I have written many times about my conflicted feelings over many of the conversations brokers/advisors are having online and at industry conferences. I love the energy and excitement around so many of the new trends: value-based insurance design (VBID) and transparency of compensation, in particular.
What frustrates me so often is the picture some advisors try to paint. They are taking such an absolutist approach and imply that this is the only way they work and that they always have worked this way.
Will the real motivation please stand up?
I appreciate the energy and their willingness to share ideas, but I don't feel their message is as persuasive as it could be. I believe the content itself, and especially its delivery, becomes self-defeating. Of course, I say this based on the assumption that they are working to help build others up and not working to build their ego and reputation.
I know you’ve seen the messages.
“We NEVER work with the BUCAHs (BCBS, United, Cigna, Aetna, Humana).”
“Our ONLY compensation is the fees we receive directly from our clients.”
I feel guilty that I question their motive but, being honest, so many of these posts, articles, and presentations come across as self-serving chest-beating. Rather than helping to educate the industry, the goal of the messages appears to be to impress their peers.
It’s hard to believe
Don't get me wrong; there are great ideas and successes stories they are sharing. The problem is that their absolutist approach and have-always-done-it-this-way tone keep the message from being heard. Their extremist position makes many of the ideas seem unapproachable for the vast majority of the industry. Too many feel they aren’t capable of participating in these trends.
Here’s where my frustration reaches a crescendo. It is the extremely rare broker (even among this extremist group) who doesn’t still have business, usually significant business, with BUCAHs and who doesn't continue to receive revenue, often significant revenue, from those same policies.
Even when there is that unicorn of a non-BUCAH, non-commission broker, it is quite often because they have backed themselves into that corner by losing their appointments as a result of the extremist viewpoints they share online. The carriers, most often, are the ones that made the initial decision to not work with the broker.
The messages you see online are usually these brokers playing spin doctor, revisionist historian, and not fully disclosing their reality.
I won't say that they don't exist, but I never have, to my knowledge, met a broker who has always had a non-BUCAH, non-commission model. Most approach this as their ideal scenario with a client and have gotten there over time.
A healthier narrative
You may very well disagree with me, but here is the narrative that I believe would help everyone move in the direction the industry needs to go. I think everyone, mainly the individual advisor telling the story, would benefit more from the following message. I believe prospects and clients hearing this story would be more confident in an advisor sharing this story.
I started my career as any other broker, competing on a spreadsheet filled only with BUCAH options. It didn’t seem that bad because, well, that’s just the way the industry worked.
We'd go to every carrier, ask for every option, do everything we could to talk the incumbent carrier to a lower renewal, and then brag to the client about how much we had saved them (compared to the original renewal). When we weren't able to get the incumbent where we wanted them, we moved the client to another carrier.
I hate to admit it, but for a very long time, I avoided discussing my level of compensation from those options with my clients. I knew this was a discussion I should have but, because I’d never had such a conversation, the idea of transparency scared the crap out of me.
As my experience grew, my knowledge also grew broader and deeper. I joined a networking group, attended industry conferences, and started participating in online conversations.
I was deeply troubled to learn just how broken the fully-insured system had become; I struggled with my role in that system. I was, embarrassing to admit, so surprised (and excited) to learn that there were many other options I could offer my clients, most of which had been hiding from me in plain sight the whole time. Solutions that allowed me and my clients to break free of the limitations imposed by the fully-insured carriers, solutions that made it much more comfortable for me to discuss my compensation with prospects and clients.
As much as I would love to say that I have eliminated my dependence on the BUCAHs and their compensation formulas, that's not the reality in every client situation. However, I feel good about the progress I have made.
Most of the time, my ideal strategy for a prospect/client involves self-funding and, increasingly, a further unbundling of traditional self-funded plans and an introduction of creative new approaches. If at all possible, all of our compensation on a given account comes through the client. Many times, we tie our compensation to the performance of the plans we put in place.
While I approach every client relationship from an ideal structure, my committed goal is ALWAYS to do what is in each client's best interest and put the solution in place that makes the most sense for them and their current situation. I always take the time to explain their options and why I feel my recommendation is in their best interest.
As frustrating as it is at times, some clients are more comfortable moving into new ideas than others. Even when a client likes my recommendations, some require a more extended transition period to make the necessary changes.
I understand, more than ever, the broken aspects of the BUCAH plans, but I also believe they still serve a critical role for specific clients. Sometimes they are the right transitional answer for a client, and sometimes they are just the best answer available for a client, period.
While more of our compensation still comes through these fully-insured plans than I’d like, the one thing we can control is full disclosure of what we receive on each client, something we ALWAYS do.
My level of excitement for the future of this industry builds daily. My confidence in the impact I can make on the businesses of my clients has never been greater. I'm not sure what creative new solutions tomorrow has to offer, but I know I have surrounded myself with industry leaders that will help ensure my ability to bring them to my clients.
This is an example of the type of narrative I'd like to see more of online and hear at conferences. When I hear someone telling this type of story, I don't focus on where they started. I find confidence in their honesty. I am curious about where their evolution will take them next. I want to learn more from them.
When I hear the oh-so-common absolutist message of NEVER writing a BUCAH plan and ONLY working on fees, well, I don't hear the message because I stop listening.
I stop listening because I don't believe what I hear. Sure, I likely miss some fantastic ideas from that rare unicorn who is telling a completely accurate story, but that’s a chance I’ll take.
I would prefer others take that same chance along with me to avoid being exposed to half-truths and rare examples being told as everyday realities. A fake reality that feels unapproachable to most and leaves way too many feeling defeated, inadequate, and unprepared to participate in the most exciting era this industry has ever experienced.
Photo by bnorbert3.