I got a right to go to work but there's no work here to be found.
Yes and they say we're gonna have to pay what's owed.
We're gonna have to reap from some seed that's been sowed.
--- Dire Straits, Telegraph Road
Canadian banks dominate the sectors they enter.
- Trust companies? Gobble, gobble.
- Investment dealers? Gobble, gobble.
- Mutual fund distribution? Gobble, gobble.
- Mortgage loans? Gobble, gobble
Is insurance next?
Banks can't sell or promote insurance in their branches. Four months ago, the Office of the Superintendent of Financial Institutions (OSFI) ruled that a website isn't a branch. So banks can sell/promote online. Banks quickly integrated insurance into their main bank websites. This week, OSFI's boss, Finance Minister Jim Flaherty said banks can't market or sell online. What this means isn't clear. This reversal shows the power of insurance advisors in lobbying their local politicians.
Banks already play a key part in the insurance world. They own insurance companies. They sell insurance products from various companies. They have insurance offices close to bank branches.
What Do You Think of Banks?According to research released by advisors, 59% of Canadians are "concerned about banks becoming bigger if they are allowed to expand into other businesses such as selling life and health insurance from their branches." This study ignores the Internet.
According to research just released by the banks, 77% of Canadians have a favourable impression of banks because "they receive good, personal service, have no problems with their bank and that their bank is there for its customers’ needs".
Do the findings surprise you?
What If ...Let's suppose banks can sell and market insurance online in the near future. How can small independent advisors survive?
Would consumers really buy insurance online? Maybe not, but that's not the point. We research online. Maybe you'd buy from the place that educated you.
Look at all the industries battered by the Internet, mega competitors and changing consumer tastes
- Home Depot vs small hardware stores
- Superstores vs small grocery stores
- Best Buy and Future Shop vs small home entertainment stores
- Wal-Mart Supercenters vs department stores and grocery stores
Consumers picked the winners with their wallets.
To protect small operators, big stores could not open on Sunday or the day after Christmas. Consumers spoke and the laws changed. Big means mass market, which leaves many unserved niches waiting for you.
A Simple Idea
Here's a simple idea: fish where the fish are. Since consumers look for insurance online, get online too. This is easy and inexpensive. With a good website, you will attract traffic. As a minimum, you must show up on search engines. You'll find earlier posts help make you easy to find and credible.
- create your web presence in three easy (and nearly free) steps: LinkedIn, web address, website or blog
- send a monthly eNewsletter to stay in continuous contact with your clients and prospects
- follow the three tips to keep financially solvent: predict the unthinkable, follow high standards and forget bailouts
You can't tell the future but you can plant and nurture the seeds of your success. You've always got competition but you can adapt. No matter what happens.
- The effect of banks selling insurance online
- What Canadians think about their banks (Canadian Bankers Association, Oct 2009 | PDF)
- Canadians' views of banks and life & health insurance (Advocis, Dec 2005 | PDF)