This pivotal year is about half over and most benefit advisers are still in denial about the operational and financial impact of health care reform on their business. The overwhelming majority do not have a plan to adapt and change to the new market realities. Do you have a plan? Why not? Even if you retained 100% of your current clients, you likely will see compensation levels decline by 20-40% depending upon the state(s) comprising your local market. Nationally, group medical compensation in the small case market, which comprises 90% of employers, will decline to 2-3% of premium or a PEPM fee of $18-$22.
What else should you consider doing to be a survivor? You need a process for managing change. You need a process to help your clients plan their benefits decisions and expenditures. Your clients need a roadmap, a strategic plan, to guide their tactical decisions; both their actions and reactions. To do this, you will need to become much more consultative in your approach. And you will need a formalized process, training and tools in order to make this transition successfully. Your primary value proposition cannot be as the access point to products. Your clients need your expertise and you need to reinvent yourself to remain relevant.
A new role
Your clients need your advice and counsel. They are confused and anxious. The bottom line is that we all will be awash on a sea of uncertainty for the next two to three years. As a result, there isn't a client organization out there that's not willing to talk to an adviser that seems to have some information or some process for coping with all this change.
Forward-thinking benefit advisers know that all this uncertainty creates enormous opportunities for the prepared. How can you monetize the client relationships that you already have? You have already incurred the client acquisition expense, so how can you generate revenues going forward? Engage all of your clients in a dialogue from a strategic perspective rather than remaining on the tactical level. Start by asking your clients open-ended questions about what they want to accomplish with their benefits program over the next three to five years. You can lead this process and thereby gain more control.
In addition, during this process you will have the opportunity to consider the intelligent integration of voluntary benefits. With all the plan design and re-design of the last decade, there inevitably are gaps in coverage created. However, the needs of employees have not diminished. At a minimum there are opportunities to offer employee-paid: permanent life insurance; disability income; critical illness; auto and home insurance; long-term care; pre-paid legal services; household budget and debt counseling; and retirement plans. You also need to assess their executive benefits, which may impact that employer's ability to retain key executive talent.
Your clients need a "trusted adviser," and if you follow this approach, you will instill confidence and build consensus within their management team. The beauty of this is that you can also create new revenue streams in the process by charging consulting fees and earning commissions on voluntary benefit product sales. And in the process you will be writing yourself into the "script" for the next three to five years from a client retention perspective. Now that's a winning strategy.
Kwicien is managing partner at Baltimore-based consulting and advisory services firm Daymark Advisors. Reach him at
