IFS Financial Services Inc. is planning its first foray into selling life insurance through banks this summer and is also aiming to boost its bank mutual fund sales.
The Cincinnati subsidiary of Western-Southern Life Assurance Co. is preparing an estate planning product aimed at the elderly and will also offer to distribute banks mutual funds in return for those banks selling the companys Touchstone funds, said Jill McGruder, president and chief executive officer of IFS Financial.
The estate tax program called estate builder is designed to avert some of the problems that many banks have had in recent efforts to sell life insurance, she said.
Customers past retirement age who have much of their income tied up in annuities are the market for estate builder, Ms. McGruder said.
Among the chief problems that banks in particular, bank platform reps have had in selling life insurance are the mental discomfort produced by asking medical questions and the possibility that an applicant can be rejected even after a sale is made.
For this product, IFS plans to give platform reps a screening method that would ideally eliminate from consideration (before a sales pitch is made) those who would be rejected in the end, anyway, Ms. McGruder said. A few conversational questions will make up most of the screening process, she said.
Ideally, the rep will not even bring up a potential life insurance sale until he or she has some idea of whether the customer would qualify, Ms. McGruder said.
A bank rep should be able to screen a client before it gets to the medical stage, she said.
In addition to finding out whether a potential client is healthy enough for the program, bank reps will examine prospects retirement assets, Ms. McGruder said. The key determinant is to be whether the client has more than enough retirement assets in other investments, she said.
In fact, bank reps will not target customers with any particular amount of assets, she said. We have to take the fear out of the sales process, she said.
Two banking companies, Compass Bancshares in Birmingham, Ala., and BB&T Corp. in Winston-Salem, N.C., have agreed to test the program, Ms. McGruder said.
The other project is an effort to form partnerships with selected banking companies to both sell Touchstone funds and distribute the banks funds, she said.
Touchstones sales through banks have been relatively small, Ms. McGruder said. Excluding sales through third-party marketing brokers, 2001 fund sales directly through banks were less than $10 million, she said.
Ms. McGruder said that the companys 12 dedicated bank wholesalers will target companies that have style gaps in their fund offerings that IFS could fill with Touchstone funds. These banking companies could then private-label the Touchstone funds they want.
But IFS will also offer to wholesale these companies funds through other intermediaries, she said. Since few banks are skilled at selling their funds outside their own footprint, Ms. McGruder said, this strategy should attract banks. She declined to specify IFS sales goals.
Kenneth Kehrer, the president of the Kenneth Kehrer Associates consulting firm in Princeton, N.J., said that sales of many kinds of life insurance have been declining for years. Among the best opportunities for banks are to sell either to customers who are missed by life insurance agents or to target the wealthy for estate planning purposes, he said. Some banks are making inroads by using their platform reps to sell life insurance, he said.
Weve become a nation worried about outliving our money, rather than dying too soon, he said.
