Group Benefits Consultant

[CFP83]

Brand new to this forum, what a great resource for someone just entering any channel of the insurance world! forgive me for my ignorance if this post should be somewhere else on this forum but I wanted to make sure to post it in the general area to insure as many members could offer feedback for me. First I humbly give you an overview & background before my question to all of you that I would so very much appreciate any and all feedback on.

I am 28 years old and a CFP with my series 7 license five years into building my personal and business financial planning practice. My practice is associated with one of the "big 3" mutual life insurers (I'm a statutory employee) because of the value proposition they bring to the risk management side of my clients life and disability insurance needs/portfolio. I see myself though as an employee of my clients and exhaust all companies and products to best meet their needs I have a staff of three full-time team members and look to consistently do joint work with other advisors so that I can expand upon the scope of service I am able to bring to my client relationships.

Just this week I have began working with an advisor who has one of the the larger "employee benefits consulting" practices with my state. I looked at this as a great value added proposition to bring to the table business-owner clients as well as to capitalize on business that I have been totally "walking right by". After a day of meeting with four existing clients of mine it looks as if we will become agent of record on all four of these business's health plans (which average around 30 employees each).

Being completely new to the Group Benefits world, what should I keep my eye's open for as I begin to foster this new relationship with this other advisor? He will be functioning as my GA for all group work that we do on my existing clients as well as new prospects. I have no idea about commissions and what I should expect, Although I know most definitely should be receiving the highest possible payouts based upon his mammoth group health production numbers (he has over 15--500 person groups and 4--1000+ person groups to go along with around 300 other groups under 100 persons)

 

[moonlightandmargaritas]

My practice is associated with one of the "big 3" mutual life insurers (I'm a statutory employee) because of the value proposition they bring to the risk management side of my clients life and disability insurance needs/portfolio.

"Financial planner", huh?

What percentage of your "plans" don't include a recommendation to purchase products from your "statutory employer"?

I have a feeling that you're a life insurance salesperson, and feel that you can better obfuscate it by having a Series 7 and CFP. Nothing wrong with being a life insurance salesperson, but why don't you call it what it is?

"Associated" and "statutory employee" aren't consistent.

 

[somarco]

If you are taking over as AOR you will get paid at the same level as the existing agent.

30 life groups are usually paid on a graded percent of premium. Rough estimate is around 3-4%. They could also pay a per capita as some carriers have moved in this direction. In that case might be $10 - $15 per head.

Big groups pay well but not as well as you might imagine. Many of those will be self funded, paying a per capita fee built into the admin.

 

[CFP83]

somarco...thanks for your feedback regarding general group health commissions-very much appreciated. To be more detailed regarding my question for the rest of the board, I want to educuate myself on group health because when it comes to comp I'm just trying to figure out what is fair and what this other advisor should be paying me. Also, if you were in my position what are some things I should be aware of?

moonlight&margaritas...I can completely understand your first impression, there are so many people out their trying to "church up" their business by saying their an advisor when their a glorified stock jockey or insurance salesperson...which, like you said is fine-just don't misrepresent yourself, I couldn't agree more. If I were in your marketplace in Florida of guys chasing the "rich sick dying" I'm sure I would second guess a lot peoples motives as well. Whether it's a business or individual I believe that financial planning without risk management is a bet. I actually have around 67 million of investments under management and I am associated with a large mutual life insurer because of the value they bring in non qualified deffered comp planning, SERPS, and buy-sell planning. Non statutuary actually is the best of both worlds between brokerage and captive...I have exclusive access to this company but can also offer any other product under the sun to meet my clients needs. With my payout with this mutual being 50% across the board but I get 100% when I use any other company...there is no incentive for me to point my cleints to this company whatsoever...I actually could make a lot more money just being independent! It's not about the commission in the short run for me though, its about doing the right thing and giving the client the best product. This will form trust with clients and a good reputation for me in my community.

Thanks to both of you guys for your feedback on not only this post but this forum...I've already greatly enjoyed reading your postings.

 

[ABC]

What services are you providing to these groups to pick up AOR's?

On your 30 life groups you should be in the ball park of about $12,000-$14,000 per group.

Here is the thing you must remember. Your GA has built up his groups to reach a higher tier of commission on fully insured. That does not mean you will that higher commission.

If your working per head you might get $15 and the GA is getting $21.

You need to sit down with your GA and what he is going to pay you and if he has tiers to higher commission.

Four 30 life groups on AOR's is sweat so the GA should be happy with you.

 

[CFP83]

ABC, Thanks for your great feedback-very helpful.

To answer your question, since I already had the relationship with these four business-owners I was able to present myself as the "quarterback" who is simply throwing to ball to one of the best benefit consultants in the area that they could sit down with. I flat out told the client that I am not a jack of all trades and master of none, I have no idea about the employee benefit world, but this other advisor and his team are exceptional at it.

One thing I found very interesting during his presentation was his explanation of how he works. He mentioned that he does not get involved in "quoting at renewal game". To paraphrase his approach He says:
"I meet with prospective clients throughout the year and interview for the job as a their Group Benefits Consultant. I have a team of 8 employees and even a nurse on staff to insure I service my clients with concierge-like treatment. If this seems like something you want, then lets sign the AOR, then at renewal we'll shop the market to make sure we have the absolute best product for your situation. We all have access to the same products and the same companies, people hire me for the relationship."

He actually began by factfinding and found that all four of these business-owners had never been explained the "triple tax benefit" of HSA's for their health insurance within the overall group plan. Pre-tax dollars, growing tax-deffered and coming out tax free. This was his way of providing immediate value and left the four asking "why hasn't my guy told me about this". Finally, my relationship with these four made it a seamless transition as this other advisor is viewed as an extension of my team and network of services I provide.

 

[warrenins]

CFP83
Thanks for sharing all of that with us. I'm particularly interested in your partners approach to business. I wonder if he would be willing to share some of his great sales pointers to agents that are not in direct competition with him. Say for example-Georgia haha
I love the idea of a "fact finding" session and have considered a formal approach but have not implemented as of yet. Thanks again

 

[kdr406]

Agents with clients in MD DC VA FL and GA .
Visit us for a list of products to meet your clients needs .
Request a quote in your name and we will pay you for your sales!
www.keybenefits.us

 

[ABC]

ABC, Thanks for your great feedback-very helpful.

"I meet with prospective clients throughout the year and interview for the job as a their Group Benefits Consultant. I have a team of 8 employees and even a nurse on staff to insure I service my clients with concierge-like treatment. If this seems like something you want, then lets sign the AOR, then at renewal we'll shop the market to make sure we have the absolute best product for your situation. We all have access to the same products and the same companies, people hire me for the relationship."

He actually began by factfinding and found that all four of these business-owners had never been explained the "triple tax benefit" of HSA's for their health insurance within the overall group plan. Pre-tax dollars, growing tax-deffered and coming out tax free. This was his way of providing immediate value and left the four asking "why hasn't my guy told me about this". Finally, my relationship with these four made it a seamless transition as this other advisor is viewed as an extension of my team and network of services I provide.

I like the way you phrased it as being the quarterback and passing the ball to a benefit consultant.

Your GA also has a good pitch. To emphasize customer service and having a nurse on staff sounds good. That is the best AOR pitch I have heard. Hell, I am going to put that in my tool box.

If I was in your shoes with your established clients I would ask for 30% of the commission from the GA yearly. Then settle for 20%.

Also If I were you I would interview some other GA's as a leverage and back up.

Great post thanks for posting.

 

[CHUMPS FROM OXFORD]

kdr...you may want to check out the "Offers" section.