Trusted adviser: Putting theory into practice

This month I thought I'd deviate from my normal approach and follow up on a previous column using a case study approach.

Many of you will recall the June 2010 cover story about Selden Beattie Benefit Advisors. In that article, founder and CEO Beverly Beattie articulated an approach for bending the health care cost curve by incorporating a culture of wellness into plan design to reward healthy behaviors.

The view and approach that she described was very strategic and was designed to engage a client in a logical, methodical process of identifying critical enterprise needs in conjunction with and in support of an organization's human capital management goals.

Beattie also talked about helping clients create a roadmap for managing change resulting from PPACA and its cascading administrative compliance requirements, and to guide all the major benefits decisions that would be made over the next three to five years.

It seemed like it would be meaningful and interesting to revisit that discussion and make it more concrete and less theoretical by reporting on how Beattie's approach was applied to a real client situation.

In the interest of full disclosure, Selden Beattie has been a Daymark client for some time, and Beverly has become an advocate of benefits strategic planning. Perhaps what is more germane, in light of our collaboration in this situation, we can both speak first-hand to the client circumstances, the process utilized, the facilitation of the strategic discussion, and the ultimate recommendations that were made to the client. So let's delve into this fascinating case study.

Kwicien: Can you describe the initial client circumstances?

Beattie: Sure. We have worked with this client for many years, although for the past five years, one of the large national brokerage houses that promised more resources, capabilities and expertise, took over the BOR on the medical. We maintained a very cordial relationship, providing best-in-class service on ancillary benefits and the retirement plan, and of course we were approaching them regularly with a product/service offering sales approach.

Kwicien: And what changed?

Beattie: Well, in the last two years we have become much more strategic in our approach with clients. About nine months ago, we approached this firm with the idea of creating a benefits strategic plan. Both the head of human resources and the CFO were intrigued.

We offered to facilitate a strategic planning meeting with their top four executives and to create a benefits strategic plan for them that would act as a roadmap for all their major benefits decisions. It would be the starting point for all the tactical decisions affecting their benefits program over the next three to five years. The client had an "A-ha!" moment - the light bulb went on for them. The CFO realized that they had a plan for managing every other aspect of their business except for their benefits program. With benefits being such an expensive line item, generally about 9% to 11% of total operating expenses, he wondered how they had overlooked something so obvious.

The client agreed to pay for the strategic planning service and we also immediately took over their account.

Kwicien: And you asked Daymark to help facilitate the strategy session, or discovery meeting.

Beattie: Yes, we thought that the client would appreciate having some subject matter experts involved.

Kwicien: It was great to see a forward-thinking client embrace the strategic approach.

The executive team admitted that despite the fact that they spent millions of dollars on their benefits program, and they had a fairly rich benefits plan, this was probably the first time that the four of them ever collectively talked about their benefits program in such a thorough manner. They were very eager to talk about what seemed to be working, what they were trying to accomplish with the money they were spending, and what apparently was broken or at least problematic.

Beattie: Yes, they really opened up and told us all about their human capital management issues, and the role benefits should be playing in their total rewards program. We learned all their pain points, and what they really wanted to achieve over the next three to five years.

Kwicien: It makes you wonder how many other employers are in the same position, doesn't it?

Beattie: I thought that it was quite remarkable. Imagine how much of a relief for the VP of HR that all the issues were out on the table and that the CEO, COO and CFO all were in agreement with the overall strategy that was developing as we all talked. It was a thing of beauty to see it all unfold, and the information we gathered was insightful, established critical needs, and set priorities. It truly was a roadmapping session.

Among the needs we uncovered were:

* Despite having a very "rich" benefits program, employees perceive the employer's benefits program to be average or less than average.

* Employees have not been provided a formal methodology for providing feedback about their benefits program or any future enhancements that they may wish to see.

* Benefits communication needs to be improved and to be more consistent.

* A lack of understanding about how to be intelligent users of their medical insurance program on the part of the employees leads to excessive usage of the plan and plan selections with lower deductibles.

* Since we had "mined" their utilization data, we were able to talk about what to do to keep the healthy participants healthy and to keep those with chronic conditions from declining further.

* Plan participation in the 401(k) program is not as high as the employer expects.

* The benefits enrollment process is not formalized and only about 60% of the employees participate in group meetings even though theoretically participation is mandatory.

* While there are a few voluntary benefits offered, a short-term disability plan and a permanent life offering needed to be streamlined and the benefits required improvement.

* During the contingency planning phase of the discussion, the CFO acknowledged that generally the organization is risk averse; however the firm should evaluate what a self-funded option would entail.

* The employer was seriously considering evaluating for the first time a more state-of-the-art benefits administration system.

* The CEO and CFO are looking for better benefits accounting.

The client truly appreciated that this was very much a client-centric, consultative, needs-analysis approach to understanding and articulating their needs. When we concluded our session, we were told that no broker, consultant or benefits adviser had ever done what we just did, and we did it in a matter of four hours. The client was thrilled, and they have become a great advocate for our business and our approach.

Kwicien: That invariably happens, since we were not trying to handle this as a product-driven sales situation. We uncovered an entire list of needs in and around their benefits program, and then we developed strategies and action plans to address each of their issues.

At that point you are providing solutions, not selling products or services. And in the process, you have successfully written yourself into the script for the next three to five years since you co-developed their benefits strategy. Consequently, you have successfully elevated your status to that of trusted adviser.

It's an approach that definitely achieves multiple objectives for an adviser. It results in more product sales, more commission and fee-based revenue, increased client satisfaction, and improved client retention. That's a win-win for everyone involved.

Kwicien is managing partner at Baltimore-based Daymark Advisors. He can be reached at Beattie is the founder and CEO of Selden Beattie Benefit Advisors in South Miami. You can reach her at

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