Making the most of the group retirement and group insurance business
BY Advisor For Business Insights from Standard Life | February 14, 2013
It’s been 40 years since Mike Duggan started specializing in employee benefits, offering consulting services to large and small businesses in Mississauga, Ont. and beyond.
Not a day goes by where he doesn’t revel in the fact he’s had a rewarding and supremely beneficial career at the helm of Duggan Benefits Insurance Agencies Inc. And he hasn’t lost his fire when it comes to doing right by his clients—providing them with strategically sound and well-serviced group plans.
While some advisors eschew the group line of expertise due to competition and complication, it’s both of these things that spur Duggan to find the best possible solution for his numerous corporate customers that span between 35 and 800 lives.
He thrives on competition. “I enjoy the people. I’ve always been a team guy—always involved with hockey….I enjoy being challenged in competitions, [including] if we’re in competition for a particular account,” he explains.
CROSS-SELLING INDIVIDUAL PRODUCTS TO PROSPECTS THEY’RE ALREADY SERVING AS A GROUP IS A VIABLE WAY TO EXPAND
And how does he differentiate himself and his products? One way is by offering up his experience, which helps to simplify the complexities of implementation and administration: “We’re key producers with most of the big carriers; our relationship with [them] is such that when we ask a favour they rarely say no—because we’re always honest with them.”
Considering adding “group” to your advisor shelf? According to advisors who have taken the plunge, the plusses of providing employee benefits, including group insurance and group retirement plans, far outweigh any challenges. And in an environment where chronic and mental illness, unemployment and other economic hurdles mar the social landscape, it’s more crucial than ever that advisors consider offering such group platforms to clients.
Daniel Werbrouck, senior team leader, Implementation Group Savings & Retirement, with Standard Life in Montreal, says group plans, from a business perspective, are an interesting and easy way for an advisor to continually grow his or her business.
Cross-selling individual products to prospects they’re already serving as a group is a viable way to expand.
“They’ve already got a foot in the door…it makes the next step of looking at other needs easier for the advisor,” says Werbrouck. “It’s something they can look at and nurture…and over time can help to increase their overall book of business.”
David Blevins knows all about the group client attraction factor. As president and founder of Jones DesLauriers Blevins Insurance Group in Barrie, Ont., he says offering group plans is key to gaining new clients while keeping your current ones in tow.
“You’re looking to fill the needs on many levels. So you’re going in and doing individual estate planning; you’re selling insurance to individuals and families; you’re trying to look after estate planning, capital needs analysis, replacing the income in the case of the death of the breadwinner, add[ing] to their stability if disability occurs…and of course sav[ing] for pensions,” he says.
But the real trick is to keep an eye on the challenges your clients face.
“They will have estate issues right off the bat,” Blevins explains. “Typically they have tax issues, continuation issues, such as, ‘If I’m selling my business, whom do I sell it to? How do I sell it?'”
Another sweet spot? Group plans with a payroll deduction help employees accumulate a bigger nest egg.
“Your money’s elastic, you’ll spend what you have,” says Werbrouck. “It’s easier to take $100 off your pay and put it aside every week as opposed to at the end of the year, and then put $3,000 [towards retirement savings]. That’s one of the huge advantages of the group retirement plan.”
Furthermore, group buying power usually results in lower fees than what an individual would pay on the retail market—”a huge benefit often overlooked,” Werbrouck adds.
And, of course, the more wealth employees amass, the more desirable they become as individual clients.
SUPPORT IS AVAILABLE
Importantly, for those who are considering taking the plunge, Werbrouck emphasizes that the advisor doesn’t have to be a pension expert to consult or advise companies on group retirement plans. His company has managers of business development. This role, says Werbrouck, is designed to “give the advisor the tools and information they need to prospect, design and sell group retirement plans.”
“It’s a win-win situation,” he says. “The client is happy; the advisor looks good.”
And, critically, the group employer client has employees who have a plan that meets their needs.
GROUP DO’S AND DON’TS
EDUCATE YOURSELF AND YOUR CLIENTS
There are very few “students of the business,” says Mike Duggan, who heads up Duggan Benefits Insurance Agencies Inc. in Mississauga, Ont. He suggests taking the Certified Employee Benefits Specialist program, an industry standard. “Continue to analyze and learn about your business,” he recommends. “Read the contracts and realize exactly what the policy says is covered and not covered.”
Adds David Blevins, president and founder of Jones DesLauriers Blevins Insurance Group in Barrie, Ont., “What will separate one rookie from another is how much homework he or she has done to understand what drives the cost of benefits.”
BE OPEN, HONEST AND STRAIGHTFORWARD
“We work on a principle called HIT: honesty, integrity and trust,” says Don McCannell, president and CEO of McCannell Financial in Saskatoon, adding, if in doubt about something, tell them you don’t know but you’ll find out: “Tell them you’re starting out in the business and you want to work hard for them.”
Duggan agrees; he cautions rookies “not to appear to know everything, but to be honest, straightforward and responsive, and deliver on time.”
CHASE THE FLAVOUR OF THE DAY
Instead, take the time to think about what you’re trying to achieve, says Daniel Werbrouck, senior team leader, Implementation Group Savings & Retirement, with Standard Life in Montreal.
TRY TO SELL ON PRICE ALONE
“It’s a very competitive industry,” says Blevins. That means if you’re going to get into employee benefits you have to be completely committed to ongoing service for clients, because you will have to defend yourself on a regular basis. If you sell a group plan on price, Blevins suggests, you’ll lose it on price.