Morgan Stanley has begun offering its wealth management clients property and casualty insurance through a referral partnership with HUB International, Marsh Private Client Services and Willis Towers Watson. The wirehouse’s financial advisors have been referring their wealthy clients to insurance brokers at these companies since June.
Joseph Toledano, head of insured solutions in Morgan Stanley Wealth Management’s investment solutions group, told WealthManagement.com that the wirehouse went live with the referral arrangement through a portal on its broker dashboard, known as 3D, on June 22.
Each of the firms is represented by more than 100 property and casualty insurance brokers across the country, he said.
Toledano said that the rise of international cybercrime and the increased frequency of national disasters like fires, hurricanes and other tropical storms were the primary drivers behind the move. But he also noted that part of the rationale for sourcing the insurance through third parties as opposed to doing it in-house was to more quickly and effectively provide a “one-stop-shop” experience for clients’ financial needs.
Helping clients get a clearer measure of their liabilities, he added, will give them more confidence to invest in longer-dated securities, which Morgan Stanley offers through its advisors.
“If an advisor knows that a client’s risks – like a second home, a boat, or a fine art collection—are effectively hedged, that their liabilities are taken care of, financial advisors can be more aggressive” in recommending products such as 10-year CDs, which “have a liquidity premium—you’re going to get a higher guaranteed rate if you invest in a 10-year CD than if you invest in a 3-year,” he said.
To use the new feature, an advisor has their wealth management client on the phone, and he or she clicks on a hyperlink within 3D, then hands off the client to the insurance broker. Clients can sign up for insurance over the phone, get policy reviews, receive instructions on what to do to protect their homes and assets from natural disaster threats, and get their claims processed online, among other things.
In exchange for the referral, Morgan Stanley pockets a small commission, which is paid by the insurance broker, not the client, Toledano said.
Morgan Stanley has no underlying goal for how many referrals it wants to make on an annual basis, he added. The point of doing the referrals is primarily about making insurance easier to obtain.
