As I discuss market trends with my peers around the country, PEO’s are a consistent topic of discussion. It’s one of those issues where everyone seems to have an opinion about their potential relevance and impact on the benefits adviser community. I realize that it depends on your locale and whether any PEO’s are willing to partner and distribute their services through an adviser network. Clearly some organizations are exclusionary and represent direct competition to our business operations.
We at Selden Beattie Benefits Advisors have actually taken some accounts away from PEO’s in our area and generally this is when they only offer a “bundled” solution. However, in many markets PEO’s are willingly and actively seeking distribution. A bundled solution of payroll, benefits coverages, benefits administration, and workers’ compensation insurance might not be for every employer, but it may very well make sense for specific clients. On the other hand, the client might be better served by an “unbundled” solution and we should be able to provide that offering as well.
So what’s your perception? Do you consider a PEO another solution to offer to clients under the appropriate circumstances? Or do you perceive the PEO solution to be a threat to your business model? Since we take a highly consultative, needs analysis approach with our clients, I’m personally currently considering the PEO option, under the right circumstances, as one more tool for us to use when helping our clients to solve their workforce management challenges.
If it enables us to earn the same or greater compensation in the process, what’s the downside? Of course this assumes that you are dealing with a reputable PEO that provides quality service and professional expertise since their actions will reflect on your firm and its reputation. In that regard, it’s similar to any number of other partnering relationships that you may already have for payroll services, executive benefits, voluntary benefits, benefits communication, retirement planning, human resource consulting, etc. So you need to thoroughly conduct your due diligence before selecting a PEO partner, including checking with their current clients and any vendor relationships that may exist. Likewise, if you are going to create your own unbundled solution and involve strategic partners for some of the services.
I realize that this approach is a departure from the way we have historically done business, but these are challenging times and we need to provide creative solutions that benefit our clients as well as our own businesses. And yes, for many advisers, this will take them way outside their comfort zone. But we all need to evolve. Consider that thirty years ago we had employer funded retirement plans and now 401(K) plans are the norm. Regardless of the product or service solution selected, our clients need our counsel and expertise. Ultimately, that is our value proposition.
Let us hear from you in the comments on my idea and we all can get stronger and more nimble in the process.
Beattie is president and chief executive of South Miami, Fla.-based Selden Beattie Benefit Advisors. She can be reached at 305-661-9090 or firstname.lastname@example.org.
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