by Bethan Moorcraft 04 Sep 2018
US insurance giant
Prudential has unveiled a new direct-to-consumer service that cuts out its
large network of advisors.
The service, called LINK
by Prudential, was launched quietly in August. It marks a huge change for the
large US life insurance company, which manages approximately $1.4 trillion in
assets and has traditionally carried out business through a large, trusted salesforce.
According to a Reuters
report, Prudential executives said the new LINK service offers personalized
financial planning, and recommendations for insurance, annuities and
investments in a portfolio of exchange-traded funds. For the first time in Prudential’s
143-year history, customers can buy products directly through LINK or with some
help from remote advisors.
“Given where the
investing world is going, this makes sense,” said John Barnidge, analyst at
Sandler O’Neill, who also noted the service is just one piece of Prudential’s
diverse business. “Millennials and other younger people have large purchasing
power,” Barnidge commented, adding that they don’t value insurance agent
relationships like previous generations have done.
Stephen Pelletier, chief
operating officer of Prudential’s US-based businesses, said advisors will still
play a “critical role” in the firm’s success. The insurer hopes the LINK
service will help to balance a growing demand for online sales without
alienating its advisory force, according to Reuters.
His sentiments were
backed up by Prudential’s chief customer officer Naveen Agarwal who argued LINK
gives customers “a seamless experience” where they can buy both insurance and
financial products from the same site and choose from different levels of
advisory services.
Prudential’s Pelletier
added that the LINK service will be available to 20 million people through
workplace businesses, including retirement plans and pension payments the firm
took over from other companies that purchased group annuities.
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