In the UK’s Employee Benefits Insurance market, there are few insurers that will allow companies to buy insurance directly from them. Because of this, seeking financial advice when taking out an Employee Benefits insurance policy is highly advised.
But we don’t expect you to do anything just because it’s advised, so here is a more detailed explanation of why you should use an Employee Benefits broker rather than a financial adviser or generalist broker.
To save everybody time, we have also answered a couple of the most common questions we get asked by our clients.
What is an Employee Benefits Broker?
An Employee Benefits Broker is someone who specialises solely in employee benefits, rather than being a financial adviser who dabbles as and when. These brokers are there to advise business owners specifically on their company’s employee benefits requirements.
Every company is unique, so when reviewing a company’s employee benefits package, a market leading employee benefits consultant should review all of the following points at a minimum:
Businesses have certain obligations to their employees depending on what was agreed in their initial contract negotiations.
Employee benefits brokers should be asking questions such as whether or not the employees are entitled to death in service insurance, what the companies sick pay policy is and if the business has any TUPE contract requirements (a protection of employment in the event that the business owner changes). They should basically be trying to learn anything that will help them to understand what risks the business faces.
Once a broker has identified the risks listed above, they can review group life insurance for death in service, group income protection for sick pay requirements and any TUPE agreements in place that the business is liable for.
Attract and Retain
It’s no secret that great employees make great businesses, and employers in the UK need to ensure they are doing everything they can to attract and retain the best talent in their industry.
Annual benefit reviews with an employee benefits consultant can help you stay ahead of your competitors with an enhanced employee benefits package.
We recently conducted a study into employee benefits, and found that over 20% of employees desired some type of financial benefit such as income protection and health insurance.
With the right employee benefits broker advising your company, this desire can become a reality.
Key Person Dependency
Several businesses have key person dependency, ranging from a salesperson who exceeds targets year on year, a director with key relationships, or an industry expert with outstanding technical knowledge.
Whatever role this person is in, an employee benefits broker can look to soften the blow to the business if they were to suffer an accident or sickness and be unable to work.
An employee benefits broker will use their professional knowledge to support, consult and advise your business on a multitude of needs.
Should I use an Employee Benefits Broker or my IFA?
We haven’t gone into business to put down our competitors or say who should be selling what in the industry, that is down to the FCA and governing organisations.
However, what we do want is to ensure that people are getting the correct advice and are not overpaying due to inexperience.
At Hooray Health & Protection, we only offer insurances in the health and protection industry; no investments, no pensions and no other insurance products. We focus on what we have specialised in for most of our careers.
If you are considering taking employee benefits insurance through an independent financial adviser, ensure that they have experience dealing with these specific products before obtaining quotations. Also, for peace of mind, benchmark with at least one other firm.
How do I choose the right Employee Benefits broker?
Easy, use Hooray Health & Protection!
No, I’m joking. As much as we would love you to use us, we suggest that you do some research online first. Read reviews, for example. They may have hundreds of five-star ratings, but if they are all for commercial insurance – that doesn’t help.
Choose two brokers and request information from both. Insurers are obliged to provide the same price to brokers, so quotes aren’t always needed, but it’s good to talk through your options and learn about the employee benefit broker’s technical knowledge.
Benchmarking brokers has the added advantage of comparing fees, to ensure you’re not being overcharged.
We have heard of clients being charged £10,000 in fees when their insurance policy only cost £3000 and took less than a day to administer, so always ask what your fee and/or commission is covering, as market leading employee benefit brokers will always be happy (and obliged) to tell you.