Publications

- March 1, 2019: Vol. 6, Number 3

Class is in session: Wendy Benson, head of wealth management at MassMutual, learned early in life the power of financial information

by Mike Consol

Come back in time and travel with me to the town of Camillus, New York, an upstate community of industrious men and women who, today, we consider one of the many vertebrae that made up the backbone of America’s industrial might. These were largely blue-collar people who used hard work and determination to make their way in life.

For financial services executive Wendy Benson, these were also family members and the vivid memories of her youth. While manual labor earned a solid middle-class living for millions in those pre–Information Age days, the later years of life sometimes brought financial struggles to people who could have benefitted significantly from some longer-term financial guidance — the kind of insights far less available in those times.

Those are still more images from Benson’s youth, albeit with less adorned in primrose. It is one of the reasons why the head of wealth management at MassMutual also serves on the boards of a couple of nonprofits dedicated to financial literacy.

There is yet another reason why the head of wealth management at MassMutual emphasizes the need for financial literacy — it helps plant seeds among the young to consider a career in the financial advisory business, which is something that has been in short supply industrywide as the number of advisers, by some estimates, has plummeted from around 500,000 in the mid-1990s to 300,000 today. The reason is manifest, according to a recent EY study that found the average financial adviser is now 50, a number that has risen steadily each year, while only 22 percent of advisers are less than 40 years of age, and a mere 5 percent are in their 20s.

“We have focused on our ability to attract new advisers,” explains Benson. “We do some college recruiting, and we obviously try to recruit seasoned financial advisers, and then we also spend a bit of time with career changers and try to really demonstrate the opportunity in financial services. But I really believe that it starts with financial literacy very early. And our industry probably needs to do a better job of showing the career path into financial services and what some of the advantages might be.”

NEBULOUS BEGINNINGS

Benson studied business administration at the State University of New York at Brockport, figuring it was an expansive enough field to eventually find her way to a specific career. She graduated in 1986 at a time when mutual funds were the rage, and started interviewing during her senior year with organizations in Boston, Chicago and New York City, committed to taking advantage of the best opportunity available. That happened to present itself in Boston in the form of Boston Financial, a third-party transfer agent for various mutual fund companies.

“They were going gangbusters in the mid-1980s,” she recalls. “They offered me a job as soon as I graduated. I packed up and made my way to Boston.”

Having arrived in a new city without a single family member or friend, Benson ran headlong into the loneliness of isolation, a time she calls “probably the worst six months” of her life.

“I literally graduated from college on Sunday, moved to Boston on Monday, fresh out of college and living paycheck to paycheck,” she says. “But it taught me that if you give things some time, you put a lot of work and effort into it, sometimes you reap good rewards.”

Indeed, Benson lives in the Boston area to this day, and advanced her career by moving from Boston Financial to John Hancock, where she elevated herself to the rank of president and COO of the Signator Investors’ broker/dealer unit, and was responsible for managing the organization’s 2,000 registered producers, as well as providing oversight to all financial accounting, operational and compliance-related functions within the broker/dealer, and John Hancock’s retail agency system.

With the John Hancock brand name and financial power providing a tailwind, Benson was content to continue blossoming in place. Then came a phone call from John Vaccaro of MassMutual, based in the pastoral but suburban setting of Springfield, Mass. Benson was not thinking in terms of trading urban living in one of the country’s great cities for a far-flung township whose only real claim to fame is housing the Basketball Hall of Fame because it is the place where Dr. James Naismith invented the game.

“I quickly told him that I probably didn’t have a strong desire to work in western Massachusetts,” says Benson, who already knew Vaccaro through industry affiliations and conferences.

Undeterred, Vaccaro asked Benson to spend a day with him in Springfield and give him a chance to tell her the MassMutual story.

“I did just that and found that MassMutual was really going through a lot of growth at the time,” she says. “Almost 10 years later, here I am working in western Massachusetts and John Vaccaro is my boss.”

Technically, Benson lives about two hours away, in the Boston area, but visits Springfield regularly. The arrangement works well because of Benson’s proximity to Logan Airport, from where she travels often to industry conferences and to visit the company’s 9,000 advisers located in sales offices across the United States.

“For those folks who haven’t spent a lot of time in the Springfield area, it has got a lot to offer,” she says. “One of my concerns was whether we could find a lot of strong talent in the local area. I am pleased to say that we have.”

THE FINANCIAL TRINITY

The wealth management division at MassMutual is divided into three major operations:

  • A retail broker/dealer named MML Investors Services, which provides the product platform for client portfolios.
  • MassMutual Trust Co., designed to provide investment and trust services to the company’s highly affluent clients.
  • Financial planning, which draws on the investment and protection portfolios, and a holistic planning process.

It is the registered investment adviser through MML Investor Services, that has been at the heart of the company’s wealth management growth story.

When the portfolio calls for alternatives and real assets, MassMutual investment models favor publicly traded REITs and liquid alternatives, as well as some interval funds. Commodities are mostly handled via broad-based commodity mutual funds and exchange-traded funds, rather than single commodity exposures.

Benson was tentative about the notion that alternatives would occupy a larger percentage of client portfolios in coming years, suggesting that would likely be the case with high-net-worth clients who have more complex needs and adequate resources to place some of their assets in illiquid investment offerings, such as private equity funds, but not necessarily practical for the average client saving to buy a home or put their children through college.

Then there is the ever-present question of insurance. MassMutual — an abbreviation for Massachusetts Mutual Life Insurance Co. — is an insurance company, after all, with products ranging from life insurance and disability income insurance, to annuities, long-term care insurance and 401(k) retirement plan services.

“If you are truly going to be a holistic financial planner, then we really believe you need to do a holistic financial plan, part of which should be a review of any protection products that are in your portfolio,” Benson explains. “If you are still employed, you want to think about disability insurance to protect your income.”

MUTUAL INTERESTS

MassMutual was founded by George Rice in May 1851 in Springfield, Mass. Rice was selling policies for Connecticut Mutual Life Insurance Co. prior to that, and decided he wanted to open a similar company in Massachusetts, one that emulated the mutual model used by Connecticut Mutual. A mutual organization is based on the principle of “mutuality,” which raises funds from its collective membership, its customers, and those funds are used to provide services to all members of the organization — meaning the organization is owned by and run for the benefit of its members rather than shareholders, and therefore is not under pressure to maximize profits. Indeed, popularity of the mutual model has grown substantially since the early days of Connecticut Mutual and MassMutual, with more than 100 mutual companies currently competing for Americans’ insurance business, including such large carriers as New York Life Insurance Co., The Guardian Life Insurance Company of America, and Northwestern Mutual Life Insurance Co.

“The brand is hugely important,” Benson says, because MassMutual is a household name that, to some degree, sells itself. “We spend a lot of time and effort trying to send a strong message around the recognition of the brand and the concept of mutuality, and the impact that has in terms of our ability to act in the best interest of our clients.”

It is also presumably a magnet for new talent. Benson explains that success as a financial adviser at MassMutual involves a desire for continuous learning, a willingness to be mentored by more experienced professionals, and a recognition of the opportunity to positively influence the lives of one’s clients.

We are seemingly back to financial literacy, and perhaps even Camillus, New York, and the Industrial-Age family and workforce that forged Wendy Benson’s work ethic and commitment to making an impact.

 

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.

 

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