If employers use a broker to find benefit providers, a good relationship is essential, says Sam Barrett
A broker can offer significant advantages when it comes to arranging employee benefits. But although their experience, support and access to the most competitive terms and prices can be invaluable, employers need to ensure they have the best possible working relationship.
Finding the right broker for their requirements is key to an employer getting the most from the relationship. Karen Barrett, chief executive of professional advice sourcing website Unbiased.co.uk, says: “Do research and see an adviser that specialises firstly in business advice and secondly in the areas of advice [employers] are seeking for their firm, for example tax or pensions.”
As well as having the right qualifications and experience, a broker should also be someone with whom employers can build a good working relationship. Ian Luck, director of employee benefits at Smith and Williamson Financial Services, says: “It is perfectly acceptable to ask several brokers to pitch for the business. Ask for references and get a feel for how they would work together.”
Once appointed, a broker will need to have as much information as possible about the business and its employee benefits requirements. “A broker can only give advice based on what it knows about a business, so be as open as possible and make sure you tell them as much as you can that is relevant,” says Luck.
Matters that employers should discuss with a broker include their previous experiences of providers, especially if these were particularly good or bad; their objectives in providing benefits; and their organisation’s growth plans, because these can influence which benefits a broker recommends.
Katharine Moxham, spokesperson for group risk industry body Group Risk Development, says employers should understand the service they are buying from a broker. “There is a price for the job and there is usually a reason why one broker is much cheaper than another,” she says. “Make sure you understand who will be looking after the account, especially in terms of experience, and the level of service you will receive with regard to meetings, and so on.”
More complex requirements
Advice to staff Although employers may need to see their broker only once a year for simpler products, such as cash plans or insurance perks, if their requirements are more complex, it is important to establish a good relationship. “Relationships are key for both the employer and the broker,” says Moxham. “If a broker understands what is happening within an organisation, it can react to change.”
She recommends meeting at least once a year, but suggests more frequent meetings where contracts are larger or more complex, or if something significant is happening, such as an acquisition or major expansion. For example, Luck explains when he is installing a new benefit, he would seek a weekly meeting with the employer, even if there is nothing new to say, simply to keep everyone involved in the process.
But although a good working relationship is the ideal, Luck says employers must feel they can complain if necessary. “Most brokers want to do a good job,” he says. “If something is not right or was not what [the employer] expected, tell the broker. It will probably want to put it right.”
Questions to ask a broker
The following questions can help employers determine whether a broker is right for their organisation’s benefits requirements:
- What qualifications does it have?
The Financial Services Skills Council website (www.fssc.org.uk) has details of the qualifications brokers can take.
- What search criteria does it use when placing business?
- What volume of business does the broker place?
This will give an indication of the negotiating power that the broker has with providers.
- Does it run a provider panel? If so, how are the providers selected? And how often are they reviewed?Many brokers set up provider panels, allowing only those that meet their criteria to be on them. Employers should ensure they are happy with how these providers are chosen.
- Who will look after the account?
This could be someone different from the person the employer first saw, so they must be sure they can work with them.
- Which other organisations does it deal with and can these provide client references?
- What happens if employers are not happy with the service they receive?
Read more articles on Special report 2009: benefits procurement