Banking on Brokers

It may not always be the most prudent thing to go meet “the big guy around the corner,” but it sure worked out well for Robert Harrison.

In Toronto for a job interview, the friend Harrison planned to meet for lunch was too busy to get away. The friend, working on the floor of the Toronto Stock Exchange (TSX) in 1979, motioned to Harrison in the gallery to come down, have a seat next to him and check out the floor.

“I sat there for a fascinating 20 minutes, watching the mayhem on the Toronto Stock Exchange, fascinated by the yelling and screaming, the paper, the people running around and phones ringing,” says the now charter financial analyst with Martin Merry & Reid Limited in Toronto.

“At some point, my friend turned to me and said, ‘Are you looking for a job?’ I went, ‘Well, yeah.’ He said, ‘There’s a big guy around the corner in a blue jacket. Go talk to him,” Harrison relays.

And so he did.

The “big guy” happened to be responsible for post-clerks on the floor of the TSX. Harrison began work with the TSX the following Monday.

Robert Harrison, president-elect of the Insurance Brokers Association of Canada

It was just one of the times Harrison, president-elect of the Insurance Brokers Association of Canada (IBAC), proved to be in the right place at the right time over the course of his more than three decades in banking and insurance.

Harrison remained at TSX for about seven months before transferring to CIBC Wood Gundy, where he entered the futures area, and worked as a trader from 1980 to 1982. When Wood Gundy closed its futures area, he decided to complete his undergraduate’s degree.

After doing so, what was there to do but go skiing in Whistler?

And so he did.

Harrison wound up as a ski lift operator, and then got headhunted. “Dominion Securities was looking for someone with some Canadian experience in the financial futures area and just happened to approach a person who happened to know my mother,” he says.

Harrison worked at RBC Dominion Securities as a trader from 1983 to 1986. That was followed by more time at CIBC Wood Gundy, where his last position was deputy chief dealer, the Bank of America Canada and then, starting in 1989, a 10-year stint with the Bank of NT Butterfield & Son Ltd. in Bermuda (thanks to a small ad in the Globe & Mail) where he dealt with derivatives, balance sheet risk management and client risk management in his role as vice president, treasury.

After returning to Canada, Harrison ran into David Browne, principal of Martin Merry & Reid. Browne suggested he “come down and kick some tires for a couple of days.”

And so he did.

Harrison started at the brokerage in 2003, and remains there to this day.

GETTING EDUCATED

From the time Harrison first secured a professional position, he has been involved in industry associations – everything from the traders pit committee at the Toronto Futures Exchange to the Toronto Insurance Conference and IBAC, serving at the latter as director, vice president and, after the annual general meeting this September, president.

His volunteer work has been fuelled not only by curiosity, but by the belief that it is important. “It’s important, I think, to be involved so that you can have an opinion and be able to share it,” he says.

“I’ve always been a writer of exams,” the long list of which includes those related to ethics, balance sheet management and risk management, says Harrison.

That may be “one area on the insurance side of things that I have not done as well as I would have liked, to write more of the exams and do more of the certifications.”

Robert Harrison, president-elect of the Insurance Brokers Association of Canada

Education and certification are important “for the insurance industry, and particularly for the broker end of the insurance industry,” Harrison

contends. Beyond demonstrating expertise and knowledge, it gives brokers – even those narrowly focused on specific markets – the breadth of knowledge necessary to handle customer queries.

“Even if all you are doing is automobile insurance, you’re going to have questions on home insurance, you’re going to be presented with questions on business insurance,” he says. “If you don’t know the answer, you should at least know where to go and get the answer. And education often gives you that opportunity.”

Also consider the public’s perspective. “Having the designations, having gone through the process demonstrates a certain amount of proficiency in the knowledge, but also commitment to the process, commitment to the industry, commitment to being a broker, commitment to being better,” he says.

That being the case, it is not surprising that education is high on the list of things Harrison hopes IBAC can further enhance over his time as president.

“I can’t suggest being a broker is quite in the same league in terms of educational requirements as law or medicine or accounting,” he notes. “But we need to strive at least to approach that in order to gain the trust of the public, in order to maintain our position as the choice for Canadians that we currently have,” Harrison emphasizes.

People want a broker to “put a wrap around” what their exposures are and delineate them, he suggests. If the topic is, say, home insurance, brokers “should be asking, ‘What is your lifestyle? What is it that you do in the house? What are the other external risks? Have you children? Are they at school?’

With that, the broker will begin to understand what the client is all about,” he says.

“While the banks know what your credit score is,” Harrison says, they do not necessarily know much about a customer’s life.

“Those extra, added pieces of information are what a broker in a conversation with a client can use to help place insurance, not cookie-cutter, but with an insurer that will look at those ancillary activities and fully understand and provide the right kind of coverage,” he maintains.

LOOKING FORWARD

Clearly, though, brokers face challenges. These relate to technology, the regulatory environment, competition and ever-present cost constraints.

“We are more and more online people,” Harrison says, demanding that brokers create ways of capturing information in as efficient a way as possible. “I think that every broker in the country should be taking a look at their IT systems and if they aren’t ready, willing and able to accept a paperless transaction system between them and the insurers they represent, then they’re going to be left behind,” he cautions.

With regard to the regulatory environment, regulators on a national basis are “looking at consumer protection on so many different levels that they’re driving, for example, broker skills,” he says.

The idea is to define what a broker is and what skills are necessary to be a broker. “IBAC, through our member associations, are working on a project to help delineate that, how to bring it forward,” reports Harrison.

“Fast forward a year,” Harrison’s hope is IBAC’s member associations are closer together in unity, moving forward as a group; regulators confidently regard IBAC as the first source for broker issues; and the needle on professional and ongoing education is moved incrementally so every broker understands its importance.

“There are 36,000 brokers out there,” he says, and “not everybody knows what everyone else is doing,” Harrison says. As such, IBAC’s continuing efforts with regard to informing and educating the membership remains key.