Well, here we are at the beginning of the fourth quarter. On the one hand, it hardly seems possible that this year is almost over. On the other, many in our industry have found the beginning of this decade to be very challenging and would prefer to not relive the industry-altering events of the recent past. And when you add in the year of debate that preceded the passage of the health care reform bill, it's really been about two and a half years of difficult and disruptive dialogue and change.
Based on our interaction with benefits advisers all over the nation, it's all left the overwhelming majority of them in a state of denial. Many have been frozen into inactivity, while still others are trying to pretend that nothing really has changed.
This is no time to do your best impression of an ostrich. Get your head up out of the mire and assess the terrain. It's time for a reality check, don't you think? We may as well come to grips with the market conditions the way they are and begin preparing for the circumstances that lie ahead.
The reality is that we have a health care crisis of epidemic proportions on our hands. And managing benefits in the same manner as we have done in the last two decades just will not work in the future, nor will it help us collectively to address some of the underlying issues. All the higher deductible, higher copay and higher employee contribution cost-shifting strategies have been exhausted. And HRAs and HSAs, while helpful, still have fallen short of their promised potential.
There is no reason to belabor this point, as many others have written quite eloquently on this topic for quite some time now. It is, however, worth spending some time discussing the implications of these circumstances.
We have a very real crisis on our hands. And depending upon your temperament and perspective, your reaction is likely to vary widely. Is your glass half full? Or is it half empty? Or worse yet, is your glass cracked and streaming its contents?
Depending upon your perspective, your view of the benefits landscape is likely to be significantly different. All of this is perfectly understandable; however, you need to get beyond this stage.
While some linguists might disagree, most would concur that the Chinese ideogram for the word "crisis" is made up of two characters signifying "opportunity" and "danger."
The majority of advisers see only danger in the current market conditions, and as a result, they are fearful of making a wrong decision. Consequently, they make no decision - or at least none that will materially impact their business model and income in the short term.
To those of you in this mental state, I suggest to you that you cannot permit yourself to remain in this frame of mind for long.
For many, health care reform has their business precariously perched at a crossroads, and the signposts are pointing in all directions simultaneously. So they don't move for fear of heading off in the wrong direction. Hence, it's not only a market crisis; it's a very real business crisis for the adviser community.
But for those advisers that are thinking strategically, health care reform is an enormous marketing opportunity. After all, there isn't an employer out there that won't speak with an adviser that seems to have a reasonable game plan for dealing with all the market uncertainty.
In an idealized world, clients would expect you to know definitively what is going to happen and what will be needed to be compliant with PPACA's requirements. But that's just not reality.
There will be attempts in Congress to alter the legislation. There are already multiple court cases working their way through the judiciary, one of which is likely to reach the Supreme Court in 2012. There's been discussion about defunding certain provisions of the current law. And if all that weren't enough uncertainty, there are still thousands of pages of administrative guidelines to be written, not to mention subsequent court interpretations of the various provisions and mandates.
As a result, no one can definitively say what will actually transpire and what ultimately will be required of an employer.
Where does that leave you? And equally important, where does that leave your clients?
Your clients desperately need advice and counsel from a "trusted adviser." The question is: Can you transition and become that trusted adviser? We've already said that you can't have all the definitive answers. But what you can provide is a process for managing change.
Since the market conditions will be in a state of flux for the next four years (minimum), you need a well-defined methodology for managing change that instills confidence in your clients and prospects. You will need a logical strategic process and tools to assist your clients in creating a benefits strategic roadmap that will guide all their major benefits decisions for the foreseeable future. But it will definitely be worth it.
You need to become much more consultative in your approach to understand your clients' business issues and their human capital management challenges. Engaging clients in a strategic dialogue about what they are attempting to accomplish with their benefits program now and over the next three to five years will change up the conversation.
In this environment, it's not a "widget sale." It's not: "I have a widget to sell. Do you want to buy my widget?" You need to alter your approach to client engagement and in the process elevate your status to that of an insider adviser. You need to rethink your personal marketing positioning. You need to re-evaluate what your value proposition is to your contacts and relationships.
If you cannot make this transition, these next several years will be the toughest of your career. It's not about access to products. It's about your advice and expertise in the context of that employer's needs.
By focusing on having a strategic dialogue with your clients and throughout your prospecting activities, you can simultaneously transform your practice and begin to morph your business model. Firms that are embracing this approach are seeing their revenues grow 25% to 40% this year, while most of the benefits adviser community will struggle to hold revenues even. And those trusted advisers are even more optimistic about their revenues in 2012 through 2014, since they are taking accounts away from the adviser group that is confused and frozen into inaction.
Which category do you want to be in? Do you want to be a "deer in the headlights"? Or do you want to take control of your business destiny and gain market share?
I understand that you may feel like the marketplace has given you a truckload of lemons. So you need to learn to make lemonade.
In addition, when you engage your clients in a strategic discussion about their needs, you will find that you will:
*Sell more products per client
*Generate more revenue per client
*Improve your client retention
*Increase your profitability
*Enhance the asset value of your business.
And you will accomplish all that while you are engendering your relationships and your value to your clients.
Now that's a winning strategy that will benefit you and your clients.
Kwicien is managing partner at Baltimore-based Daymark Advisors. He can be reached at email@example.com.
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