Benefits Broker vs Benefits Consultant

Boker vs Consultant

To the general public the topic of "Broker vs. Consultant" is of little concern and for the most part, misunderstood.  The underlying sentiment is they are virtually one in the same.  The purpose of this blog is to enlighten people of the subtleties between the two, displaying the impact these small differences actually make.

To describe the difference in the broadest terms possible, it would be advice.  A broker, by definition, is an individual or firm who acts as a facilitator.  Their function is to access the market, create competition among the insurance companies and use market pressure to control benefit providers.  This approach is widespread throughout the insurance industry with the brokerage concept being less sophisticated than that of a consultant.

General practitioner vs. medical specialist

A good analogy would be the differences between a general practitioner and a medical specialist.  Both have a role to play within their industry but one cannot provide all of the functions of the other.  Typically speaking the differences between a consultant and a broker lies within the detail, whether that is in areas of strategic planning, analysis, or benefit related governance.  The consultant's role is more advisory in nature, interpreting data, solving problems and offering recommendations.  The process should feel less sales-driven and more consultative, not too dissimilar than an accountant or lawyer. 

As a general comment, the larger the client the greater the need for detail, thus they tend to use consultants.  Having said this, no employer (large or small) should operate outside the concept of best practices.

full disclosure

The last significant difference to be considered before making the choice between a broker or consultant is transparency.  One would think the practice of full disclosure would always be used, but sadly this is not the case and is not an area mandated by the Alberta Insurance Council (or any other province).  As a rule of thumb any information, with the exception of individual medical information, is available to the client inclusive of of remuneration which is typically disclosed in the renewal analysis by consultants but still seems to be taboo in the brokerage community.

In summary, employers need to be more aware of what's available for their dollar and ask the hard questions of their current providers. 


benefits broker

Complete access to markets

Some disclosure

Some governance

No actuarial systems

Commission based

Minimal reporting

benefits consultant

Complete access to markets

Full disclosure

Strong focus on governance

Actuarial systems

Commission based or fee for service

Superior reporting

Industry Benchmarking

Strategic Benefits Planning

Dispute Resolution