The roles of broker and consultant are not mutually exclusive. One may possess and exercise both skill sets simultaneously. Like personality traits, one is more likely preferred over the other as a matter of business choice driven by market needs. Small group brokers may have the skills to consult, but the need may rarely be presented in the natural course of business in this market segment. Consultants may have the skills to broker insurance policies on behalf of their clients, but may prefer to deal in high level change consulting. The question of deductible and premium interaction may not be as fulfilling as designing or revising a wellness incentive program. Thus, the consultant may be a broker, and the broker a consultant. It just depends on the need of the client. In practice I have found, though, that it mostly works the second way and rarely the first.

Another distinction between the two is the method for compensation. Brokers are more likely to favor commissions while consultants more often want fee or retainer arrangements. One method of compensation is not necessarily more favorable than another. Compensation arrangements tend to be driven by client need and the skill set of the advisor. It all boils down to "…and how do I get paid?" For example, a client may need services only for a specified period of time. Paying an advisor in this capacity may not justify the award of ongoing commissions. In this case, a simple fee-for-service may be more appropriate. Ultimately two things determine the method of compensation for brokers and consultants, the scope of services being rendered and the relationship of the client and advisor.

This analysis has broad implication for many stakeholders. A client may think he needs a consultant when a broker is more appropriate. A competitor may cast you as "only a broker" to highlight his stellar consultative skills. Ultimately it's about you as the advisor. Your skill set is the key. Upgrade your education and training as much as possible. Finish that designation. Demonstrate that you have done more than the minimum to succeed in the business. The days of simply renewing the business from year to year are quickly ending. The advisor of the future will need honed transformational skills that complement time-tested transactional skills to thrive.

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