before making a final decision. Large and mega dealer groups have options that are more complex, too. Within these structures, different programs are offered to meet a wide variety of objectives, such as: • Planning for retirement • Funding charitable giving activities • Including employees to help motivate, retain and share in the dealer’s success • Establishing succession planning, where employee(s) or family member(s) build their wealth in the program to generate funds for future ownership opportunities • Providing assets for business acquisition/growth • Funding facility upgrades/construction of new facilities • Gaining wealth and fund retirement • Extinguishing operational debt Identifying your short- and long-term priorities and goals is key to selecting the right programs. SELECTING AN ADVISOR Advisors come with their own set of financial interests. Be cognizant of those interests and be willing to temper a strong sales pitch. If the advisor will benefit from the selection of a provider, then you may want to consider a second opinion to ensure the evaluation is truly objective. Due to the complexity of many of these programs, finding an advisor that will keep your specific interests a top priority is key. An advisor should help you evaluate the relevant variables to ensure you select the best structure. For example, if your operation is smaller and growing, you should have a plan that contemplates that growth. Although fees are important, they must be evaluated on the level of service anticipated for operational considerations to drive product penetrations consistent with your overall goals. Consider that the true concern should be who will help you sell the most products for maximum profitability. A lower fee program may not be the best option for generating the most revenue. The best choice should be one that can help you drive millions of dollars into a reinsurance program that has considerable tax benefits. Choose wisely. Contract length and terms could keep you in an agreement for 10 years or more, with an advisor who may not have your best interest at heart. NEXT STEPS AFTER YOU HAVE A PROGRAM IN PLACE It’s essential to pay continued attention to your program and stay informed about how the program is developing. Ask for recommendations to help maximize results and inquire if there are any changes you should make. Also, monitor trends like frequency and severity of loss and 30/60/90-day claim that could have an adverse effect on your program’s performance. Make sure your consultant provides updates on any changes in tax law. You can end up making costly mistakes if someone without the right level of expertise is managing your program. Finally, evaluate structures and programs based solely on your own goals and objectives. You may like how a peer runs their operation or you’re seeing their success; however, it is crucial to keep in mind that their program was customized to meet their objectives, which could be quite different than your own. Make decisions about your reinsurance program the same way you would any other decision you make for your business. Steve McLaughlin is Area Sales Manager in Philadelphia for Zurich North America. He can be reached at 610.716.2609 or via email at stephen.mclaughlin@zurichna.com. 41 N J C A R . O R G new jersey auto retailer
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