Rick Wedge began his career with Principal Financial Group as a retirement plans wholesaler right out of college, going on to become a regional manager in Baltimore for a year, and then a regional vice president of retirement sales in San Francisco. Although he enjoyed those roles, he wanted an opportunity to work with those plan sponsor clients after the sale. “I had a passion for continuing to work with [plan sponsor] clients, and I didn’t get to work with them after the sales cycles,” he explains. “I saw brokers I was working with lacking in services and I thought there was a huge hole.”
That desire to get closer to the client led him to found Northgate Benefits in 2006. “My goal was to provide services to small plans that I saw large plans getting,” Wedge explains. This means that each of his client plans, most of which are in the $1 million to $10 million range with 50 or 60 employees receives quarterly reviews, educational plans, investment policy statements, and, of course, a personal relationship with him. He feels so good about his client relationships that, when someone asks for a reference, he says he gives them all 48 client names and says the prospect can contact anyone.
Wedge, who prospects by promoting services through online seminars, luncheon seminars, monthly newsletters, e-mail updates regarding regulatory changes, telemarketing, and joint development sessions with local CPA firms, can serve as either a broker or an RIA, because he wants to be able to charge fees, not just commissions. However, not all plans want to use the fee-based model, he notes. While the company will be four years old in May, Wedge says he is still in growth mode, and aims to add 12 plans per year. “I feel like we can add a lot more clients before adding staff,” he says, although he says he is looking to add an educator to his team soon.
Right now, the retirement plan team at Northgate Benefits consists of Wedge and Mike Warson, who is in charge of marketing. There is also a benefits side of the company that has three client-facing employees and three administrative/support staff members, and Wedge shares some of that office staff. “I thought I would do some benefits stuff originally,” Wedge says, “but I was in way over my head.” One of the benefits of being a small shop for clients, he explains, is that “each of our clients has direct access and interaction with our Practice Leader instead of a junior account representative.”
The capacity issues come into play mainly because Wedge delivers the education meetings on his own. However, he says, that’s where his passion is; “I love the idea that I’m helping people put money away.”
A benefit to working with smaller groups is that Wedge finds it easier to deliver results. He offers general education to start, then gets more specific, offering targeted education sessions that are geared toward a specific employee audience, leading then to one-on-one meetings. Additionally, Wedge notes, he can give investment advice.
As for the future, Wedge names two initiatives he expects to pursue. First, Wedge plans to be more efficient around his annual reviews. He does all his reviews in March and April, consolidating them into a shorter time span, instead of over multiple months. The 80-100 page quarterly reviews: Instead of being printed and delivering physical copies to clients, Wedge has begun distributing soft copies via e-mail as part of a “going green” process, he explains.
Additionally, this year, he plans to send more regulation communications to the employees. Last year, he says, he sent e-mails to the plan sponsors asking them to distribute a written communication to plan participants, something he hopes was a help and one of the reasons that his plans did not have a lot of participants jumping ship or moving to cash.
Wedge works to measure success with the sponsor by focusing on things such as plan participation, deferral rates, and investment allocation. He says automatic enrollment and systematic deferral increases are “two of our largest rallying cries with all of our clients.” That is only part of the battle, however, as he explains that investment allocation also is pertinent to measuring plan success. He reviews those numbers at least annually, once a client is up and running, he says. “It’s one thing to say you’ve got 90% participating but, if they’re all in stable value, then we’re not doing our job,” he says.