Health Reform Not Expected to Dampen the Need for Advisors

Ninety-four percent of small businesses say their need for an outside advisor will increase or stay the same in the next two years, according to a recent LIMRA study. “While the new public and private exchanges will eliminate the need for many of the administrative functions that advisors perform, such as requests for proposals, helping both employers and employees understand the options available within and outside the exchanges will be a new way for advisors to grow their business,” said Mary Boyce of LIMRA.

Companies that are most likely to see a need for an advisor in the next two years are those with 10 to 24 employees, those that are still establishing themselves, and those that are looking to expand. According to the U.S. Census Bureau, 98% of businesses in the U.S. have fewer than 100 employees, accounting for approximately 35% of the U.S. workforce. Yet only half use an advisor for business or personal needs regardless of whether they offer benefits to employees. Mary Boyce of LIMRA said, “This presents a huge opportunity for advisors who are able to demonstrate their value.”

Half of the employers surveyed who use an advisor said they were satisfied with their advisor. But there is room for improvement, as 40% of small businesses are neutral with regards to satisfaction with their advisor. Cost was the top reason small business employers gave for eliminating their advisor. Employers rely on their advisors for a variety of services. The most important include reviewing their plans to make sure that the rates are competitive and services are current and reviewing the renewal rate adjustment to ensure that it is competitive. For more information, visit limra.com.

Last Updated 10/21/2020

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