WASHINGTON — Benefit advisers are evolving, and the next generation has little interest in traditional brokering.
Instead, many want to be benefit consultants — professionals who audit benefit programs to help employers save money, said benefits experts and advisers during a session this week at the World Health Care Congress.
“I’m not a broker — and I don’t want to be. But [the employer] ends up wanting me to be,” said Felipe Barganier, CEO of GAB International, an Atlanta-based consulting company.
Barganier said employers often ask him to take over as their broker after his consultations save them a significant amount of money. He said a few clients specifically sought out his services because they weren’t confident their current broker was getting them the best deals.
“I like finding money; I don’t like having to do the heavy lifting that comes with being a broker, but I will if I need to be,” Barganier said.
Unlike brokers, consultants don’t sell employers benefit programs, but they can make recommendations for new ones.
Panel moderator Nelson Griswold, president of Bottom Line Solutions, a Nashville-based benefits consulting company, said he has advised some 100 brokers to adopt more of a consultant’s role via his organization NextGen Benefits Network — a collection of benefit firms using this practice.
“We’re no longer interested in letter of record and managing health plans; we [want to] consult on strategy. We’ll speak with the CFO and help reduce and control the cost of healthcare,” Griswold said.
During the panel discussion on the new, lucrative role of benefit consultants, other brokers agreed the best part of the job is coming up with creative strategies while avoiding all the tedious paperwork that comes with being a broker.
Unlike brokers, who work on commission, consultants charge a one-time fee and, sometimes, receive a percentage of whatever savings they bring to the employer. Barganier says he often charges employers $25,000 to look over their programs, but offers to waive all or part of the fee if he’s not able to save employers as much as he originally projected.
“Often I’ll say, ‘If I’m not saving you 10 times what you’re paying me, I’ll give the money back,’” Barganier said. “That really helps build trust with employers.”
The consultant role does come with a special set of challenges, alongside the perks. For instance, consultants tend to market their services to CFOs because they’re always looking for ways to save their company money, Griswold said.
While it’s an effective strategy for gaining new clients, panelists said it may provoke hostility from HR professionals and their brokers, who often feel the consultant is trying to sever their relationship. They recommend going to HR professionals with their services, marketing it as a way to gain favor with the CFO.
“I know there are things I can do to help them, so I tell [HR pros] my purpose is to drive value to you, not to change who your broker is,” said Jim Blachek, co-founder of the Benefits Group, a Clarks Summit, Pennsylvania-based firm, during the panel. “If they’re married to their broker, it allows them to drop their guard and hear what I’m trying to say.”
When it comes to dealing with hostile brokers, Allison De Paoli, founder of De Paoli Professional Services, a San Antonio-based benefits consulting company, said she tells them she’s not interested in taking their jobs, but she’s not responsible if employers decide to go with someone else. Brokers are more likely to keep a client when they follow the recommendations of a consultant whose analysis saved the company money, she said.
“I have strong relationships with C-suite executives,” De Paoli said. “The brokers I work with are scared of that relationship.”
