After reading a recent article from ACCESSWIRE.com, I’d like to take a deeper dive into what all this consolidation activity means for you. Regardless of a new group acquiring your firm, we can almost guarantee that you are going to receive the same group with the same capabilities you had before acquisition. If you realized year over year price increases, decreasing of benefits, and the same carrier options, what difference are you hoping to expect now that they are part of a larger group?
All the large acquiring firms have the same resources. Have you conducted a true review of how they are different? Do you understand who is best positioned to help your firm and why? Have you investigated why so many private equity firms are in this space?
With the No Surprises Act and compensation disclosure requirements forthcoming, don’t be caught off guard if you see some of these companies move you to new account teams or “streamlined” technology services where you get less personal attention. Once you see how much they have been profiting from your company and where their compensation comes from, you will likely be shocked. However, don’t feel like you are alone, they are doing this to ALL their customers! Work with a trusted and transparent advisor that will tell you what it costs to handle your account, how to best consult your unique needs, and a cost-effective way to grow your business. When you compare it to the money grab that is benefits brokerage, you will have a better and more complete understanding of who has your goals and best interests in mind and who doesn’t.
How much independence do you think these firms have once they are acquired? They will most likely assure you that nothing will change, however, I would not wait to see what happens a year from now because what you are experiencing now will be a carbon copy of what you will see in the future. The growth requirements for new businesses are the key to them maximizing their earn-outs with a new company so you will receive the “status quo”. You will begin to see quickly that you are dealing with the same people only with new rules to play by utilizing the same tools and practices that existed pre-acquisition. Don’t believe the smoke and mirrors of “new technology” promises.
Every broker claims to have a “relationship” with their clients. One question to ask yourself “in what other relationship do you constantly receive less while paying more and you are somehow benefiting from that relationship?”
If you were to ask your current broker for a breakdown of their compensation package against the services they provide, do you think they would openly provide it to you? The good news is that due to the No Surprises Act you won’t have to ask for a breakdown of their compensation package against the services they provide BUT hold onto your seat when you see how much and how these companies get paid to have you as a client. It is no wonder the key “partnerships” they have are with the carriers versus true resources that add value to your business.
Pull everything apart, take a minute to digest, and then ask yourself why there is so much activity in this space by firms? Thankfully, there are still independent, transparent solution firms that don’t take excess compensation, contingent commissions, or production bonuses for combining as much premium as possible with certain carriers. THOSE are the true advisors in this business you should be partnering with, and I am willing to bet, provide all the same resources if not more than the names you are already familiar with. Perhaps it is time to seek out transparent, solutions-based advisors and companies that are truly aligned with your company goals versus just searching for name recognition. If you are a government contractor, this may be the difference between “staying in the game” and selling to a private equity group just to stay alive.
