A Michigan firm is combining an independent marketing organization (IMO) with emerging technology to offer financial advisors coaching, infrastructure and financing options surrounding  insurance and annuity distribution.

Detroit-based Signal Advisors officially announced its launch on Tuesday after several months in “stealth mode” working with a select number of advisor clients.

“I think advisors are missing the opportunities around insurance, for a couple of reasons,” said Patrick Kelly, CEO of Signal Advisors. “There’s an opportunity on the life insurance side for tax diversification that people who aren’t looking at insurance are missing altogether – in some cases insurance might be better than a Roth conversion. On the annuity side, annuities may help enhance the overall portfolio. Asset allocation is more of a commodity, people give that away for free. Being able to build and construct a plan that includes insurance and/or annuities has become a way to differentiate in the marketplace, because clients will not know how to do this on their own.”

Traditionally, IMOs act as distributors of annuities and insurance for independent advisors, serving as a go-between for advisors and insurance providers.

The hybrid insuretech and IMO consists of three pillars:

The current IMO structure is not able to serve advisors with the technology and support they need to effectively sell insurance and annuities, said Kelly.

“There’s part of the insurance industry that has been left behind when it comes to investing in technology, so we are trying to bring advisors who sell annuities and life insurance innovative technology,” said Jacob Cohen, Signal Advisors president. “We’re dead-focused on the independent advisor. There are those who think that roboadvisors offering investment solutions are the future and that independent advisors are going away, but people want real advice from real people in retirement, and need real solutions. Advisors need to be empowered by technology, not replaced.”

One of the more significant differences between Signal Advisors and other independent marketing organizations is that it does away with professional marketing consultants altogether in the form of a peer-to-peer approach. This eliminates one of the largest expenses that IMOs contend with – paying marketers to recruit new advisors and coach those new recruits on how to grow their practices.

According to Signal Advisors, marketer compensation can account for 20% to 50% of a traditional IMO’s expenses. Rather than rely on marketers for recruitment, the firm will rely on referrals from agents and advisors.

Instead of paying marketers to coach advisors, top-producing advisors in the industry will serve as coaches, and Signal will compensate them for their coaching efforts.

“A marketer might have 100 advisors that they’re working with,” said Kelly. “Our coaches will only work with 10-12 producers at a time, so advisors are going to get more personalized attention.Advisors need to operate and scale their business, not just sell insurance and annuities, so they need more personalized attention to allow them to do it.”

Kelly said that a top-producing advisor could conceivably double their net take home pay by spending one day each week coaching other advisors who want to grow.

According to Kelly, multiple gaps in advisor-facing insurance technology have made offering insurance inefficient, even as many other parts of the financial industry have accelerated their use of technology to drive scale and efficiency.

“The major thing that was obvious to me was that there was no end-to-end platform for an insurance producer,” said Kelly. “We’ve built a state-of-the-art platform for insurance sales that includes everything from tracing your marketing and return-on-investment automatically to having conversations and requesting annuity illustrations, to doing your submissions and seeing submissions become paid policy, and managing your in-force book of business.”

A case-design portal helps advisors answer prospective clients’ questions about policies and products, tracks advisor-client and advisor-prospect conversations and can even help them find an optimal policy for their client.

Signal’s new business dashboard shows an advisor every policy they’ve submitted, and where it is in the process between submission and becoming a policy. It also shows the advisor all of their policies in place, obviating the need to track such information on spreadsheets or word processing programs. Signal can then track all of the information around in-force policies including performance and policy management information.

Kelly added that with a single click, advisors will be able to produce a simple annual annuity review for their clients, completing what was once at least a 30–to-50 minute endeavor in moments.

Another efficiency-driving technology inclusion is “FireLight Embedded,” which places FireLight's e-signature and electronic forms application on Signal Advisors’ platform, creating a single-sign on experience upon a unified interface. Information entered on the firm’s platform can then be reused across an advisor’s technology, including within Salesforce’s customer relationship management software.

A marketing dashboard offers analytics displaying an advisor’s return-on-investment across different marketing channels and helps to funnel leads into the case design portal.

The platform also creates a paper trail for every recommendation, said Cohen, and future updates will include more robust compliance and suitability functionality.

Most of Signal’s technology is “net-new,” according to Kelly and has never been created for advisors before.

“That’s why we got into the IMO space, there were things that we felt like we could do that no one else was doing,” said Kelly.

The technology offering includes a proprietary commission management sofware that works in tandem with Signal’s commission advance program.

According to Signal Advisors, during Covid-19 advisors and insurance agents are waiting over 50% longer to receive commissions for the sales of annuities. The amount of time it take to be paid a commission has stretched from an average of 33 days immediately prior to Covid to 53 days between March 15 and July 31st. The delays were primarily due to back-ups in suitability queues, lack of digital workflows and funding delays.

Advisors rely on timely commissions to enable them to turn around and reinvest in marketing, and slower commissions mean that they aren’t able to conduct as much marketing this year, leading to a slowdown in new business.

“We find that most independent advisors are business owners dealing with a lot of capital constraint, and marketing is what drives their business,” said Kelly. “We have a line of credit that allows us to pay commissions within 24 hours of an application being submitted, as long as it's in good order. That offers advisors the time to keep filling the top of their marketing funnel,” allowing them to increase their marketing spend by approximately 33%.

The commission advance program is available to Signal Advisors users at no additional cost.

At launch, Signal will work with more than 30 insurance carriers, including American Equity, Fidelity and Guarantee, Allianz, Equitable and Guggenheim.

Signal Advisors was founded by a three-person partnership: Kelly, a financial advisor who has served with Northwestern Mutual as well as his family’s independent advisory firm, Kelly Capital Partners; Cohen, a 10-year veteran of several technology startups; and Chief Technology Officer Kevin O’Hara, who has served as chief technologist at several tech firms.

While Kelly describes most independent marketing organizations as “bootstrapped” businesses with two-to-three people conducting most of the work behind the scenes, Signal Advisors is backed by venture capital.

Kelly and Cohen declined to name the company’s investors, but mentioned they include firms and individuals interested in both tech start-ups and financial firms.