Twenty-five years after graduating university, I can reflect on numerous client interactions as an Analyst, Group Representative, and later as an Independent Adviser. Employment does not equate to competence, so whether I add any more value to the client relationship, more so than my counterpart at another benefits firm can only be answered by my clients.
Judging by similar locks of grey I see at seminars and functions, my experiences in the benefits industry is not unique. Over the years, some of the more aggressive competitors have acted like ‘crabs’ to pull down advisers in their quest to gain a competitive advantage, but in the last couple of years it has not been those firms but rather so called, HR technology firms who are looking to take down the advisory profession.
Listen, I get it. The benefits industry was ripe for change. For decades, advancement in technology meant coming up with a smart phone app. Going paperless even has been a 10 year long project. So while terms like “on-boarding” is used by US companies with sophisticated systems, the benefits industry in Canada, continues to rely on paper enrollment and refuses to create meaningful interfaces between Insurers and Payroll Providers. If it ain’t broke, don’t fix it, and certainly don’t invest in the infrastructure to fix it.
In the interim, Insurers continue to pocket millions in administrative savings from the use of online administration systems that made hundreds of back office administrators, previously responsible for supporting member changes etc. redundant. With plan sponsors responsible for additions, terminations and other changes, accuracy goes up and calls to the Insurer goes down. Yet, most Canadian Insurers have failed to invest in technology or infrastructure so as to be a leader in Insurtech.
So, the Industry was ripe for change and we can thank Zenefits and other HR based platforms for bringing innovation to the marketplace. Increasingly, smart software engineers with the right amount of seed capital or funding are attempting to turn this industry on its head and it is working.
Insurers who chose not to invest in technology over the last 20 years, through their investment subsidiaries are now heavily investing in these HR tech companies in an effort to remain relevant. Companies such as Power Corporation, Sun Life and RBC have secured cozy relationships with these companies to hedge their bets on a digital transformation that they dare not miss. Their previous complacency has left them vulnerable and rather than innovate, at this point they can only provide the backing to more nimbler startups.
As an advisor who has been witness to the ‘glacial’ pace of technological advancement in the benefits industry, I too perhaps am culpable. Perhaps this gives license to the ‘culling of the heard’ mandated by almost all HR Tech firms who seem to see my involvement in the benefits equation as an impediment to the operation of their business and perhaps more important, a lucrative IPO to monetize granted stock options.
Recently, I read a US publication where an advisers message to the small business market she serviced was this, “we are actual insurance advisers, and not a software company with an insurance license. You’re going to get the expertise, access to the market, and the personal touch because we understand your space”. This adviser later went on to say that all of the bells and whistles technology that is available by way of technology firms, are also solutions that her team is quite capable of bringing to the table. This message resonated with me and I think it is worth noting.
When did advisers become the hunted. That was the question I asked myself after watching a video from one of the more well know technology companies. The video was intended to provide their prospects with information on ‘evaluating one’s broker’. (I actually prefer the term adviser, but if broker conjures up the image of bloated indifference then I guess that is fine). Months earlier, before a ‘pivot’ by that same firm, they had thought the broker/adviser channel was infact a market that they wanted to pursue but I suspect this strategy was abandoned after push back from the advisory community who on mass refused to support unrealistic growth targets that if not met resulted in contract termination and a loss of all future revenue from the client the advisory previously brought in. Whatever the case, this firm is now squarely focused on the B2B market.
I am not entirely sure, going alone is the right long term move for that technology company, because after listening to the initial adviser roadshow, I recalled thinking, wow this is fantastic technology, but these folks can hardly spell Group Insurance, how are they going to consult clients on how to manage their compensation budgets?
Whose vision of the customer will ultimately triumph is above my pay grade. If the experiences of fin-tech is any guide, even large robo advisers have had to employ numerous ‘humans’ with ‘real life experiences’ to provide millennials and others with investing advice. Technology was an asset but not the full solution; so far.
Algorithms can no doubt scan textbooks, review legal judgments, perform low level AI functions, but to say they can replace a professional’s knowledge and know-how, I believe is a stretch right now in 2017. Technology is just another resource to help professionals more proficiently manage their client relationships.
In an advisory practice it is difficult enough to understand the various tax codes and human rights decisions and legislation in context of changing attitudes and HR trends. But it’s the interplay of these various structures on employee benefits that make our job unique. To suggest that a technology application can more effectively provide meaningful guidance to a plan sponsor; well, I am not convinced. Clearly, if an adviser is adding zero value and is a dinosaur that barely does enough continuing education (rather than 4 times the required) then yes, that adviser is ripe for ‘replacement or culling’.
Speaking of ripe, the industry is ripe for a shakeup. Insurers have to do a much better job of investing in meaningful technology to provide customers with a paperless, electronic experience, that quite frankly is overdue. A move by CLHIA and perhaps government to stimulate the use and acceptance of electronic signatures would be the catalyst of much needed innovation and would spell the end of paper enrollment forms for beneficiary designations.
To those technology firms, specifically HR tech, that are giving away free vacation scheduling, on-boarding and HR platforms to clients in the hopes that they will ‘fire their brokers’, I get your message, but I don’t see why my 25 years in the business is suddenly worth nothing because your version of “HAL 9000” says so.
On a recent trip to Vegas, I had the opportunity to use an AK47 assault rifle, but on a range and under the competent watch of a trained instructor. I quickly realized that putting a loaded gun into the hands of someone not trained could easily have deleterious and unintended consequences. Just as Google remains a great place to obtain medical reference, much of the information is biased and is not vetted. So, using this information to self-diagnose and self-medicate is probably a bad idea.
HR platforms relying on code and software engineers to navigate the minefield of labor management, employment equity and changing legislation is to me, that same AK47.
Not all my clients see the value in covering pet food and unlimited wellness as a perk for which the employer must provide funding. To suggest that after massages, paramedical, and dental expenses that an employee has the ability to fund a specialty medication with limited out of pocket “pain” is a stretch for me. For an invincible generation of millennial type employees who have just entered the workforce and have not been witness to sickness up close, they will certainly have a particular view of what is relevant to them and that is OK. My job is not to argue with that view but to support the plan sponsor in making sure that the benefits program is congruent with the philosophical views of the company who is paying the bills. If taxable wellness accounts is a priority to that plan sponsor, then it will be part of the solution we put in place.
Alas, not all technology firms mandate a replacement of the advisory channel, some notable firms in particular (one in Calgary Alberta and another in Vaughan Ontario), continue to see the value in advisors as a part of their service delivery model. For the sake of the industry, I hope those two firms have made the right bet.
To their credit, Zenefits and the like have forced advisers and perhaps Insurers to review processes that quite frankly had become stale and to advance the consumer notion. “Customer experience” which is itself a buzzword today had always taken a back seat but because of these new market entrants (so called disruptors) customer experience is squarely in focus. If nothing else disruption or disruptors can take credit for forcing the advisory business to review and update processes that are outdated. As for me the, Independent Adviser, my message to HR Tech, I am not the prey! If you look closely, beyond the IPO and stock option, you will notice that I am wearing the same neon orange vest as you. Maybe if we work together, we can spend less time hunting and more time feasting.