The interim president of Independent Financial Marketing Group, Sun Life Financial’s U.S. third-party marketing subsidiary, says the company will continue aggressively adding bank and credit union clients as it hunts for new leadership.
Gary Corsi, the interim president of the Purchase, N.Y., company and a vice president and the chief financial officer of Sun Life Financial (US), the Toronto insurer’s U.S. subsidiary, said he hopes to increase the number of relationships and sales through the bank channel this year.
“When I look at the business that Independent Financial is in, I think we have just scratched the surface,” Mr. Corsi said. “I think as the compliance environment gets more demanding that will create more opportunities for us in this business. We have the benefits of scale that the banks we distribute through do not have. That is what we bring to the table.”
IFMG has been ranked as the largest third-party marketer in the bank channel for six consecutive years by Kenneth Kehrer Associates, a Princeton, N.J., consulting firm that tracks bank sales of insurance and investment products. The Sun Life unit had three times the revenue of its nearest competitor last year, according to the Kehrer firm, including $6.6 billion of annuity revenue.
Despite the strong results, the company announced July 12 that Robert L. Spadafora, its president and chief executive officer, had left, and Mr. Corsi said in an interview Friday that Mr. Spadafora’s “departure was initiated by the company.” He would give no further details.
Mr. Corsi, who has been on IFMG’s board of directors for two and a half years, said the search for a successor to Mr. Spadafora targets an executive who can help the company grow in compliance and technology, as well as “adding more value to our current clients to deepen our relationships.”
“We don’t want to put the company on hold while the search takes place,” he said, and added that IFMG is not in a rush to hire anyone.
“We are going to have someone in place when we find the right person,” he said. “Fortunately, there is considerable depth in our management team, and the company has not skipped a beat. Things are moving forward. The key for us is finding the right person, not any sort of timeline.”
Dick Ayotte, the president of American Brokerage Consultants, a St. Petersburg, Fla., company that tracks third-party marketers, said IFMG has a lot of growth opportunities.
“IFMG is not one of the largest third-party marketers in terms of the number of banks it is partnered with, but they happen to have a lot of partnerships with of a lot of the largest banks,” Mr. Ayotte said. “They have partnered with the large banks, and they have been very productive, and that makes them No. 1 in terms of product sales.”
Annual research done by American Brokerage Consultants shows IFMG in partnerships with 41 banks as of mid-2004, and 28 of the 41 had more than $1 billion of assets. The company said IFMG had 37 bank partners in 2003, of which 25 had more than $1 billion of assets, up one in each category from 2002.
“IFMG has found a niche with the large banks and ha[s] developed significant product sales in that channel,” he said.
In the past 18 months, IFMG says, it has expanded upon eight existing relationships and added 11 bank or credit union relationships.
Mr. Corsi said more partnerships are in the pipeline. There is no plan to change a strategy that has been so successful, he said.
“IFMG works best because it has a fair degree of independence,” Mr. Corsi said. “Sun Life has 100% ownership. However, IFMG needs its independence to work as well as it has. We won’t change that.”
Analysts said that, despite IFMG’s success, they would not be surprised to see Sun Life use its executive search as an opportunity to change the subsidiary’s direction.
“Bringing on someone with a different strategic direction wouldn’t shock me,” said Paul Werlin, the president of Human Capital Resources. “When you look at what has happened at other third-party marketers, and the way that they have closed the gap, IFMG may try to change its direction. It might not be a radical shift, but things could shift.”
Mr. Werlin said it is unusual to see third-party marketers change their senior management.
“There has not been substantial turnover at the senior level at third-party marketers for many years,” he said. “It is critically important for a third-party manager to have stability at the top. Part of the decision-making process is stability and soundness. It is certainly unusual for a senior manager or a president to be let go by the parent.”
Mr. Ayotte said IFMG has been successful because it has always done things its own way. He said that, unlike other such companies, IFMG has focused on platform sales. It has worked with banks to license and register hundreds of bank employees to sell annuities and mutual funds, he said.
“Most third-party marketers don’t attack the platform nearly as aggressively as IFMG has, and that has really paid off for them,” he said.
Mr. Corsi said he expects IFMG to continue developing share and revenues. He knows this will be tougher since the yield curve has shifted, he said, but he expects the company to be able to maintain dominance.
“We are going to take a national approach for continuing our growth,” he said. “There are opportunities for us across the country.”
