Today's Viewpoint: A MarshBerry Publication

In a recent Today’s ViewPoint entitled “Opportunities Abound for Insurance Brokers Expanding Into Wealth Advisory,” there were several reasons outlined on why a retail insurance brokerage firm may want to consider expanding into the Registered Investment Advisors (RIA), retirement planning and wealth management spaces.

The entry point and pathway may differ from one brokerage firm to the next based on existing client base and business composition, amongst other factors, but opportunities for business expansion are available across the industry.

For instance, if you are a brokerage business with an employee benefits (EB) operation, developing a retirement planning capability may be a great place to start since defined contribution plans are considered part of the overall EB package. For those brokerage firms with existing retirement planning services capabilities, expanding into wealth management may be the natural business progression. In either instance, the broker is positioned to leverage their current role as trusted advisor responsible for protecting and safekeeping the most valuable assets of the business or individual.

In addition, this type of business expansion has the potential to provide firms with new revenue channels, enhanced business diversification, and a more holistic offering to customers. These then result in increased revenue, high customer retention rates, and expanded wallet share, which translates to a fundamentally more valuable and desirable business.

But what is the best way to get started? Depending on your unique goals, timeline and financial resources three options include: Partner, Acquire or Build.


Partnering with existing retirement and wealth advisor firms is often the easiest and least capital-intensive pathway for an insurance brokerage firm to break into the financial advisory sector. Benefits can include immediate entry into the space, allowing brokers to test the waters, explore customer appetite for these services, and refine their unique service offering and business pitch. Once the results from a partnership are proven, owners can reassess whether building or acquiring a retirement planning or wealth management business is necessary to achieving their goals.

As with any partnership, there must be buy-in and commitment from the leadership of both organizations to ensure success. At the onset, this can be accomplished through a business plan that establishes project goals and timelines. The business plan should also address project resourcing and ownership; sales and marketing support and budgets; and financial incentives for key players.

While partnering does not require up-front capital, there are financial implications that need to be considered. Since revenue will be shared between the parties, the revenue build-up resulting from a partnership can be slow to materialize, particularly in the RIA space where revenue is largely driven by assets under management.


Acquiring a retirement planning business provides for in-house capabilities on day one while ensuring the acquirer receives 100% of the business revenue and cash flow. By leveraging the brands, relationships, and resources of both firms, the businesses can more aggressively cross-sell services. The firm gains immediate scale, cuts down on expenses needed to establish a market presence, expands the customer base, and gets access to tested business process and technologies that can be expensive to develop in-house.

In the current tight labor market, acquiring brings a pool of talented employees and advisors to your firm immediately, which bypasses the time-consuming hiring process. These employees also have proven track records, decreasing the risk of hiring workers that fail to produce or integrate.

That said, the acquisition model does have certain disadvantages. The cash investment made by the broker to acquire the retirement planning or wealth management business can be meaningful. In addition, the risk that the acquired business does not generate the expected growth or retention can have material financial consequences for the buyer. And while both insurance brokerage and RIA businesses share sales and service heavy operational models, there is always the possibility that the business cultures are misaligned. Some of this risk can be mitigated by conducting thorough due diligence pre-acquisition as well as having well-constructed business and integration plans with milestones and accountability.


Building a retirement planning or wealth management business internally may be easier now than ever thanks to the widespread availability of third-party programs for RPAs[LB1] , RIAs and wealth advisors known officially as Turnkey Asset Management Platforms (TAMPs). These providers offer technology, back-office support, and tasks such as investment research and asset allocation and can help a broker stand up a new business relatively quickly and without a large upfront cash outlay, although the fees can be high.

In these instances, business leaders still need to have effective sales execution strategies and capabilities in place as TAMPs do not provide the roadmap or execution capabilities to achieve desired growth goals. This model has proven most effective for those advisors with an established customer base who seek a new home.

Relative to the other pathways into this business, building an internal advisory capability is the slowest to scale which can be highly costly for the broker making the investment. The break-even on a build strategy can be significantly longer than in a buy or partner scenario. When combined with the potential for losses due to lack of experience and organizational knowledge, the build strategy is most risky and can consume a disproportionate amount of leadership time and attention diverting management from executing on their core insurance brokerage business.

There are significant reasons that an insurance brokerage firm may want to explore expansion into the financial advisory market and there a variety of ways of going about do so. To achieve the highest levels of success, business leaders should be thoughtful and deliberate in their approach to ensure customer, leadership, and shareholder alignment.

If you have questions about Today’s ViewPoint, or would like to learn more about how MarshBerry can help you determine if you should partner, acquire or build a wealth management portfolio, please email or call Kim Kovalski, Managing Director, at 440.769.0322.

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 [LB1]What are RPAs