Advisor | December 2021

The upcoming acquisition of Deutsche Bank’s financial network by the insurance giant Zurich – currently looking forward to getting the banking license from Banca d’Italia – is certainly not going to be the only news in such a buzzing sector.

In fact, financial networks are currently returning to their first love: insurance products and policies together with investment products.

Besides, figures speak for themselves: 75% of Italians with an average annual balance of €100.000 do not manage their savings and 90% of them do not have adequate insurance coverage.

Therefore, speaking of Wealth & Protection is a must rather than an option for those who want to play a leading role in the market.

In addition, the margins generated by asset management are currently contracting due to negative interest rates; on the other hand, margins generated by insurance products (mostly non-life and life insurance, unit linked included) offer interesting opportunities.

For this reason, Zurich – which owns over six billion euros in active policies with Deutsche Bank Financial Advisors (DBFA) – could not afford to miss the chance to acquire Deutsche Bank’s financial network.

Many believe Italians to be underinsured and disinclined to managing their savings because of their poor financial education. However, few are ready to admit that the responsibility rests also with a scarcely proactive and untrustworthy offer.

With a few exceptions, insurance agents have been living on the advantages generated by “RC Auto” insurance policies with free-falling margins.

Every year, more insurance companies close their business, and the trend is far from being positive. After all, those who rest on their laurels will, sooner or later, have a sad awakening.

While in much better health than insurance agents, financial advisors are currently dealing with momentous challenges.

First of all, the generational shift of their clients: it is estimated that over the next ten years, 2.000 billion euros are going to be passed on to the children or grandchildren of current 70/80-year-old clients. And, on average, 50% of inheritors decide to change the bank or the financial advisor chosen by their predecessors.

In addition, the rising level of digitalization of Italian clients, which has been increasing since the outbreak of the Covid-19 pandemic, makes financial consultancy more adaptable and thus contestable by other digital operators.

Two emblematic instances: the arrival of the Spanish BBVA in Italy with a completely digital offer; and the desire of Directa SIM, pioneer of online trading, to enter in the private banking sector after their listing at Euronext Growth Milan.

Of course, the best financial advisors have nothing to fear and will be able to count, at least for a few years, on their advantages and social skills. But will the situation remain the same in the future?

Will App and digital platforms succeed where financial professionals have failed? We believe that the answer is no, however there is no certainty in tomorrow.

Nicola Ronchetti