Celebrating Advice: Using group plans to build referrals

By Mark Noble | January 11, 2010 | Last updated on January 11, 2010
4 min read

Howard Fergusson, has more hot prospects to grow his individual business than he can possibly serve, thanks to building up a solid group benefits and retirement planning practice.

Fergusson, a CFP and Toronto-based advisor affiliated with Sun Life, is one of the dealer’s top producers, and he credits a large part of his success to building a robust group benefits practice alongside his individual focused line of business.

Of the more than $200 million in assets that Fergusson’s practice oversees, roughly half are in the hands of employees of his primary business owner clientele.

His two companies, Howard Fergusson Insurance Agencies and Benchmark Benefit Services, serve 2,200 clients, comprised most of business owners and their employees. Fergusson tells Advisor.ca, when he started his business, he made a conscious effort to personally prospect business owners. The group business organically sprung out from there, since owners often need benefits and retirement service packages, which many advisors overlook.

Now Fergusson has created two reciprocal streams of income, with other advisors prospecting group plans, and in doing so, sometimes bringing new revenue streams of individual business to his retail firm.

“Our target market are people who own businesses, people who have sold businesses they have created and people who are planning to own a business in the future. The products we offer have a special favour in those circumstances,” he says. “Of our 2,200 clients, we build our business exclusively by referral. Some of the people do not build their own businesses, but it might be employees of the companies we have.”

Fergusson says his firm has the personal connections with business owner clients to out-perform competitors on service, on either individual or group plans. Usually success in one area will win over business in other areas.

“If we are providing them with one product we introduce them to others. Our service levels are so high, that eventually we get a shot at every other line of business,” he says. “Every time somebody adds a new product from us, our service level goes up and eventually we become very difficult to get rid of.”

Fegusson says it’s important that senior advisor/firm owners recognize the value of superior service on both sides of the transaction. He goes out of his way to reward associate advisors that help grow his firms’ businesses.

“We do not lose clients, and we don’t lose employees. No employee is going to leave our team because they can be paid more somewhere else and no client is going to leave because we get out-serviced,” he says. “We treat each of our group clients as if they were our individual clients. They get birthday cards, they get surveys asking how we are we doing, they get regular calls and we give them quarterlies on how their plans are doing well.”

Fergusson points out that, on the group side, he’s not exclusively offering Sun Life products. Using an in-house benefits specialist, his firm works as a fiduciary to get their clients the best group plan.

Howard Fergusson

“Sun Life is a spectacular partner of ours, but we have other companies and they are all interested in working with us. When we bring a client to them they’ll be keeping it for a few years. We’re not in the business of changing group plans [if they work for the client],” he says. “I want to stress it’s not just me [selling]; we have relationships with some of the top guys in the country to help us work with the clients. Anybody that comes and works with them is appropriately compensated.”

One challenge Fergusson has come across using this business model is managing its growth potential. The businesses Fergusson’s firms serve have more than 5,000 employees, an impossible number to serve on his own. However, statistics suggest a massive rollover of group assets in the coming decades, which could potentially fall into the hands of advisors.

It’s hard to find enough competent new advisors willing to work this potentially lucrative line of business.

“Your success in this business becomes a limiting factor, because the more success you have, the more people you have to serve and after awhile you have to change. Most likely we’ll have to get bigger, because I’m not looking forward to getting smaller,” he says. “We have more than 5,000 employees in our group plans. There is no way I can get out and see them all. We could get some pretty dramatic growth there if we had more salespeople going forward.”

Fergusson says community service plays a big part in success for a young advisor. Throughout his career, he’s been involved in numerous amateur athletic associations and charities, not to mention the chair of Advocis’ Pension Reform Committee. He notices those advisors finding early success are those getting involved with the communities they serve after hours.

“The successful ones are at their hips into their communities. That ranges from social services and coaching sports for their kids. When I see successful people, you see they’re either involved in the community, or at the very least their spouses are involved,” he says. “This is a very difficult business to establish yourself in, doing things like coaching baseball or soccer, helps you decompress as well as network.”


Mark Noble