are things that can make the organization better. I think I can add a lot of value here because I’m not your traditional thinker.”
At a glance, QFS is almost a throwback to the career-shop days where advisors are mentored. There is also a certain level of enthusiasm which only seems to come with active sales force cultivation.
Advisors are sales-oriented, but they’re specialists or have access to specialists which allows them to show a level of expertise that isn’t always present in such a sales-driven atmosphere.
Mr. Cott is a notably hands-on figure as well, who’s been known to personally mentor many of the firm’s best advisors.
“We have some huge success cases with advisors who have come to QFS. They were just average advisors but after working with Kevin, Don (Don Hart is executive vice president, brokerage development) and David (David Spector is director of wealth management), they have really become the best in the industry.”
Here’s the challenge: QFS completed the acquisition of Ontario-based Marketing Concepts Group in June 2011, effectively doubling the firm’s advisor force. QFS office staff has also doubled in size to handle the new business. Although this is a positive development for the firm, the question is whether or not Mr. Cott and Mr. Simone will be able to institutionalize such mentorship so it can be scaled across a much larger workforce.
There are other challenges too that Mr. Simone says he’s noticed about the MGA channel in general, which almost any MGA manager will recognize.
First, he says, one of the biggest challenges is dealing with advisors who are constantly looking for a better compensation structure and fielding those who travel from one MGA to the next, looking for a higher payout.
“We tell advisors, right from the beginning, that we don’t give the highest comps. We’re very competitive but we don’t give the highest comps. Instead, we’re going to give them proper service and help them grow their business,” he says.
To that end, the firm holds new broker training sessions every Tuesday which, he says, are suitable for relatively seasoned pros and rookies alike. The firm also makes new business and field specialists available to its sales force to help with special cases and advanced planning. He adds that the brokerage services administrative team will go out of their way to help with quotes, illustrations and comparisons.
“We provide those resources. That’s the difference.” In the office too, he says “we pay above industry standards to our staff and we have very little turnover. We create an environment where they want to work with the advisors.”
To maintain the mentorship atmosphere established when the firm was smaller, Mr. Cott has established broker study groups to discuss business, sales techniques and professional development.
Compliance, meanwhile, is another growing issue that MGA managers will recognize and identify with.
The profession’s reputation is a challenge Mr. Simone says the MGA channel is still grappling with. Although he commends the work Advocis and CAILBA have done to advance the profession, he says insurance salespeople are still not always held in the highest regard by members of the public.
“We’re really trying to change that. Our advisors are top professionals. They’re not out there to force a $30/month term policy on you,” he says. “I think the industry has come a long way in the past 10 years or so, but there was still a negative connotation about insurance sales people. I believe that organizations like Advocis and CAILBA have done a tremendous, tremendous job in changing that perception.”
Finally, he says MGA owners are aging. His solution to that “problem” though, is to look at more acquisition opportunities for the firm: “We believe that we’re well-positioned to acquire some of those smaller firms that are simply not interested (in compliance, etc.) or that have lost their focus or enthusiasm.”
As for maintaining the firm’s culture and enthusiasm for the business, he says the executive team continues to be motivated by and focused on its advisor force. He adds that the effort to separate itself from other firms is conscious and ongoing. “We talk about that almost daily, even with the service and admin staff.”
Training opportunities (certification and accredited courses) and a concerted effort to bring the traditionally isolated independent advisor into the fold and make him or her feel like part of the larger organization is all part of that effort.
“It’s a culture that I’m strengthening. QFS was pretty good at it but I’ll be putting more emphasis on it,” he says.
“I think that we’re showing leadership,” he adds. “Is it a form of recruiting?” Sure, he says. “We hope good advisors come our way. We’d love to see that but that’s not our reason. We’re just trying to make people better at what they do.”