Tower’s refocus on risk a Pivotal move

This year has been an arduous one for theTowergroup, with fiscal and directional woes resulting in numerous high level departures, staff cuts and a strategy make over.

The recent restructure and relaunch of the Tower-owned Pivotal dealer group was one of the steps taken in refocusing the life insurance business on the risk market and related investments, in line with the overall shifting Tower strategy. The ultimatum for the dealer group was that if it was to stay in the Tower stable, it must meet the group’s strategic objective — thus the renewed focus on risk-based support for risk-based advisers.

Tower Australia head of sales Stephen Robertson was originally charged with the redirection of Pivotal, which saw him appoint former Royal & Sun Alliance general manager sales and marketing Ken Brewer to head up the dealer group.

Following the relaunch, Brewer and Robertson are confident the future will be bright for the now specialist dealership.

“We believe there is a very strong opportunity for somebody to really grab that risk space — at the moment there’s not one dealer group out there that does pure risk really well. Our aim is to be a market champion in that arena,” Robertson says.

Tower Australia chief executive Jim Minto says this is the group’s key strength, and the aim is to position the life business squarely with those advisers who wish to specialise in that market. “Pivotal will be very attractive to such advisers,” Minto says.

One of Brewer and Robertson’s long-term goals for the group is to move away from the perception that risk means low quality.

According to the pair, “getting the risk part of your financial planning under control is least sexy, but most interesting”.

An added advantage for advisers on the risk side, Robertson says, is that they have the chance to get in early and possibly keep that client for life.

The belief within the dealer group is that the number of advisers who want to specialise in risk will only increase, and the focus now is to attract the best of them.

“[Pivotal] is not just a home for lifeys, we’re quite adamant about what we want.”

Brewer says that if you want to make the Pivotal grade, you will need to be an educated and compliant business person, with DFP 4 under your belt, but he adds, “We’re not worried about Certified Financial Planner requirements — it’s irrelevant.

“A lot of these old lifeys, while not good at financial planning, are great at risk.”

But while the primary focus is on superannuation and risk products, Pivotal advisers are also able to access platforms and planning support.

Pivotal advisers are provided with specialist risk, superannuation technical and sales support, as well as a variety of approved products and services across those investment platforms.

The dealer group has two main investment platforms — theBeaconinvestment platform (badgedAvanteos) for investments, and the ARC asset allocation and corporate super fund (out of Tower Australia).

Technical services are kept in-house, with head of risk and technical services Paul Stewart providing support for Pivotal-based advisers.

“We want to keep the technical services in the dealer group rather than leaving it with the manufacturer, so it’s not just flogging the manufacturer’s product but finding the best solution for the adviser,” Brewer says.

“We also believe compliance is paramount in running the dealership, and one of Paul’s roles is to provide that support on the technical side.”

The group is also currently looking for a person to fill a similar role on the super side.

Making the group attractive to advisers is a leads management program, generated through the Tower call centre, which identifies leads geographically and allocates them to advisers across Australia. Pivotal also has agreements with the other Tower-owned financial planning groups — FSP andBridges— to refer advisers and planners between the three.

The relaunch has seen changes made to recognition programs and remuneration packages, including ‘the founders club’, with those signing up before the end of this month receiving benefits such as the first month free of any payment, a rebate for sale of Tower products, access to the Pivotal conference and a recruitment bonus — which will pay advisers who refer others who sign up.

However, if you decide to join Pivotal, you may need to take out your own professional indemnity (PI) cover, or make the choice to be self-insured, as the group’s PI currently only covers the risk of claims against Pivotal by third parties. However, the group is exploring the possibility of a pooled arrangement to cover the excess for advisers with a PI insurance provider.

The group is also looking at increasing its current ‘buyer of last resort’ offering of three times recurring income if sold to Tower, and 2.5 times if sold to others on the recommended list.

But for Brewer, the focus is definitely on retaining and attracting planners.

“We’re in the business of growing and we want advisers to come along for that journey,” he says.

Vital Statistics: Pivotal

No. of advisers:55

Ownership:Tower

Location:National

Key Personnel:Executive manager - Ken Brewer; Risk specialist - Paul Stewart; Operations manager - Mark Baldwin

Research:Assirt, van Eyk

Master trust/wrap service:ARC, Beacon