"A Classic Win-Win-Win"
Few relationships have had as lasting of an impact on Pacific Life as its relationship with the M Financial Group. In the early 1980s, the M Group began selling Pacific Mutual’s products, the first time an independent brokerage had been allowed to do so. The results were so extraordinary that Pacific Mutual made a wholesale change to its business model—from career agents to independent producers—that transformed the minor-league insurance company into the financial powerhouse that it is today.
In 1983, the M Financial Group, named for its founders—Peter Mullin, Ely Morgan, Mark Solomon and Carl Mammel—wanted to add a mutual company to the line of products offered to its high-net-worth clients. The founders approached Tom Sutton, then EVP of individual insurance.
Up until that point Pacific Mutual had operated on a career agent model, with offices throughout the country that sold only Pacific Mutual products. Changing this system was a major risk for Pacific Mutual, but the company’s leaders knew it had to change in order to grow. “We had a small operation, a low volume of sales, and high expenses, which exceeded what we could price for,” Sutton said.
Pacific Life agreed to allow the M Group to sell Pacific Mutual products, and the rest is history. Pacific Mutual began to convert all of its business to the independent producer, or brokerage model. “It was a very difficult type of transition, and really was made possible by our arrangement with the M Group,” Sutton said. “That gave us a production source so that we could afford the risk of trying to change the career system.”
Pacific Life has never looked back, said Jim Rice, VP of M Operations, in 2003. “Our relationship has been a classic win-win-win situation: Pacific Life has benefited with a lot of good business. Producers have benefited because Pacific Life’s products and services are specifically tailored to the type of business they are in. Finally, our policy owners have benefited by getting state-of-the-art products that are built to fit their needs.”