The third day of the 2020 PLANADVISER National Conference featured an enlightening keynote address from Joseph Coughlin, Ph.D., director of the Massachusetts Institute of Technology AgeLab.

Coughlin’s virtual presentation sought to help advisers better understand how they can help small business owners be more efficient and cost effective, identify knowledge gaps to be aware of when communicating with them, and better engage and serve them and their employees. The presentation was based on a series of in-depth, in-person interviews with a wide variety of small business owners conducted by the AgeLab’s research staff.

One notable fact about the sample of small business owners is that each of them had at some point worked within much larger organizations. This allowed the AgeLab researchers to probe the degree to which the experience of the small business owners, in trying to create and operate their own employee benefits plans, differed from their experiences in a larger company.

Coughlin noted that, in an interesting way, the experience is apparently not that different.

“You might think that is a good thing, but in fact it is not,” Coughlin said. “You have to understand that these small business owners have nowhere near the amount of resources that large companies can devote to employee benefits. Thus, they are frequently disheartened when providers or advisers come in and address them as if they were a large corporation with dedicated human resources staff. The needs and wants are really very different.”

Coughlin highlighted how the small business owners interviewed said they frequently were pitched products or services designed for “corporate clients,” even though they were not corporations.

“This is a red flag for them and it shows you don’t understand their business,” Coughlin warned. “We learned that it’s very easy to alienate a small business person if you go in and speak to them as if they are a corporation. It is so important that you demonstrate that you understand the size and structure of their business.”

A very common theme in the interviews was small business owners being given too much to read.

“Of course they appreciate and want transparency, but they want even more to have the time and freedom to run their businesses,” Coughlin explained. “They want advisers and providers they can trust to get everything right without constant oversight. Also, we saw that the lack of operational knowledge on the part of advisers about their businesses really irked many of the people we interviewed.”

For example, pushing to get a dentist practice to do a big benefits change in November or December is not a good idea, because that is by far the busiest season for dentists. An adviser also shouldn’t call on a restaurant client or a retail shop during lunchtime or the middle of the afternoon. 

Coughlin concluded by offering the following checklist for advisers working with small business clients:

• Know the company and the industry. When are they busiest and what are their most pressing business dynamics?
• Know the owners’ personal life details and why they founded this business.
• Know what the legal, accounting and tax implications that come along with their specific business structure. Are they an LLC? A sole proprietorship? Etc.
• Know the employees, who are more often viewed as family than staff in these organizations.
• Know that they really, really don’t want to be a benefits manager.