Banks need to rethink bancassurance model says IOOF
IOOF is encouraging the major banks to consider strategic partnerships rather than wealth management ownership, following its recent acquisition of ANZ’s wealth management business.
IOOF group general manager, Wealth Management, Renato Mota has said that when the bancassurance model was being pursued by the banks, product was king but the bancassurance model had not lived up to expectations.
He said that, ultimately, the banks appeared to have decided that the vertically-integrated bancassurance model was not worth maintaining, consider the higher costs associated with a tightening regulatory environment.
“The fact that banks are now deciding to enter strategic partnerships, represents an evolutionary shift in the bancassurance model from manufacturing to distribution. This should lead to superior outcomes for clients, with the benefits that come with specialisation and best of breed solutions,” Mota said.
“The recent ANZ sale of some of its wealth management business to IOOF also included a 20-year strategic alliance with ANZ for IOOF to distribute wealth products through ANZ’s Australian banking network. This arrangement aptly reflects the ‘new generation’ model of bancassurance that is emerging in Australia and overseas,” he said.
Mota said ultimate success came from delivering outcomes to clients that were customised to their needs – irrespective of the manufacturer or origination.
He said it was a case of instituting a model within which the product and the business process were fitted around the client, rather than trying to fit clients around particular products.
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