Nearly 60 percent of employers expect to have greater reliance on brokers over the next five years, according to LIMRA’s The Future Is Now — Workplace Benefits Distribution Amid a Changing Landscape report — a data point that is not lost on investors allocating capital to the space.
What consolidation means for plan sponsors
For HR directors and benefits managers, the consolidation wave raises a practical question: what happens to your advisory relationship when your broker is acquired?
McMurtrie was direct about the risk. When an acquisition is not managed well — particularly around communication — it is the employer client who feels the disruption first.
“If you’re not communicating, the market is going to communicate on your behalf, and their message is not going to be the positive one that you want going out there, both to your clients as well as to your internal producers,” he said.
The good news, McMurtrie argued, is that well-run acquisitions should ultimately improve the advisory capabilities available to plan sponsors. Private equity’s rationale for consolidating benefits brokerage platforms is precisely to invest in technology, data analytics, and artificial intelligence tools that smaller independent brokers cannot sustain on their own. When integration is done properly, employers gain access to centers of excellence for complex plan structures — stop-loss, fully funded, level-funded, and ICHRA programs — that a local or regional broker may not have had the scale to support.