Helping brokers to demonstrate their value

Do your customers sometimes struggle to understand the true value of the cover that’s arranged by you and provided by their insurer? As a broker, how do you demonstrate the customer has received "fair value"?
 

The Fair Value Framework, established by the Financial Conduct Authority (FCA), aims to make sure that all financial institutions provide fair and transparent value to their customers. It's a set of principles designed to empower customers by helping them make informed decisions about purchasing financial products and services.

Here's where you come in. Many brokers have historically focused on price as the primary value proposition. However, the FCA's Fair Value Framework encourages a more holistic approach; considering not just the cost, but also the features, fees, services and potential benefits associated with an insurance product.

If you feel you could benefit from an additional way to justify your fees and demonstrate the value you bring to your customers, Alphatec’s Timebox product could help. Alphatec is one of our broker proposition partners and here’s some more information from them about the service.

How Alphatec's Timebox can help brokers demonstrate value

Timebox can help you monitor where time is spent at each stage of the customer journey and deliver clear and concise reports that could help you demonstrate where you add value for your customers. It can assist you in creating robust Fair Value Assessments by:

• Identifying true costs - it provides a breakdown of costs associated with an insurance product, including all fees and administrative expenses.
• Comparing products side-by-side - you can use Timebox reporting to compare different insurance products, side-by-side, highlighting the nuances and variations in value across them. This can help with making accurate fee and rate calculations based on selling specific products.
• Going beyond price - it can help you evaluate aspects of value beyond just price, including the level of service you offer, allowing you to better position products to your customers. 

Meeting the FCA's expectations

In February 2024, within its publication “Consumer Duty Implementation: good practice and areas for “improvement “the FCA highlighted that some firms struggle to justify their remuneration proportionate to the work they do, reminding us that firms must be able to explain their remuneration practices. Timebox allows you to create tailored assessments that reflect the characteristics of a product, its target market and the amount of servicing you provide with it. The FCA emphasises the importance of considering non-financial costs and benefits when considering ‘Fair Value’ and Timebox can help empower you to show the value of your services, helping to evidence the impact of time and resources invested in recruiting, training and supporting the staff who service your customers, justify your fees, and demonstrate a clear rationale behind pricing structures, commissions and additional charges, with data and reporting to evidence your commitment to customer support, and achieving good outcomes.

In today's competitive insurance market, demonstrating value is crucial for brokers. Leveraging tools like Alphatec's Timebox, could help you move beyond price-centric conversations and engage with customers on a deeper level, fostering trust and long-term relationships.

Want an endorsement?  Peter Robinson, the Managing Director of Prizm Solutions Ltd has been using Timebox since 2012 and says;

“All staff members record the time spent on everything they do, and that includes me, the MD. The detail includes time spent on tasks, travelling to visit clients, associated expenses, telephone calls, etc. This enables us to see the REAL cost associated with every client, product, and insurer. Then, when we run our reports, if we see for example, that 20% of our income comes from A, and the true accurate cost to realise that income is 10% – we know this is profitable. This software tool allows us to continually monitor the bottom-line profit, not just the top-line turnover. Being able to drill down on the true costs enables us to make informed decisions”

^{This article contains general information and guidance. It is not intended to be specific advice and should not be relied on as such. It may not cover every risk, exposure or hazard that may arise and we recommend that you obtain specific advice relevant to your circumstances. We accept no responsibility or liability in respect of any person who may rely upon this article.}

^{*The cost of calls to 01 prefixed numbers are charged at national call rates (charges may vary dependent on your network provider) and are usually included in inclusive minute plans from landlines and mobiles. For our joint protection telephone calls may be recorded and/or monitored.}