Consider the following scenario: John Smith starts working for a large life insurance agency in Oakland, Calif. After a few years, he describes his specialty as estate planning, employee benefits, financial planning, pensions and business planning. Though John is not a specialist in any of these areas, he doesn’t know it–so the myth goes on.

Three years into his business, he leaves the agency to work independently, serving small to medium-size businesses with from 10 to 50 employees. He does mostly group insurance benefits and life insurance planning with the owners and key employees.

Later, he comes to a realization: Affluent business owners require the best advice in many specialized areas, and to compete successfully, he has to pick one concept that he can learn more about than anyone else and stick to that discipline to the exclusion of everything else.

Because he had done most of his business within group benefits, he chooses to work only within that area. Now the problem is how to walk away from other products and services without losing his group business to whoever begins managing his clients’ 401(k) plans.

A common experience

Many of us in the insurance business take the same career track. The industry’s business delivery system has changed more in the last five years than it had in the previous 20. The distribution channels are very different from those into which most of us were recruited and trained.

Today, if you hold yourself out to be a specialist in estate planning, then you better know how your products work and when it is appropriate to use a GRIT, GRAT or CRUT. How can we provide affluent business owners with all the things we used to do for them, plus expert advice and service, while maintaining control of the client and having an income stream that is meaningful and fulfilling for us?

In my business, it seemed the answer was to grow my company from a business doing only qualified plan administration and executive benefits, to one that provided all financial services. I went on a hiring spree, added lots of space and told our clients we now had departments to help with not only retirement plans but also estate and financial planning, property-casualty insurance, human resource advice, group benefits–you name it.

The only problem was the people I hired were not as good as the entrepreneurs who own their own businesses and do estate planning and group benefits as their specialty. After a year of little success, my company downsized to doing retirement plans again, but I did not forget the idea.

Almost three years ago, I was introduced to someone who successfully had put together a company that he took public that did almost what I envisioned. He retired from that business for three days and decided to do it again. With the help of others, we founded a company to bring together partner firms to do all the financial services needed by successful small- to middle-market companies (those with from 25 to 500 employees).

Though all I do is deal with qualified and nonqualified retirement plans, I am happy and driven to bring in experts to do payroll, workers’ compensation, group benefits, human resources consulting, property-casualty insurance, worksite marketing, estate and financial planning, banking, etc. We are all partners by written agreement, and we share revenue as long as we are properly licensed to do so.

We have an employee who acts as a facilitator to encourage partners to refer clients, as appropriate, to one another. The partner who brings in the client acts as the point person and generally provides the single point of contact with the client.

We have bundled products and services to give us a market advantage. For example, combining payroll services with 401(k) plans allows us to reduce the client’s time spent on providing employee census data to us. And it eliminates the client’s need to write a check to the plan’s vendor whenever a payroll is done; now our payroll company does that, saving the client and my company time and money.

To illustrate the importance of this concept, which I call SingleSourcing, consider the following example. One of our salespeople made an appointment with the CFO of a well-known business in our area with about 100 employees. We discussed SingleSourcing, which thrilled the client. He recognized that a single point of contact for managing workers’ compensation, 401(k), p-c, payroll and voluntary benefits would save time, energy and money compared to his experience up to that time: dealing with six unrelated and sometimes competing firms.

Summing up

SingleSourcing is a concept whose time has come. It is not easy to pull together, but when done properly, it provides an elegant solution for your upscale business clients and you. And think how happy John would be knowing his group benefits clients are getting expert care from the partners with whom he is now associated.