In the UK Employee Benefits Insurance market, there are only a few insurers that will allow companies to buy insurance directly from them. Seeking financial advice when taking out an Employee Benefits insurance policy is highly advised.
Today, we’ll review why you should use an Employee Benefits broker rather than a financial adviser or generalist broker, as well as answering some of the most commonly asked questions we receive from our Clients.
What is an Employee Benefits Broker?
An Employee Benefits Broker (someone who specialises solely in employee benefits- not a financial adviser who dabbles as and when), is tasked with advising business owners on their company’s employee benefit requirements.
Every company is unique, so when reviewing a company’s employee benefit package. a market leading employee benefits consultant will review (but not limited to) the following:
Businesses will have certain obligations to their employees depending on what was agreed in their initial contract negotiations.
Employee Benefit brokers should be asking if the employees are entitled to death in service, what is the companies sick pay policy, are there any TUPE contractual requirements the business has, and much more to understand what risks the business faces.
If a broker had identified the risks listed above, they can review group life insurance for death in service, group income protection for sick pay requirements and review any TUPE agreements in place that the business is liable for.
Attract and Retain
It’s no secret that great employees are what makes a business great; 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 ensure you are keeping up with your competitors by providing an enhanced employee benefits package.
A recent benefit studies showed that 49% of employees wanted extra benefits that would save them money, with the right employee benefits broker advising your company, this can happen.
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 the role this person’s role 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.
Overall, an employee benefits broker is there to 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, as that is down to the FCA and governing organisations.
However what we do want to ensure is that people are getting the correct advice and not overpaying due to inexperience.
At Hooray Health & Protection, we only offer insurances in the health and protection industry; no investments, no pensions or any other insurance products, as we focus on what we have specialised in for most of our careers.
If you are considering taking an employee benefits insurance through an independent financial adviser, ensure they have experience dealing with these products before obtaining quotations, and for peace of mind, benchmark with another firm.
How do I choose the right Employee Benefits broker?
Use Hooray Health & Protection (it’s simples)… but on a serious note, however much we would love you to use us, we suggest to our clients researching online first, read reviews for example as they may have hundreds of five star reviews. If they are all for commercial insurances – 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 brokers 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 then 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 (obliged) to tell you.