I feel the following assessment is fair because the Zenefits approach isn't really new at all. It's the same approach I've seen used by other brokers, and it's the same approach I have been criticizing for quite some time. As I identify the flaws in this approach, be honest about how many of them you have in your own model.

Flaw one

The first fatal flaw of so many brokers is pretending to be free. If "we're free" is your message, what happens when the carriers slash or remove commissions and your agency is suddenly faced with a revenue stream that is a fraction of what it once was, if it still exists at all?

Flaw two

The second flaw is the result of an approach myopically focused on a single, however valid, need of the employer. As soon as the employer has another need that becomes more critical, or once someone else creates a superior solution to that single need, that employer will once again be assigning a broker of record letter.

Flaw three

The third flaw is in a service center model. I'm not saying that in today's technology-driven world, there aren't services than can be delivered remotely. However, it is my belief that those services tend to be restricted to tactical and transactional. I also believe that a service center model would struggle to meet the strategic needs of the relationship. I have to believe that someone sitting in a cubicle with calls in queue will not be able to provide the same level of strategic advice and guidance as a local broker who has the time and ability to truly learn the business of the client.

Flaw four

The fourth flaw is in just how expensive a "free" solution could prove to be. Sure, there are many instances when, in terms of the insurance policy, the price is the price. However, in a typical transactional model the emphasis tends to be on speed and quantity. Often times this emphasis is at the cost of effectively establishing plan design strategy, implementing cost control measures, and in aggressively negotiating renewals.

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5 flaws to a Zenefits approach

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