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June 2020 Newsletter: When to Engage the Expert?

In late April, we hosted our 12th annual Group Insurance Symposium. We normally run this session live in Edmonton each April and again live in Calgary each October. This is a two-day event designed for those who make their home in the group benefits space to obtain their CE credits and share knowledge concerning group insurance and group benefits.

I am always impressed with the depth of knowledge of both the presenters and the attendees. We always try to get a diverse range of speakers, including group insurance product specialists, health care providers, and experts in related fields, such as cybersecurity or policies and procedures. Questions and discussion points from the audience are introspective, nuanced, and multifaceted.

While there were many professional and proficient folks in attendance this year, I want to highlight two of them:

  • Lori Power at MP Benefits is a group benefits broker with a long history in the business. Lori has sponsored the Symposium each year since its inception, and the original was her idea. Lori sets up co-broker arrangements with advisors who don’t do a lot of groups, and brings her substantial expertise to bear.
  • David Patriarche of the Canadian Group Insurance Brokers and Mainstay Insurance is another broker with a long history in this business. CGIB is the only broker-focused group that I am aware of in Canada. It provides a range of benefits, including a Slack channel where I routinely see complicated benefits questions answers within a few minutes of being posted.

This session always highlights the value of expertise. I often think to myself that if I were coming into the business today, I would only have three choices with respect to benefits:

  1. Find a few mentors and coaches and get as proficient as Dave and Lori are as quickly as possible.
  2. Find a partner like Lori to do the technical work and just manage the relationship.
  3. Stay out of the benefits business.

I do not think this discussion is unique to benefits. As the world gets more complex, the value of specialization is increasing. Similarly, I would not want to help my clients make investment management decisions. (A recent podcast guest, Steve Adang of Anchor Pacific Investment Management showed one way this can work.)

I believe that, to be successful in this business today, it’s important to choose a small number of areas in which to specialize, and to have a large network of experts to do all the work that doesn’t fit in your areas of specialization.

I do understand the trade-off that is implied. Using all these specialists means you’re paying them all, or at least not collecting the revenue from doing that work. This is where it’s necessary to work to understand how profitable a business can be with just a few lines of business.

From my experience, advisors tend to add more specialization (and more outsourcing) as they gain more experience. If I were newly starting into the business today, I would list all the functions that I might see a client requiring and choose a small number of those that I would be the provider for. For anything else on that list, I would look for a solution provider that I am comfortable working with, and whose financial model works for me and my clients.

It would be necessary to set some criteria for assessing what a given person wants to specialize in. I would leave this to each person to assess. A few years ago, I saw an excellent presentation by an estate lawyer who said, before taking on any project, it must, for him, meet 2 of the following 3 criteria:

  1. It must be interesting.
  2. It must pay enough.
  3. It must lead to follow-on work that also meets 2 of these 3 criteria.

I also quite like Derek Sivers’ approach to this. Derek tries to prioritize his time in advance of being asked to commit it:

Regardless of which approach you take, I think it’s worthwhile to ask yourself, “What do I want to work on or become an expert in, and what work is better sent to another expert?”

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