Chances are your broker could be costing you money.
Enter Daniel, a friend of mine, who also happens to be a broker. Over drinks last week, he inquired about exactly what Dinsmore Steele does. Now, you are probably thinking, “how does your friend not know what your company does, especially considering he is a broker?” - fair question. It’s because I make it a habit not to do business with my buddies, but that is another blog for another day.
Back to Daniel, drinks and our conversation. I explained to Daniel what we do and as I told him, he asked, “How do you find your clients?” A weird question, considering there is never a shortage of companies that want to save money and considering that our service is free, well, you get the point.
Daniel brokers health insurance and workers’ compensation insurance for small businesses and there are millions of other people doing the same thing as Daniel. As we talked, he explained how competition is tighter than ever and that he is always challenged by his clients to lower their rates, find better benefits, reduce their renewals and do more service for them.
Because I am also a broker, I understood his dilemma but didn’t have the same challenges he does. So I asked him, “Do you ever talk to your clients about PEOs?” Looking at me, Daniel said, “Umm, no, why would I want to lose control of my clients and get paid less?”
That might surprise you, but it’s a true and common refrain from brokers. Daniel, just like you, me and everyone else, performs a service and expects to be paid for it. No shame there, but what is shameful is that Daniel, like many brokers is not focused on adding value to his clients.
Why, you may ask? Because of two reasons. The first reason is fear. Fear of losing his customers and losing his revenue. The second reason being that he has been doing the same thing for years and wasn’t open to doing things differently.
Which brings us to the topic of this post. Is your broker costing you money? We can’t answer that question as it relates to your company specifically, but here are some warning signs:
- Your broker never suggests exploring alternatives that can consolidate your providers, simplify your processes and save you money.
- Every year your broker brings bad news, in the form of large renewals and increased premiums.
- Your broker’s plan to mitigate your cost is to raise deductibles, drop coverages or cut benefits.
- Your broker has never mentioned or introduced a Professional Employer Organization (PEO) Model.
- You find that, every year, your broker suggests changing insurance carriers.
These are the most glaring signs that your broker is leaving you broken. Ask yourself if any of the above is happening and, if it is, realize that while you may like your broker, you are running a business and in business money is paramount to survival. A good broker will view your relationship as a partnership, offer fresh ideas to make your life easier and continuously add value.
In founding DS, we made it our mission to do what’s best for our clients. The health benefits industry players know us well and they know that we expect transparent pricing and no surprises. While PEOs aren’t new, there are still providers who operate like Daniel- always looking to add fees or, worse yet, charging fees based on a percentage of gross payroll.
It’s a really bad idea to have an operating expense directly tethered to growth when there’s no increasing benefit to the client. We don’t and won’t even entertain a proposal from a provider with this type of fee structure, but the providers already know this about us.
If you’re working with a “Daniel,” perhaps you’re willing to give us 15 minutes to explain how we work and how we can help your company?