Why advisers must move from 'retailers' to 'guardians'

Editor's note: this is the first of a year-long monthly series of commentaries on fiduciary governance.

U.S. commercial healthcare has become a $1.3 trillion extractor of corporate and household capital. For decades, the American employer has been positioned as the primary funding source for a system that has grown increasingly efficient at generating complexity and decreasingly efficient at delivering value. This structural inefficiency has resulted in a "leak" in the corporate P&L — a waste margin of roughly $4,000 per employee, per year. 

I recently presented this data during my keynote at the You Powered Symposium where the focus was on our industry's systemic failure to address this specific leak. The reaction from brokers and advisers who attended confirmed a widespread professional fatigue: the legacy brokerage model is no longer designed to solve the problems it claims to mitigate.

This observation was further reinforced during my recent work advising a foreign government on a massive healthcare sustainability project. Across both domestic and international markets, a universal truth emerged. In a nutshell: commercial friction — the hidden tax paid to intermediaries whose success is decoupled from the client's success — is an epidemic. To reclaim that $4,000-per-employee leak, the industry must move beyond the "retailer" model and toward what I like to call a coalition of defense.

The $4,000 per employee leak

The 2024 financial data for U.S. healthcare indicates that employers and employees spent approximately $1.3 trillion. An estimated 25% of that total — over $325 billion — is attributed to systemic waste, including administrative bloat, unmanaged clinical inefficiencies and the opaque structures of pharmacy benefit management (PBM) spread pricing.

For the average employer, this represents a structural leak of roughly $4,000 per employee, per year. While a 25% waste margin in any other corporate department would trigger an immediate forensic overhaul, the benefits industry has historically conditioned employers to accept these figures as "uncontrollable costs."

If benefits advising intends to meet the growing demands of employers and survive as a profession, we must fundamentally change our value proposition and revenue models to address this reality.

Embracing a new role

Traditional benefits brokers operate as retailers. They represent the "shelf" of a major insurance carrier, selling pre-packaged products within an ecosystem built on the status quo.

The primary challenge here is a structural incentive gap: when an adviser's income is tied to a percentage of the premium or "market-derived income" via hidden overrides, the producer is effectively penalized for fixing the client's problem. If an adviser cuts a client's healthcare spend by 20%, it results in a 20% pay cut.

This creates an environment of "renewal theater" — an annual ritual where advisers "fight" for a 9% increase instead of a 12% one, while their own revenue grows alongside the client's loss. In this model, the adviser is clerking a transaction rather than managing a strategy.

Trust is a byproduct of transparency. Embracing a "guardian" role rather than a retailer replaces the transactional model with a professional services framework. By operating on a transparent, flat-fee basis, advisers are compensated for the specialized expertise and administrative rigor they bring to the table — not the volume of insurance they move. This shift moves advisers from "vendor" to "partner," ensuring their primary loyalty is to the employer's long-term strategy and patient's clinical outcomes rather than a carrier's bonus pool.

A vendor litmus test

After quantifying how the employer is performing in the seven key categories of benefits value, identifying goals and developing a roadmap to achieve them, a guardian's primary job is to assemble a coalition of defense. A curated selection of subcontractors — TPAs, PBMs and clinical-oversight vendors — that have abandoned inflation-based revenue models.

To lead this coalition, the guardian's process of identifying goals and developing a roadmap is what helps the employer progress through the Health Plan Maturity Model (HPMM) outlined in my book "Fixing Healthcare." The HPMM provides the strategic framework for transforming a health plan from a passive "cost center" to a strategic "asset." 

Assembling the coalition of defense is the crucial execution step in this journey, ensuring that all partners (TPAs, PBMs and clinical oversight vendors) are aligned with the employer's goal of reaching the most advanced and sustainable levels of the HPMM.

To be part of this coalition, a vendor must pass a simple litmus test: "Does this revenue model benefit from the employer's success or waste?" If it's the latter, a guardian vets them out.

This shift from retailer to guardian is the difference between buying a product and installing a governance engine. A retailer hands the client a renewal; a guardian hands them a Fiduciary Governance Protocol (FGP). Under ERISA, the federal government has effectively deputized employers as fiduciaries. If they are paying $4,000 per employee in waste and haven't established a formal protocol to find it, then they aren't just overpaying; they are potentially putting themselves in legal jeopardy. Benefits advisers who refuse to act as a "small-f" fiduciary — aligning every incentive to the bottom line — represent a quantifiable liability to their client's board.

The new fiduciary shield

Transitioning from a retailer to a guardian allows an organization to move beyond simply purchasing an insurance policy and begin installing an FGP. This shift is a direct response to a strengthened legal mandate.

Under the Consolidated Appropriations Act (CAA) of 2021, the regulatory landscape has fundamentally changed. By mandating fee transparency and prohibiting gag clauses that previously obscured claims data, the law places the duty of care squarely on the employer's desk. As the final arbiter of the plan's "reasonableness," the employer is now legally required to maintain keys to the kingdom — complete access to the data and fee structures underlying their spend.

This environment mirrors the transformation of the 401(k) industry two decades ago. For a CFO or HR director overseeing a plan with a $4,000-per-employee leak, pleading ignorance over these costs is no longer a viable defense. In this landscape, an adviser who refuses to act as a small-f fiduciary — providing the transparency and financial alignment the law demands — is a liability to the board.

Clarity is the antidote to fear

The annual renewal crisis is a symptom of a governance vacuum. When an employer is kept in the dark, it is forced to make defensive, short-term decisions. Over the next 12 months, I will lay out the framework for a new standard of care — a sequential masterclass that moves beyond the reactive cycle of shopping for insurance and into the actual governance of a multimillion-dollar corporate asset.

The $4,000-per-employee leak is fixable, but it requires a coalition of defense that many legacy advisers are not equipped to build. As federal law raises the bar for fiduciary accountability, the retailer model has become a risk factor. The question for every peer reading this is simple: Will you continue to retail the status quo or choose to become the guardian of your client's future?