(Credit: Tomohiro Ohsumi/Bloomberg)
Field marketing organizations (FMOs), also known as independent marketing organizations (IMOs), have always played an essential role with independent financial professionals by helping them build and grow their practices, acting as the expert intermediary between financial professionals and carriers.
Traditionally, FMOs have been seen as a place for independent financial professionals to sell fixed and fixed index annuities and life insurance products, while also benefitting from access to different marketing and sales techniques. While what each FMO offers can vary greatly – from marketing strategies to sales tools to lead-generation software – the ultimate goal is to proactively drive their financial professionals business and provide clients with much needed retirement solutions.
But the industry has come a long way in recent years, and as a whole, we're now embracing a more holistic approach when it comes to creating financial strategies. Rather than using insurance products as an add-on, they are now viewed as an important tool to help manage risks to retirement within a comprehensive financial strategy. And many financial professionals now view "guaranteed retirement income" as an additional asset class within a portfolio.
With this ever-changing financial services landscape, traditional IMOs and FMOs are finding a focus on just marketing services is no longer enough to meet the needs of their financial professionals. Today's independent financial professions seek a much wider variety of financial products and services, including digital marketing and technological platforms. As a result, many traditional IMOs and FMOs have evolved into full-service financial services organizations (FSOs), offering a wide range of products, services and platforms to their financial professionals. In addition to fixed insurance solutions, many also offer variable products to independent registered reps and broker/dealers, investment advisory services, and much more. This, in turn, allows the financial professionals to help meet the demands and expectations of the consumers they serve today.
The Start of the Evolution
There were two major forces that drove this evolution: the initial introduction of the U.S. Department of Labor (DOL) fiduciary rule and the convergence of technology platforms. At that time, FMOs began thinking about new ways to approach the market from a holistic financial strategy perspective. While some were already serving the broker/dealer and registered investment advisor (RIA) space, the changes pushed many to start to think about new ways to approach the market, driven by the numerous interpretations of the anticipated forthcoming rule. And by the time the rule was vacated in mid-2018, many FMOs and carriers had already invested significant time and money to transition to newer business models and marketing platforms.
The DOL fiduciary standards also raised awareness with consumers around differences in financial professional offerings. Because of this, many professionals, advisors, and reps began to incorporate a much more holistic view of a client's finances, including how insurance might fit in. Their focus went from asset accumulation and growth potential to now also consider guaranteed income and increasing income opportunities in retirement – solutions often found in insurance products and provided through built in or optional riders at an additional cost. This provided a gateway for traditional FMOs to evolve, embracing the shift in the industry and expanding their offerings to better meet financial professionals practice management needs.
