Gary Mandel, president of Independent Financial Concepts Group (IFCG), a Toronto based MGA, has had a long-time relationship with Dundee, which is about to end. "I am leaving Dundee. Our office will be leaving Dundee." About 20 of his advisors deal with both IFCG and Dundee.
He says as part of an arrangement with Dundee, the insurance advisors that he has recruited, trained and housed put their mutual funds business through Dundee. Mr. Mandel said he received a heads up from Dundee in August that they were going to implement this policy, but figured he had some time ahead of him and had not informed his advisors by early September when the memo was sent out. So he learned of its distribution from an advisor. "I didn’t know the memo was going out September 9th. It would have been nice to know that."
Dundee used to be IFCG’s business partner, he said, and "Now, they’re trying to take away our advisors!"
He says this move flies in the face of advisor independence. "That’s like the career system," he added. "We don’t want to be told what to do. We don’t want those handcuffs."
He also doesn’t think mandating that advisors place business through Dundee Insurance Agency Ltd (DIAL) makes any sense. "You are going to force advisors to put insurance business through you? Don’t you have to earn it? At IFCG, we earn their business."
He says he knows Dundee had compliance concerns, but figures there must have been a better way to do this. "The people from Cartier Partners (an MGA bought by Dundee) were business entrepreneurs. They wouldn’t have done this."
Moving to another dealer will be a time-consuming process since an advisor must ask each client to switch dealers, a requirement that came into effect a couple of years ago. "It’s a huge undertaking." And, there is the possibility that some clients will not agree with the move and Dundee will inherit those clients, he adds.
Mr. Mandel said one of his advisors had recently moved all of his funds business to Dundee and now he has to re-contact and re-paper all these clients to move the business somewhere else.
On the bright side, Mr. Mandel says he is enthused by the prospect of working with another dealer. IFCG is looking for a dealer who is also a manufacturer of products, as opposed to being only a distributor of products like Dundee.
He figures the dealers who are also manufacturers will be unlikely to try "stealing" his advisors.