Future of Employee Benefits Sales

Discussion in 'Employee Benefits Forum' started by JoefromNY, Jan 7, 2015.

  1. JoefromNY
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    JoefromNY Active Member

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    What are opinions on the long term outlook of sales in this area. Particularly group life, disability and 401k. Is becoming a sales agent in this area a growing or shrinking opportunity? Thanks.
     
  2. JoefromNY
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    JoefromNY Active Member

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    Any thoughts or opinions?
     
  3. leevena
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    leevena Well-Known Member

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    Group life will have a need, but the cost, and consequently your compensation, is relatively low. You will need to have significant amounts of business and/or augment with supplemental or individual policies. Same could be said about DI, however the premium tends to be a little higher.

    Don't do retirement, so I cannot comment on 401k.
     
  4. JoefromNY
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    JoefromNY Active Member

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    Thank you, sounds like a tough business. Is 401k generally handled by the insurance agent or a different vendor?
     
  5. mking571
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    mking571 Member

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    Any business can be successful if put in the time and work....even the employee benefit business.........No business is easy.......learn the trade , market, service your accounts.........keep in mind that you do not need every account in your area..........just enough to be successful;...............there are really thousands of businesses............there is really no end to prospects........
     
  6. pdbrian
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    pdbrian Member

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    Great change creates great opportunities. It will be harder for those of us that have been in the business for a long time to adjust to the changes, but I really think that this can be the "golden age" for an employee benefits agent. Good companies want to keep good employees and adding benefits to their package is a great way to keep them.

    I know that there will be challenges along the way, but anything that's worth it will have those challenges. Take it from a 30 year veteran.:):)
     
  7. scagnt83
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    scagnt83 Well-Known Member

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    I agree that its a great time to sell group benefits. Group Health comp might suck on a % basis compared to 8 or 10 years ago (since most pay $20-$30/m per employee). But as already pointed out it can add up to a decent amount.

    But when you add in Life, DI, Dental, Vision, CI, etc. That is when it really becomes profitable. And if you have the group health there is no reason why you shouldnt be able to get the sup benefits.

    Also, by having access to the owners you can easily pitch other things such as BOE, DI or LTCI carveouts, retirement plans, etc.

    For a 10 man group you could easily create $4k+ in yearly income just on group health/dental/vision/life/di. If you added in the 401k you could make it $6k-$7k+ per year.
     
  8. Stephen
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    Stephen Well-Known Member

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    The future of the 401k world depends on if the DOL is ever going to grow any teeth. Most plan sponsors have no idea that they have a fiduciary responsibility to their participants.

    I think that we could see the qualified retirement plan space become much more specialized on smaller plans like they are on larger plans.
     
  9. scagnt83
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    scagnt83 Well-Known Member

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    I completely agree. Plan Sponsors (the business owner on most small plans) can even be held personally liable for participants investment performance if the plan is not 404c compliant.

    The problem is getting the Sponsor to realize how much liability they really have. All small plan sponsors care about is the fund selection and fund performance. They dont even realize that chasing performance could land them in a world of hurt, especially on a non 404c plan.

    I cant tell you how many owners start off 401k conversations with "well what kind of funds do you put in your 401k?".
    I usually reply with something about top rated institutional class funds... then I follow it up with something about a selection process and plan design that ensures minimal business and personal liability. Sometimes I get the point across and other times I dont. Lawyers are a good one to talk about it with.

    One nice thing is that there are plenty of turn key options out there for Sponsors of small plans. From 404c compliance to 3(21) or 3(38) fiduciary services. More and more options are available now at reasonable prices.

    But the small plan market is definitely becoming more and more specialized. Before Sponsors would just use their stock broker most of the time. If not them then usually the group benefits guy who often was not an expert by any means.

    Im making retirement plans in general my focus going forward. I plan to do employee benefits too, but most of the benefits I plan to sub out for a cut.
     
  10. marklewis
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    marklewis New Member

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    i like your post...........
     
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