Farmers Financial Solutions is arming its newly licensed and trained agents with an online tool to help them sell more investment products.
The Los Angeles unit of Farmers Insurance Group, the nation's third-largest seller of property and casualty insurance, has hired a software provider called Cofiniti to develop the sales system, which when fully operational will help its agents tailor investment products to each customer's financial profile.
Brian Cohen, president of Farmers Financial Solutions, said the Web system will help Farmers leverage its relationships with middle-income clients - the type of people increasingly ignored by higher-end brokers such as Merrill Lynch and Charles Schwab & Co.
"Big brokerages are all transaction-oriented, and they only want big elephants," Mr. Cohen said, noting that many refuse to take people who have less than $100,000 of investable assets. That will open the field for Farmer's agents, he said.
Don Steele, chief executive officer of Cofiniti, in Austin, Tex., said his company's technology incorporates asset allocation models, risk assessment, and product information to help agents recommend funds or annuities that complement a client's assets, and to help agent and client alike sort through the multitude of investment products available through Farmers.
Clients can enter their financial information in face-to-face meetings with Farmers agents - it has 15,000 in 29 states - or enter it themselves and consult with agents from their own computers.
New agents will be severely restricted in what they are allowed to sell to their customers until they make 10 funds sales or sell more than $100,000 worth of funds. Mr. Cohen stressed that Farmers agents are not licensed to give investment advice and that the company has no plans to move in that direction. The registered reps - which the company expects to number 6,000 by yearend - depend on commissions for their livelihood.
Todd Eyler, an analyst at Forrester Research, of Cambridge, Mass., said Farmers' identity as a property and casualty insurance company may work against it in investment sales. Policyholders associate sellers of this insurance with unhappy events and hence may be less apt to use them to handle their investable assets, he said. "They're in the bad-news business."
Mr. Cohen sees this agent-client relationship in a different light, and so do Farmers' clients, he said: The agents "get their customers' lives back to order" after difficult events.