I have come to realize, the person who controls the payroll, controls the group/employer. ADP and Paychex understand this and that’s why they are now delving into the group insurance business.
Recently, I received a marketing piece in the mail from Fidelity Investments, promoting the fact they are venturing into the payroll business. Fidelity is sending this advertisement to Financial and Investment Advisers with the ultimate goal being to acquire the group’s 401K account. I was amazed that Fidelity is promoting they would handle the employer’s payroll services AND 401k.
Now, insurance brokers and agents find ourselves in a quickly changing marketplace. Large corporate players want our group benefits, property and casualty business, and 401k business because they know, in order to gain control over all these products, they must control the payroll.
So, what is the answer to protect our way of life? We must educate ourselves and learn the ins and outs of the payroll business. Some brokers, in the past, have referred their employer groups to payroll services, only to receive a small commission. After all, payroll services are rather inexpensive compared to medical insurance. Unfortunately, that horse has left the barn. Either we get involved, learn the payroll business, and assist in implementation and training, or we sit by and watch the large corporate payroll services take our hard-earned business.
We have something the big guys can never have; a personal relationship with the client. The large payroll services have paid marketers who tell your client how they can simplify his or her life and that they provide great service. Unfortunately, after the sale, they turn your employer over to their service team to answer questions on the phone. That marketer is off to the next customer and your client will never hear from them again. They only for the initial sale, not renewals.
You know this customer and know more about their business than you probably realize. Why put your customer in the hands of someone who only cares about the bottom line? Protect your business by educating yourself, or someone in your organization, on the benefits of offering personalized payroll services.