Ontario’s insurance watchdog ordered the company to destroy all teaching materials and retrain agents, because the old instructions could lead to unfair or deceptive practices under the law
Life insurance for a baby might sound a little off, but fast-growing Greatway Financial Inc. says it’s never too early to sign up.
The Financial Services Regulatory Authority of Ontario alleges that Greatway has focused its sales almost entirely on universal life insurance, a complex financial product usually used by the wealthy for estate planning. It also alleges the company’s training encourages agents to sell the same product to all consumers regardless of their income or needs.
The model, combined with the company’s sales strategy, has led to some Greatway agents pulling in more than $1,000,000 in a year, the company says, while its YouTube channel profiles former cab drivers and house cleaners who have made well over $100,000 in their first year at the company. That pace of growth has created added risk due to the number of inexperienced agents, said Huston Loke, executive vice-president of Market Conduct at the FSRA.
A key part of problem with the financial strategy, said Vaneesa Cline, a financial planner in Calgary, is that the cost of the insurance ramps up rapidly with age. That diverts payments away from the investment side and saddles buyers with a lifetime of rising costs for a premium product they may not even need, she said.
Greatway, which declined an interview request, said in an emailed response to questions that agents are trained to provide clients with the best possible solutions that adhere to suitability, needs, goals and budget, and that all clients go through a financial needs analysis with their agent to find the best option that meets their needs.
It helps explain how Greatway says it has well over a hundred agents pulling in more than $100,000 a year, even as most work part time.
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