Financial product platform CAIS entered a partnership with wealth advisory firm Robert Schechter and Associates LLC to launch an “insurance consulting service.” CAIS offers access to products like alternative investments and structured products. The portal-like feature will help advisors using CAIS to turn around and work with Schechter to pare down and identify the best insurance offerings for their clients, according to the announcement.
The move comes just months after Envestnet, which has an integration with CAIS, launched its insurance portal, called Insurance Exchange. In fact, Envestnet’s co-founder, Bill Crager, has floated the idea of launching its own alternatives portal in the future with alts platform firms CAIS and iCapital Network.
CAIS founder and CEO Matt Brown denied that the move represented anything other than a complementary offering to Envestnet’s Insurance Exchange. Envestnet declined to comment.
Brown said CAIS’ was a more sophisticated approach than many of the platforms already out in the marketplace. “Anyone can open up a platform and have a bunch of products slapped up there and frankly we’ve seen a lot of folks do it,” said Brown. “Not many are successful. And the reason that they’re not that successful is because they’re missing an enormous first step, which is really the review or solutions-design prior to utilizing a broad menu of products for a specific outcome.”
The feature, which advisors can access as a stand-alone or packaged offering, doesn’t necessarily provide a direct path to products so much as a means of accessing guidance, said Aaron Hodari, managing director at Schechter. “What we’re coming in and helping do is design, advise and consult on large and complex insurance transactions that might involve multiple products. So, I’d say it’s more of a bespoke, customized insurance consulting service than it is a product portal.”
“The outcome is product-based,” clarified Brown. “It is one part product and one part solution.”
Consulting aside, the available insurance products are both commission- and fee-based. Although the products are targeted for high-net-worth and ultra-high-net-worth clients, mass affluent clients wouldn’t necessarily be excluded from searching for solutions, according to CAIS and Schechter.
Schechter's business model won’t change as a result of the partnership, Hodari said. The firm will still share a part of the commissions earned from commission-based solutions and it will negotiate a cut of the fee from fee-based sales. There are no new markups from utilizing the new feature, said Brown.
Carriers are selected at Schechter based on factors, including balance sheets, high ratings and the carrier’s specialization, said Hodari. “We keep an internal list that’s updated probably weekly of who has the best type of products or the best type of coverage. That’s an internal research function.”
As insurance carriers delve into financial planning and add CFPs to their ranks, tech providers are betting that skittish advisors will be more likely to turn to moats such as portals, instead of allowing clients to potentially stray into the hands of professionals who they fear might steal them away. “That’s why we’re so excited about this opportunity,” said Hodari. “By working with CAIS, who they already have a relationship with and know and trust, they know that they’re working with a partner to them, not a potential competitor.”
