Avoid the fate of the “boiled frog”*
Active Brokers for Organisational Employee Benefits arrangements engage regularly with a range of variables: Risk Funding; Retirement Funding; Administration; Costs; Investments, Member Education. They add substantial value for employers and make distinct, sometimes dramatic lifechanging differences, for members.
Effectiveness of longstanding Employee Benefits funds tend to erode over time when no active Adviser is involved. We have experienced situations where the Broker had passed away and not replaced or was missing in action despite being paid regular commission, or where the engagement was always directly with the Product Providers.
The pain, not felt until it hits, tends to be serious when it does and too late to fix. Neglect and sloppy management by employers and their HR Departments frequently result in severe consequences and lapses: For example incomplete / out of date Beneficiary Forms of a member who suddenly passes away with resulting delays, disputes, even non-payment of benefits to beneficiaries who should qualify; medicals required for cover above the risk free rate not completed, where the member becomes disabled and is underinsured; members not aware of cover that they qualify for and therefore don’t claim for cover that they are entitled to, with consequent financial hardship experienced. And that is only Administration! Active Brokers kick the tyres each year, conduct a full review and lift the game on overall scheme design; transparency; costs; investments structure. Employers and members typically don’t have the capacity, interest nor expertise to deal with these challenges effectively. Product providers frequently don’t focus on individual organisations. Sponsors, Principal Officers, Umbrella Fund Boards of Trustees comprehensively cover a range of key matters: Investments; administration; compliance; governance; taxation. Curiously there is precious little written about the role of Brokers.
“* When water is brought to the boil so slowly that the frog gets used to the warmth, it doesn’t jump out in fright & gets boiled alive.”
Conclusion
The absence of a competent Broker creates a silent, significant risk within the Risk & Retirement Fund ecosystem. Without proactive oversight, regular active intervention, bridging between relevant stakeholders, and member education – opportunities for “lifting the game” are missed and lapses are incurred that undermine the very purpose of these funds: to provide financial security.