This letter is intended to address a few matters that were stated from a recently released report entitled, “The CCIR cooperative MGA-focused Thematic Review – Consolidated Observations Report”. This review was released in a handful of industry publications and led primarily by the Financial Services Regulatory Authority of Ontario (FSRAO).
Experior would like to commend our regulators and their pursuit for solutions to uphold the FTC (Fair Treatment of Consumers) initiative.
Our company’s mission statement is “Building financial foundations for families to empower them today and leave a legacy for tomorrow.” In other words, clients first and the FAIR TREATMENT OF CONSUMERS.
This, however, is contradictory to some of the statements about our recent FSRAO report as it relates specifically to Experior, which they released after an audit of an aggregated group that included Experior, along with two other MGAs. Unbeknownst to us, it was subsequently published in The Insurance Journal, Investment Executive and Financial Post, as well as others.
The Investment Executive did give Experior a call for comments before publication of this article. They called our head office at 2:51pm on September 28th, 2022, but the message didn’t get received until 5:16pm after we were done with some other meetings. Unfortunately, we missed the window of time to reply to them which was 5:00pm to share any comments before they announced the BIG NEWS!
For those who are not aware, Experior has been growing year after year at a steady and sustainable pace for almost 9 years.
Now, one big concern that came of the report was stated as follows:
What does Experior say to that?
Experior has been fortunate to attract agents from many walks of life. Most of whom were already licensed before joining Experior. Of the 1600+ licensed agents we currently have in Canada, fewer than 20% of them have less than 2 years’ experience (18% in Ontario which is our largest demographic), with the average tenure of an agent across Canada being 8 years. This also differs from another statement made about us “three” MGAs in one of these articles which said, “all MGAs had a high proportion of newly sponsored agents with less than two years of experience as licensed agents”
Another observation that was shared in the article was the following:
What was not specified is that Experior has never been reported, and only one agent in Experior’s history (a few years ago) was reported, and this individual had been through a few MGAs up to this point. It was dealt with quickly and thoroughly. For that reason, we ask you this; why was Experior included in this blanket statement? In addition, since the inception of Experior we have never had a claim with our Errors and Omissions Insurer. A report card that NO OTHER LARGE MGA CAN CLAIM.
The only similarity (outside of a traditional MGA) between these other two MGAs and Experior is a multi-tier compensation structure. However, they all drastically differ in terms of their recruiting practices, but also in their focus to provide choice and suitable options for their clients. This is one of the reasons why at Experior, we attract and retain agents with many more years of experience, despite Experior being the youngest of the MGAs in this audit.
Another comment Experior would like to clarify, about how “multiple agents are paid for a single sale”, not only applies to the three MGAs in the review, but also to most MGAs in Canada, which operate with AGAs. Using AGAs and giving them autonomy to grow is one way to incentivize agents to recruit. The large consolidator MGAs rarely do the direct recruiting any longer. Their AGAs typically are recruiting, and many of them have their own “home-grown” multi-tier commission structure they built into their model. I believe this is called multi-tier compensation by all MGAs in Canada. On a side note, Experior entered the USA market in 2019 and came to realize very quickly that every MGA in the USA is multi-tiered, but the carriers themselves pay the agents directly up to 15 levels.
The report fails to address a growing concern in our industry; who will be bringing in the new, young talent into the industry, should the stated three MGAs in the review stop recruiting? The report and subsequent articles paint a picture that this is somehow negative and destructive. In the 90’s, MGAs built their businesses primarily by attracting agents from career shops, and in the 2000’s and beyond, many have continued their success by attracting agents from the two biggest multi-tier structured companies in our business, which originated in the USA. The biggest MGAs, which could be called aggregators or consolidators, only get bigger by swallowing up smaller MGAs and AGAs. These two multi-tier companies were and continue to be feeder companies of agents to this flawed business plan of consolidation. The industry needs a way to recruit and attract a younger agent, as older agents slow down and retire. Bringing unlicensed people in and training them, supporting them, and encouraging them through the licensing course and beyond is like an apprenticeship. At Experior, our experience and research continue to show that a multi-tiered approach, being run compliantly, the way Experior continues to do so, has not only allowed for new, young talent to discover a wonderful career in our industry, but has also had a positive impact for our clients and for the Fair Treatment of Consumers initiative.
This report also spoke to the new agents not having proper training or mandatory meetings. Experior provides more training than any MGA in the industry to our knowledge. Our CEO, Jamie Prickett has personally sold for two of the largest MGAs in Canada prior to, and during the building of Experior, and there was no such thing as a mandatory training. This is an area that we are looking forward to implementing.
But as for training itself, every week we have product/carrier training for 2 hours with 1 or 2 carriers. Any agent who attends these live, are tracked and provided CE credits from the carriers. On average, in a year, an agent could expect to earn up to 80 CE Credits (as not all the sessions provide CE credits, or it would be closer to 100 hours). This also means over the course of 2 years, some of our agents are receiving over 150 CE credits, which is far more than the 30 that are required.
Jamie also runs a bi-weekly training sessions with our Executive Directors (top level management at Experior, who also offer additional oversight to their team of agents), with approximately 80-90 individuals in attendance, and we discuss field issues, compliance, training, and of course recognition, which we love to do.
In addition, they grouped us in this article alleging that the three MGAs don’t do Agent Surveys of business practice. The truth is that we do an annual review of every agent, and it needs to be attested to by their Executive Director. Also, an annual anti-money laundering attestation is required, otherwise commissions are held until the documents have been completed.
Corporately, a meeting is run every Monday by Jamie called CEO-tap. Although he doesn’t train on products, he certainly reiterates in almost every session the importance of putting families first. Experior is NOT a one trick pony, and we may not grow as fast as others, but we are here for the long haul and will not work with anyone who doesn’t share these values. Again… “Building financial foundations for families to empower them today and leave a legacy for tomorrow.”
The report had serious concerns about one MGA’s excessive recommendation of a sales concept called IRP (Insured Retirement Plan). The Insured retirement plan is a retirement tax planning strategy using life insurance. They allege the use of a complex product like Universal Life and this strategy is too complex for rookies to grasp, and we would all have to say we agree with that 100%. It is not a one size fit all solution.
We were required to share with FSRAO a breakdown of our revenue sources as a company, and the article stated the following:
The issue we have with this statement is that these numbers below are the actual L&H insurance gross income to Experior in 2021:
38% from Segregated Funds
27% from Term Life
33% from Permanent Insurance (with an approximate 50/50 mix of UL and various whole life products)
2% from Other (Mutual Funds and a handful of referral products)
As for oversight of sales, Experior has embraced technology to help increase compliance and suitability reviews. Whenever an agent makes a sale with Experior’s partner companies, we require them to upload all relevant documents to their Experior back-office and for our staff to review for accuracy a copy of the application/illustration, a copy of the reason why letter, a copy of the advisor disclosure form (which begs to question when the name of this document will change since life agents can no longer use the term advisor in Ontario), and an LIRD form, if applicable. From my experience, traditional MGAs do not require, nor review these documents. We do know that we have recruited agents from some large MGAs in the traditional model that were not aware of what a “Reason Why Letter” is or that they even existed, despite it being a regulatory requirement. This was designed by the CLHIA to develop a practice to promote a needs-based selling and sale suitability approach.
We also require agents to attest that they have done an FNA or needs assessment. Our most recent update to our back office even attaches this needs analysis to the client information so when a manager and admin reviews it, they can see that the correct product was sold to the client in keeping with the FTC.
We (the three MGAs included in the “study”) were required to sign a Non-Disclosure Agreement as each of our respective company’s data was shared with the other two companies. For that reason, we are not sharing their information, but we do hope this message makes it clear enough to the public that we are not in the same business as the other two MGAs. They run their sales, training, and recruitment their way, and we run it our way. The Experior way. We take pride in the tri-brid model we created which took the best from the three industry models:
Throughout this audit we learned that we could benefit by further expanding our compliance department and are currently seeking to hire new members to our compliance team. In addition, we will continue forward by doing an even better job with agent monitoring and implementing mandatory training throughout the year.
What we don’t accept with this recent news, is that we were painted with that same brush as the others. Our hope is that this information we share with the public will show that Experior is not the same as these other two MGAs, or any other MGA for that matter. That is not meant as a slap in anyone’s face, or to any of the great companies in our industry, but we certainly know where we stand. We believe this was not the intent of the articles written, but after much feedback from many friends and foes in the industry who read these articles, it was apparent that we had to raise our voice. We take this seriously, and we have a culture of training and support for all our agents to follow the Fair Treatment of Customers. We hold our agents to a high standard and feel this is why we have a team that recognizes the importance of putting the customer first. We have done this since the beginning, and we will continue to do this moving forward.
In conclusion, Experior is committed to continuously improving and getting better, for our clients, our staff, and agents. Our immediate steps will be to improve agent monitoring and implement mandatory training throughout the year. We will continue to comply with FSRA and all our regulators, to ensure Experior continues to far surpass what the minimum regulatory requirements may be, to always ensure The Fair Treatment of Customers.
Co-founder & CEO
Co-Founder & President
Director of Operations
Chief Experience Officer