Insurance-related tools are or should be an important part of the wealth advisor's toolkit, and this firm has launched a new offering to cover that.

Wealth technology firm Envestnet has rolled out a program to make it easier for insurance solutions to be put into advisors’ toolkits.

The Envestnet Insurance Exchange is a program that integrates insurance solutions into the wealth management process on the Envestnet Platform. The firm unveiled the offering during its summit for advisors taking place in New Orleans this week. 

The exchange connects insurance carriers and account processing vendors with Envestnet clients, so that advisors can fit insurance into their offerings. The exchange serves financial institutions including bank wealth management, independent advisors, broker-dealers and Registered Investment Advisors, among others. It will offer fixed, fixed-indexed, variable, contingent-deferred, and private placement annuities with insurance carriers.

Envestnet said its exchange will be available through tools and features within the advisor portal of the Envestnet Platform later this year. Financial advisors will need an insurance license to introduce insurance products. For those advisors who are not licensed, Envestnet will be offering a service called Guidance Desk that will allow unlicensed RIAs access to the consulting and fiduciary services that would enable them to use the Insurance Exchange. This service is still in development, it said.

Among recent developments at Envestnet, see here.

The need for wealth advisors to put insurance offerings to clients as part of their range of solutions has been called for in a recent study. US families and individuals want their advisors to address property and casualty insurance and a large chunk would switch advisors if such help was offered – suggesting strong potential to plug this gap. The results came from a study of 200 “successful” US individuals and same number of advisors by Chubb, the insurance and risk management firm, and Oliver Wyman, the research and consultancy. The study found that more than three-quarters of HNW individuals surveyed want property and casualty insurance needs addressed by their advisors but only 28 of them said such persons do so. 

More broadly, and in several regions including North America, the wealth management “toolbox” has already seen development of what are called private placement life insurance policies in recent years. These are structures directed at wealthy individuals enabling them to create tax-efficient, arm’s length portfolios and are recognised in a number of jurisdictions. (Players in this field include Swiss Life, Vie and Lombard International Assurance.)