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Winning Team

Charter Oak Agency Has a Game Plan for Success

COVER0113bAs the head of Charter Oak Insurance and Financial Services Co., Peter Novak has a number of job descriptions. But mostly, he sees himself as part of a team.

“From the top down, everyone here has a unique ability, and even though I’m the general agent or president of the company, that’s just a role in the organization; I’m not better than anyone else,” he said. “All our staff people fill a critical role.”

Those roles have coalesced into 15 years of striking success since Novak took the reins at this general agency of MassMutual — what is, in fact, considered the flagship agency of the financial-services giant, serving more than 60,000 clients throughout the Northeast and beyond and helping individuals, families, and businesses with insurance, financial services, and fee-based financial planning.

In fact, while MassMutual boasts 85 agencies around the country, including large markets such as New York, Los Angeles, and Chicago, Charter Oak — which used to center solely on the Greater Springfield market before merging with a Hartford-based agency, and now blankets much of Western Conn. as well — consistently finishes second in annual sales, trailing only a Manhattan office.

“We happen to be in a very good position right now,” Novak said while speaking with BusinessWest in Charter Oak’s Holyoke headquarters, in the PeoplesBank building.

“Being a general agency of MassMutual in this economic environment has been a huge plus,” he continued. “MassMutual is a mutual company where the policyholders are the stockholders, and people are looking for stability and long-term value, which is what MassMutual provides. And if people are looking for long-term guarantees, we are perfectly positioned in the marketplace, being the the flagship agency for the home office, where people can see the bricks and mortar of the [MassMutual] building. That gives us a distinct advantage in today’s world.”

For this issues’s focus on financial services, BusinessWest talks to Novak about his agency’s impressive expansion, the accolades that growth has attracted, and the culture of mutual respect that anchors the organization’s success.

 

Super Bowls

Evidence of that success is immediately apparent when walking into the Holyoke office, overlooking I-91. On a set of shelves out front rest numerous silver and gold bowls; they are Chairman’s Trophies, given by MassMutual to its top agencies, judged by annual compound growth and a host of other measurables, such as compliance efforts and adviser development and education. Charter Oak has won a bowl in 13 of Novak’s 15 years with the company.

“It represents building a solid organization,” he said. “It’s an all-encompassing award. That’s why we take pride in that award. We’re building a solid organization, and that trophy means we’re investing in our business, and we can provide the best possible service for our clients.”

The bowls started arriving right after Novak took over in 1998, along with profound growth: the first gold bowl was earned in the small-market category, after which Charter Oak began competing — and winning — in the mid-market tier. Soon after that, the growing agency was pitted against large-market firms, including some from the largest metropolitan areas of the U.S., but the bowls have kept arriving, year after year.

Even after its auspicious start, Novak’s tenure at Charter Oak has seen continued growth. “For instance, our life-insurance sales in the past four years have doubled. We did, this year, about $5.5 million in commissions and $11 million in premiums, which is more than double what we did five years ago. We’re managing close to $4 billion in assets now as a firm.”

Essential to that growth has been a boom in whole-life insurance sales, a trend that Novak ties to an increasing desire for guaranteed products.

“Because of the economy and what happened over the past three or four years, people are looking for guarantees, and they’re looking for safety,” he said, again stating his belief that Charter Oak is well-positioned because of its obvious association to MassMutual and the parent company’s high financial ratings. “The whole-life insurance product has guarantees, plus the fact that MassMutual has paid a consistent dividend.

“It all goes back,” he added, “to the basic point that MassMutual is a mutual insurance company, and the policyholders are the stockholders, so, as a company, they take a different perspective than other insurance companies that answer to stockholders, where there’s pressure on return.”

In that sense, he continued, whole-life insurance “has become an exceptional alternate investment for those who want guarantees.”

Wealth management and financial planning, of course, are the agency’s bread and butter, with an array of services and products to help clients reach their goals.

“We see ourselves as a personal- and business-planning firm,” Novak said. “The personal side encompasses estate planning, retirement planning, and college planning, while the business side incorporates executive planning, buy-sell agreements, and pensions. Then, the products that fulfill those needs include life insurance, 401(k) plans, executive-benefit planning, mutual funds, managed money, and a wide assortment of other life-insurance products.”

 

Interstate Commerce

The continued expansion of Charter Oak — it had about 120 representatives working for clients a decade ago, and 175 today — has come amid a decision to refocus the firm’s geographic reach on the Interstate 91 corridor from Connecticut through the lower Pioneer Valley.

“From a business perspective, we made a strategic change in 2007 and 2008 when the market changed,” Novak explained. “We had an office in Boston, and we closed it down. We felt that the economic engine of Western Mass. was going to be the 91 corridor, and we focused our energies on opening offices along the 91 corridor.”

Reflecting that I-91 saturation, Charter Oak boasts offices in Holyoke and Hadley, plus the Connecticut communities of Farmington, Southbury, and Hamden. Offices in Danbury and Stamford, Conn. are farther from 91 but reflect the company’s general growth, which also includes a location in Purchase, N.Y. and a planned office in Brooklyn.

That said, “I think the future of Western Mass. is the 91 corridor,” Novak stressed. “Amazingly, the attitude of business in Boston and business here, even as far south as New Haven, are two different worlds. It’s just that people are different, I think. It just got too complex for us. I think Springfield’s identity is, and will be, the 91 corridor and south.”

Novak, who studied psychology at American International College (AIC), has long had a finger on the pulse of the Pioneer Valley, augmented by work experiences across the Northeast. Since shifting from a social-work career three decades ago to the financial-services industry, he served as general agent to MassMutual’s Rochester agency, co-general agent at the New England/Robinson Co. in Waterbury, Conn., and an agent at the New York Life Insurance Co. before finding his present home at Charter Oak.

Several years ago, amid geographic expansion in Connecticut, he brought on a second general agent, Brendan Naughton, who oversees much of the Nutmeg State market and focuses largely on the recruitment and professional development of new and experienced associates, as well as heading up Charter Oak’s sales-management team and agency training program.

Novak said Naughton’s presence has helped steady the agency during a continued era of growth, but also, because he’s younger than Novak, provides a clear leadership-succession path in the future — again, speaking to the desire to project that all-important quality of stability to clients.

Novak has weathered other changes in his job, the core of which has always been to market and sell MassMutual products in his territory of Western Mass. and Connecticut. “But in the new world today, we are not limited to only MassMutual products; we can sell any product the consumer would want, such as other insurance products from other companies and investments. So we would consider ourselves a personal and business planning firm.”

As an independent business owner, he’s not employed by MassMutual itself, but he values his status as one of that company’s general agencies, and one that has risen to a lofty status.

“We have been committed to the community,” he said. “People ask, ‘why stay in Springfield? Why not go to a major market?’ But this is a great place to raise a family. I can get to everywhere from Springfield. Why would I want to leave?”

As for MassMutual itself, “not being involved in the financial-services industry as much as I have, people around here don’t always realize what MassMutual is from a national perspective and how fortunate they are to have a company like that in this community. Personally, I can’t see why anyone would buy another product but MassMutual.”

 

Culture of Success

To continue growing the agency regionally, Novak said he’ll continue to encourage an employee culture that emphasizes integrity and positive motivation. A basketball player for AIC in the 1970s and a coach on a number of levels afterward, from youth to collegiate, he is fond of taking lessons in teamwork from his sports life and seeding them with a heavy emphasis on mutual respect.

“Our basic principle is to create an environment where you treat people the way you want to be treated, providing them the resources to grow entrepreneurially — an environment where a handshake means a handshake,” he told BusinessWest.

In other words, he continued, by treating employees and agents with care, the expectation is that they’ll do the same for clents. In addition, “we consistently try to invest in the business so our advisors can provide the public with the best available resources to do the right thing for them.”

He said his agents know they need to accomplish their goals to remain on the team — and knows MassMutual could cut him loose if he doesn’t meet his — but says no one on this squad needs to be harangued into doing their part.

“At the end of the day,” he insisted, “our integrity is what matters most. If you lose your integrity, you lose everything.”

Novak and his team, however, keep on winning. And they’ve got much more than a collection of bowls to show for it.

 

Joseph Bednar can be reached at bednar@businesswest.com

 

 

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