The OVB network in action

Despite the commission-based nature of the OVB network, Mr Gardavsky insists that agents are not influenced by the fees attached to favoured products. “Commission obviously plays a role in which products are sold, but we can provide a graph of how the portfolio is distributed for the last year and you can see that the portfolio of products is balanced,” claims Mr Gardavsky. “We are really proud that our persistency figure is very high, at around 90 per cent. Our advisers are signing long contracts and people are maintaining them. This shows the quality of the deals which are concluded. One would not be able to say that our advisers would underwrite products just based on the amount of commission paid out.” A typical OVB client would be invested in funds and life insurance products, but would also buy home insurance, health insurance and take out a mortgage. Around 25 per cent of the business is investment led. The beauty of the Allfinanz model is that once clients have bought one type of product, they can be sold another line. “Our strength is that we are very close to the client,” says Mr Gardavsky. “Each customer has two or more contracts with us on average.” The competitive position is maintained by an approach similar to other European networks such as Italy’s Mediolanum, where advisers are always calling and visiting clients, not really giving them any opportunity to forget the product distributing organisation. Mr Gardavsky contrasts this to the more laid-back attitude adopted by leading Czech banks. “Facing the competition is tough, but it is important that the client is visited by our staff,” he says. “It’s a pro-active type of offer. Banks just wait for clients to come to them, or they send letters out. And if our adviser provides an offer to the client, it is not exclusively the offer of one banking group.”