Industry Insight from Fred Barstein
Creating a Full Service Benefit Shop

In times like these, it only makes sense to leverage all the assets we have as much as possible and the most valuable asset is our relationships with clients.  Believing that it’s easier to sell a new product to an existing client than sell an existing product to a new client, healthcare advisors should consider selling retirement planning and retirement advisors should think about healthcare.  Here are some mistakes and lessons that we have seen when trying to create a full service employment benefit shop.

Mistake # 1: Hire a newbie, convert an inexperienced associate or turn your successful healthcare advisors into retirement advisors or vice versa.

To be successful in the retirement or healthcare market, one of three skill sets is understanding the technical nature of healthcare or Erisa plans.  It can take quite a while to even get up to speed never mind become an expert that can convince a plan sponsor to abandon their current advisor or decide that they need to hire an advisor rather than go direct.  By the time an inexperienced advisor gains traction, you will be frustrated and have spent too much money with very little return.

Mistake # 2: Expect that your current healthcare or retirement advisors will willingly introduce a new person to their clients.

No one works for free and very few sales people go out of their way for the good of their firm in the long run without some immediate return.  Most important, until the new person is trusted, your current advisors will be reluctant to introduce somebody that could potentially disrupt their current relationships.

Mistake # 3:  The new person will be good at all things and does not need support.

Along with technical expertise, a successful advisor has to be a good sales person and must be able to manage a book of business.  Most people totally misunderstand what makes a good sales person which is not just the ability to speak convincingly and eloquently.  A sales persons’ job is most difficult when they have no one to talk to so a good sales person understands how to bring in prospects on their own.  The same person who has the ability to bring in new business may have some technical knowledge but will most likely not have the patience to manage an existing book of business which differentiates a hunter and a farmer.  There are very few that can do all three well and most likely that person is building their own practice and will not want to work for anyone else – in fact this person is probably calling on your clients right now.

Not that you understand what not to do, here are some suggestions on how to be successful.

Lesson # 1: Hire the right person.

If the choice is between a good sales person and a patient, knowledgeable advisor, hire the latter.  You already have the warm introductions with your current client base so why hire someone who likes to go out and hunt on their own?

Lesson # 2:  Make sure that person is given proper access to your clients.

Remember that the experienced advisor needs sales support which translates into meaningful introductions to current clients and follow-up to get to the close.  Unless there is a staff sales person, which most smaller organizations cannot afford, that means that the principal must assume that role and only they cross borders and speak with all the clients of the firm.

Lesson # 3:  Finding the right person.

There are a lot of very good Erisa and healthcare experts in the market that do not have the sales talent to find their own clients.  They may be attached to a TPA or a retirement advisory practice; they may be working for a 401(k) record keeper, broker dealer, healthcare provider; supporting a wholesaler or may even be a wholesaler who is tired of traveling four days a week.  Though they may not be good prospectors, they must have the ability to connect to your clients by having superior knowledgeable, a passion for the business and are entirely believable.

Hiring, supporting and mentoring the right type of person to cross sell your practice could be the best investment you could make.  Not taking advantage of everything at our disposal in these tough economic times means more than losing the opportunity to expand a business; it could mean the difference between who survives and who is left to explain what happened.

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