John Hancock Financial Network is shaking things up, moving away from its insurance roots and implementing an ambitious expansion plan. JHFN President Brian Heapps said Tuesday the firm is re-branding under its registered independent broker-dealer name, Signator Investors—the first step in a bold strategy to break into the top ranks of the IDB space.
“Insurance ties are not what they used to be,” says Jon Henschen, president of Henschen & Associates. These days, an association with an insurance company can be seen as a red flag, leading advisors to wonder when the parent company is going to sell, he says.
John Hancock’s rebrand comes amid at a time when insurance companies are getting out of the IBD business. For example, Hartford Financial sold Woodbury to AIG in December, while Lincoln Investment scooped up Capital Analysts in February 2012. Most recently, Metlife sold its Tower Square Securities and Walnut Street Securities units to Cetera in April.
Stepping away from the JHFN name—which the firm says still may be used in various, minor ways—reflects its shift toward wealth products, an area that saw sales grow by double-digits. Six years ago, insurance made up roughly 80 percent of the JHFN’s product ratio, while wealth products only accounted for 20 percent. Now, wealth products account for 60 percent, while insurance products make up 40 percent, Heapps says.
“The transition, increased sales and growth are providing us the scale necessary for further expansion,” Heapps says. The rebranding also kicks off Signator’s bid to ramp up the business, Heapps says. “Our goal is to be in the top ten broker-dealers.”
Signator broke ground on this ambitious plan in June, acquiring Washington-based Symetra Investment Services from Symetra Financial Corp. for an undisclosed amount. The deal added 280 brokers to the open product platform, bringing Signator’s headcount to 1,900 advisors.
And that’s just the beginning, Heapps says. Signator is looking to acquire more firms in an effort to “offer advisors a menu on how to affiliate,” he says. Going forward, the firm is looking for future acquisition opportunities that offer a similar product mix, a focus on holistic planning and open architecture.
But it’s a crowded field at the top, so the big question here is how Signator is going to differentiate itself, Henschen says. “How are they going to set themselves apart from the crowd?”
The current low interest rate environment—which is expected to last another few years—also makes it difficult. If it persists, Henschen says he’s pessimistic that insurance parent companies will resist the urge to shed non-core units like broker dealers. “I’m used to these insurance companies having loft goals, but then reality sets in,” he says.