If your client roster includes owners of small to medium-sized businesses and decision-makers at bigger firms, you could be overlooking opportunities to tap the lucrative group benefits market. Why not convert some of those individual clients into group business?

A large pool of underserved medium-sized companies are looking for benefits programs that are easy to manage and that will help them attract and retain employees, say advisors and executives in the group benefits business. Yet, only a small percentage of advisors are serving this market.

Many small and medium-sized business owners, who are always looking for ways to attract and retain talent, simply don’t know they can provide employee benefits, says Jim Krovats, an advisor with RBC Dominion Securities Inc. in Winnipeg.

“Almost universally, the business owners want to provide group benefits,” says Krovats, who used to operate a company in the construction industry, and understands the challenges of business owners. “But it’s also universal that they think benefits are only for big businesses. I try to demystify that.”

A good start in converting a book of individual clients into group business is to make it known that you can provide that expertise, Krovats says. Most clients assume group benefits are a different line of business from individual insurance. They may not know that their personal advisor might well be qualified to provide an ideal group benefits package.

Next, identify individual clients who are potential group clients, such as small-business owners or those authorized to make key decision in their organizations. Which of your clients might influence a decision to purchase group benefits?

Gil McGowan, regional vice president for group retirement sales and services at Desjardins Financial Security Investments Inc. in Toronto, used to pose the following question to advisors at group-sales seminars: “Is there anyone in this room who has a client who works for a company?”

It is, of course, a rhetorical question, designed to indicate to advisors that they all have potential group clients on their books. On a roster of 300 clients, McGowan says, 10% may be either human resources executives, general managers or other decision-makers within their companies.

“That’s 30 people and, at least, you now have a warm contact,” says McGowan, who worked as a group advisor himself for a number of years before moving on to several positions in the group benefits industry.

McGowan recommends asking the following questions during your discovery process with prospects and during annual meetings with clients:

> Do you have a benefits plan?

> Who is your benefits plan with?

> What type of plan is it?

> Who is the carrier?

> Who administers the plan in your organization?

These questions ensure clients know you’re interested in that side of the business. The answers provide you with information that will identify potential prospects.

And, Krovats says, as an advisor, you already have a lot in common with business owners.

“Most advisors are entrepreneurial, and they understand the bottom line,” he says. “You talk to business owners and they all say the same thing: ‘Keeping employees, particularly good salespeople, is a challenge’.”

The case for group business is especially strong in the western provinces, in which unemployment rates are low and retaining skilled employees poses a special challenge for employers.

“When you have high turnover,” Krovats says, “you have to keep doing things to retain employees.”

He already has a couple of group clients and hopes to close a few strong leads he has been working on throughout the summer.

According to McGowan, with experience, you will learn to identify where group opportunities lie — and where they don’t. For example, you might not be in a position to compete with a big pension-plan consultant if your client’s organization is already dealing with one.

You might also find that group RRSP plans for which the employer does not make matching contributions are not worth your time; participation rates in these plans are often low.

“You’ll be lucky if 10% of the employees are participating,” McGowan says.

On the other hand, if the employer does match contributions, employees have an incentive to join the plan and the business may be worth your administrative time.

Gaining access to decision-makers in organizations is often the biggest challenge, McGowan says. But, when you do, potential business can drop into your lap, he says: “Those are the gems you want to find.”

@page_break@Brian Burlacoff, an advisor with Sun Life Financial (Canada) Inc. in Toronto, agrees. He operates a separate group practice called Benchmark Benefits Solutions Inc. with several business partners in Toronto. He grows his benefits business simply by offering better service to organizations that have been underserved by other providers.

“It’s not often the issue that the client has a bad product,” says Burlacoff. Most big benefits providers — including Sun Life Financial Inc. and Manulife Financial Corp. — have strong offerings. It’s more likely, Burlacoff says, that the account is not being looked after properly.

Burlacoff makes a point of asking clients about group plans held externally. One client, a psychologist in a medium-sized practice, revealed to Burlacoff recently that her defined-contribution pension plan investments had been left dormant in a money-market account for four years.

“You don’t want to be negative,” he says. “So, I simply asked her if anybody had come into the office once a year to ask her about her investment options.”

Burlacoff’s strategy may soon pay off. Benchmark is in a good position to take on that group business — 40 health practitioners with up to $5 million in total assets.

For group life and health business, he adds, often simply asking clients if they’ve ever been offered newer products, such as critical illness insurance, will pique interest as well.

Sponsors and advisors alike are often concerned that administering group benefits plans will be onerous, says Kim Buitenhuis, vice president of marketing and communication with RBC Asset Management Inc. in Toronto. The major providers, for their part, do all they can to take the administrative burden out of the employer’s hands. That’s part of the benefit they provide.

“We have the relationship with the sponsoring company or organization,” she says. “We make sure they have everything, from a regulatory perspective, and then we make sure that all the individual people within the plan are anchored at the right place — at [related companies] RBC Dominion Securities Inc. or Royal Bank of Canada, or wherever.”

That process ensures that advisors aren’t saddled with a lot of smaller accounts they can’t possibly service, but also that the employer-client and his or her employees get the service they need. IE