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 the 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,” says 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 out of 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 various services. The most important 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).
For more information, visit LIMRA at www.limra.com.
By Ayo Mseka