Which is better: red wine, or white wine?
While you might have a personal preference, the fact of the matter is there’s no single, objective correct response. The same is true when we talk about administrative services only (ASO) versus traditional group insurance – it ultimately hinges on the client’s wants and needs.
There’s no one-size-fits-all approach to benefits solutions; understanding client needs is paramount.
Client Needs and Risk Tolerance
It’s one thing to say that you need to understand client needs; it’s another thing entirely to actually do it.
At the end of the day, it comes down to conversations. Are you discussing the intricacies of your client’s business? Do they understand the benefits promise they want to make for their employees? Are you asking future-based questions to determine their values, and where they’re headed? If you don’t know where they’re going, you can’t help them get there, after all.
Risk tolerance is another big factor when it comes to client needs. However, it can be difficult for many people to grasp or quantify.
Consider asking your clients or prospects about other aspects of their lives. Do they show up hours early for a flight, or do they arrive at the airport at the last possible minute? What are their car insurance deductibles like? How much damage needs to occur before they make a claim? These analogies help to open the door to a meaningful conversation regarding risk tolerance, which significantly influences which benefits plan is right for them.
Consider the Business Owners’ Perspective
Business owners often express discontent with insurance companies. As an advisor, you know this.
They’re skeptical about the value of certain benefits (we’re looking at you, dental insurance), and there’s a lot of confusion surrounding renewals. The frustration is compounded by rising insurance premiums, leaving many business owners questioning the worth of traditional insurance solutions.
Profitability plays a pivotal role in decision-making. Profitable companies prefer making informed, long-term decisions, valuing their employees’ abilities and expertise. These companies invest in their employees, recognizing that a well-designed benefits plan can enhance employee satisfaction and retention.
Customizing plans to suit different staff compositions, for instance, is crucial. Those at the executive level typically do best with 100% unlimited plans, while professional staff, seasonal workers, and full-time employees have varied needs. Rewarding longevity, considering family content, and addressing language barriers are essential considerations when creating a comprehensive benefits plan, ASO or not.
Myths and Misconceptions about ASO
Misconceptions about ASO plans abound. Many believe that ASO leads to fluctuations in monthly contributions, lacks risk protection, and doesn’t allow for cost control. In reality, it’s all bogus.
Contrary to popular belief, ASO plans offer robust cost-sharing options with employees and maintain stable claims experiences. They can also implement pharma controls and special authorizations, debunking the myth that ASO plans lack oversight.
In truth, ASO can offer far more flexibility in plan designs, which is perfect for meeting those client needs we discussed earlier.
Long-Term Benefits of ASO Solutions
ASO plans provide clients with the freedom to make promises that make sense to them and budget effectively. By understanding the flexibility and control ASO offers, clients can ensure they never overpay or underpay for their benefits.
The flexibility in plan design that ASO offers is unmatched by the rigid systems of traditional insurance companies. ASO creates the foundation for ultimate plan design flexibility, accommodating diverse needs within a group, from executive plans to hybrid plans.
Long-term relationships with clients become more stable and profitable as the need for frequent marketing diminishes (even though we all love sales, we can all agree it’s nice to build long-term, happy clients).
Transparent monthly financial reporting and ongoing conversations ensure clients are always informed, eliminating surprises at renewal time. Remember, “bad renewals” only occur when the client is blindsided.
Find Success with The Benefits Trust
Understanding and addressing client needs leads to long-term profitability and satisfaction for both clients and advisors. Who doesn’t love a win-win? By fostering informed, transparent, and flexible benefits solutions, you can cultivate lasting relationships with your clients.
For advisors seeking more resources and support, contact The Benefits Trust. We’ve got over 30 years of experience under our belt – let’s work together to create tailored benefits solutions that satisfy you and your clients.
