How top benefit firms achieve sustained growth

Posted: 6/1/2016 8:00:18 AM by Miki Rettig (CA)
Original article: http://www.employeebenefitadviser.com/news/how-top-benefit-firms-achieve-sustained-growth?feed=00000152-175e-d933-a573-ff5ef1df0000

Long gone are the days when an employee benefit broker’s sole job was to sell and renew health insurance. Today, clients expect a wide array of services from their broker — including compliance, benefits administration, wellness and new technologies.

Those brokerages that have evolved with the industry’s changing landscape to become full-service advisers are being rewarded — with substantial year-over-year growth. “Ten, 15 years ago, our job is unrecognizable,” says Mike Schneider, Chicago-based managing director of NFP. “It was transactional then. It’s advisory now.” Serving as consultants rather than traditional “spreadsheet brokers” enables NFP to offer services in addition to benefits, Schneider says, which is essential to retain and attract new clients.

A team approach, where property and casualty brokers work with employee benefit brokers, spurred major growth at Bolton & Company, which doubled from $8 million to $16 million in revenue over the last five years, says Mike Morey, chief operating officer of the Pasadena, Calif.-based firm.  “They network and they sell together,” he says. “That just opened up a lot of different doors for us within clients and prospects.”

Not only does operating as a full-service adviser help brokerages grow, it’s become essential in today’s industry. “Now it seems that we’re consulting more and more on other issues that have nothing to do with employee benefits,” Morey says. Technology and compliance are two areas that clients continually ask about, as well as HR support, he says. Even within those subsets, brokerages need to be able to address all of a client’s needs, Morey says. “Compliance doesn’t stop with the Affordable Care Act,” he says.

A new job description

As the role of a broker has changed, so too must the entire firm, says Adam Bruckman, president and CEO of Digital Insurance. “In past years, a broker’s primary role was to provide financial support, secure coverage and provide the best value in benefit programs year over year,” Bruckman says. “While this is still a crucial role for brokers, the need to make sure clients are compliant with new regulations, in addition to addressing new service demands, is a major difference over the past decade.

“In particular, clients expect support in the areas of compliance, wellness, benefits administration and new HR technologies that all impact the costs and administration of benefit plans,” he adds. “It is not practical for one individual within a firm to provide all these services, so the need for a team of professionals with a variety of skill sets and knowledge is a significant difference for brokers and a necessary investment on behalf of their clients.”

Supporting clients’ HR departments in areas such as talent management and onboarding is becoming more commonplace, Bruckman says. “The role of the broker will continue to evolve beyond benefits and increasingly will be expected to help employers with several of the services that HR teams need to manage their employee base,” he says.

“The winners in the brokerage arena will be those who can successfully integrate a robust [human capital management] technology platform in tandem with industry-leading employee benefit advisement services.”

Technology surge

Along with carrier consolidation, technology is penetrating the middle and small markets, Schneider says. More employers are utilizing online enrollment, health reimbursement accounts and automated payroll systems, he says.

The surge of technology entering in the benefits space can be a big opportunity for brokers — or it can mean their demise — says J. Marshall Dye, president and CEO of Insurance Applications Group.  Those brokerages lacking tech-savvy employees need to fill that void immediately, he says, or risk being replaced by another firm or tech startup.

That doesn’t mean brokers will become irrelevant, Dye says. “There can be all the technology in the world, but it still has to involve fundamental concepts of insurance,” he says. “They have to merge together. If you are the person who is facilitating that merge, you are going to succeed.”

It’s important for brokers to remember the role technology plays in our society — where a person can check their bank statements in a nanosecond on a smartphone, says Perry Braun, executive director of Benefit Advisors Network.

There is an expectation of how quickly and easily information should flow, and while that might be unrealistic in the execution of employee benefits, that isn’t the client’s concern, he says.

“Clients are defining the outcome, but leaving the execution up to the adviser,” Braun says. The delivery of those outcomes impacts a client’s evaluation of their adviser.  “At the end of the day, it’s really how things are measured — outcomes and execution,” he says. The bottom line is that the industry has changed, and brokerages that want to continue expand must embrace that change.

“To grow, brokers cannot rely on the same activities and approach to business that made them successful in past years,” Bruckman says. “Brokers need to invest in new talent and new services to meet the increasing needs and demands of the business.

“Other than new services … the most important catalyst for growth is the realization that professionals in the firm need to become students of the business and invest in ongoing learning and development,” he adds. “Relationships are important, as always, but not enough to keep a client satisfied during these changing times. A clear understanding of new laws, regulations and available services is paramount.” hose outcomes impacts a client’s evaluation of their adviser, he adds.