This blog was originally intended to be for a company on why you need an Advisor, but it morphed into why WE (myHSA) choose to work only with the Advisors and not direct with the business clients. In the tech space, saying you need an intermediary sounds very odd; but in the benefits space, it’s not. Early on when we were talking to venture funds for investments, they were always completely baffled as to why we were not trying to cut Advisors out and going direct. To be honest, it turned most people completely off. We tried to explain to them how the industry worked, but most didn’t care to understand it as that was not “disruptive” enough to move the needle. We have never deviated from Advisors for many reasons:
They have most of the relationships today with the small to medium-sized business clients we seek. There are a lot of small advisory firms that cover a massive geographic area of Canada, and they are deeply rooted in their certain location. They are part of the community and know many of their clients personally. A salesperson on a video call from Calgary talking to a 10-person company in Perry Sound, Ontario that will need to fire their Advisor is a hard sell. I think Advisors sometimes do not give themselves enough credit, that although they are not united, they have a lot more power collectively than they realize. There is a reason some of the largest insurance companies in the world still use this as a distribution strategy.
We are a niche product. We have always known where we slot in with an Advisor’s business. We are one product available as a solution…but not the only solution. We have always said it is not an insurance vs spending account conversation. Clients will have different views and needs, and it can be a mix of both. You need advice on ALL the products for a business to find the right fit for their employees. Neither is wrong.
Advisors are great at customer service. We think we are pretty good at it, but we constantly find that the Advisors and their staff, for the most part, are very good at staying connected with the client. So, between our communication and interaction via chat and email, it complements the advisor’s in-person and phone call abilities. It helps our model succeed but it also makes the Advisor look good if we uphold the same level of high customer service.
Advisors drive new sales. Since the nature of our industry is commission based it allows a truly “kill what you eat” scenario. There is always an appetite to find new sales and look for new strategies to implement for existing and new clients. It also has been a blessing being a digital company in a somewhat archaic industry where many of the younger Advisors gravitate toward our model and are eager to share it with prospects.
Being loyal to Advisors has paid off. Many new entrants either try to “disrupt” the supply chain and cut advisors out, or they want to go direct and through Advisors. Being disrupted, Advisors do not take to kindly to this. Working both direct and with Advisors’ I think is also tough as you plant a seed of doubt, that one day you will just drop Advisors and go all in on direct once you have big enough market traction. Some have done this which did not prove fruitful. In our experience, if you stick to the Advisor channel, many Advisors are very open to not only placing business but help with growth by making industry introductions and giving great insights on how to make the product better. If you are smart enough to listen, it can be very rewarding.
When we were broke and just starting, I wanted so badly to at least try the multichannel to go both direct and through advisors; we saw others doing it. We needed any revenue so badly and, in our business, you need a substantial number of clients to make any sort of decent revenue and I could not see the forest through the trees. It was Tim who was always adamant about sticking with the advisor-only model, and now I am so glad he did.
It was a running joke when it was just the two of us at the beginning, that we needed to go through advisors and I had to have good customer service because if we failed I would be going hat in hand to some of them for a job!
COO & Co-Founder