WINDSOR, Conn., Oct. 9, 2013 — Ninety-four percent of small businesses believe the need for an outside advisor will increase or stay the same in the next two years, according to a recent LIMRA study.
In particular, LIMRA found that firms with 10 to 24 employees, companies that are still establishing themselves, and those that are actively looking to expand are most likely to see a need for an advisor in the next two years.
"According to the U.S. Census Bureau, 98 percent of businesses in the U.S. have fewer than 100 employees, accounting for approximately 35 percent of the U.S. workforce (40 million workers). Yet only half of these companies use an advisor for business or personal needs regardless of whether they offer benefits to employees," said Mary Boyce, associate analyst, LIMRA Insurance Research. "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. However there is room for improvement, as 4 in 10 small businesses were neutral with regards to satisfaction with their advisor. The top reason small business employers gave for eliminating their advisor was cost. Generally speaking, employers believe the advisor's role is transactional rather than as an advisor.
The survey found that employers relied on their advisors for a variety of services. The most important services include reviewing their plans to ensure that the rates are competitive and services are current and reviewing the renewal rate adjustment to ensure it is competitive (chart).
"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," noted Boyce. "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."
LIMRA, a worldwide research, consulting and professional development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.