Wholesaler Beefs Up RIA Tech Capability

A new partnership between Advisors Excel, a top insurance wholesaler, and a technology vendor is expected to improve the analytics capabilities of AE Wealth Management, a registered investment advisor owned by Advisors Excel.

The move is seen as a significant step for AE Wealth Management as it seeks to give its independent advisors sharper tools with which to manage client relationships and stay ahead of internet-based investment algorithms, or roboadvisors.

Advisors have to up their game in terms of their relationship management, Cody Foster, co-founder of Advisors Excel, told InsuranceNewsNet. “Look at the robos; and what we say is that being transactional is not an option anymore.”

Roboadvisors, which charge a fraction of what traditional advisors charge, are expected to make big market share gains in the near future. They are especially predicted to make inroads  among smaller accounts owned by younger investors at ease with technology for basic investment needs.

The partnership between AE Wealth Management and Orion Advisor Services, an investment portfolio account service provider in Omaha, Neb., is expected to bring better back-office reporting capabilities, billing and client statements.

Orion’s technology also will help AE Wealth Management’s advisors gain an integrated view of the wealth management, annuity and life insurance products serving clients, Advisors Excel said in a news release.

Orion’s customer relationship management platform will allow advisors to obtain current statistical information such as holdings and year-to-date returns, customized client statements and fee billing structures, Foster said.

Advisors also will be able to send videos to clients, Foster added.

Deal Falls Through, Unrelated to DOL Rule

The creation of AE Wealth Management was not related to the April release of the Department of Labor’s new fiduciary rule, Foster said.

Under the new rule setting standards for investment advisors, registered investment advisors are considered a “financial institution” and authorized to certify the sale of insurance and annuity products into retirement accounts.

Wholesalers - which are regulated differently from insurers, banks, broker/dealers and RIAs - were not granted financial institution status

One way for wholesalers to continue selling products such as fixed indexed annuities under the rule is to create or buy a registered investment advisor or broker/dealer.

Advisors Excel, which maintains “core relationships” with about 600 advisors and advisory firms, previously had been working through a Florida-based RIA.

When efforts to buy the firm fell through, Advisors Excel set up its own SEC-registered investment advisor several months ago, Foster said.

When Advisors Excel realized the deal with the Florida RIA wasn't going to happen, “the time came to build out our own RIA for advisors,” he said.

Wholesalers provide educational materials, marketing help and compliance advice to independent agents. The more insurance products an agent sells, the more the wholesaler also benefits.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].