As the third generation owner of The Gaudreau Group, Jules Gaudreau has grown his family’s small Wilbraham-based home & auto business into one of the largest independent insurance agencies in the region. He has done that, he says, through his decision to actively get involved in the insurance industry and to advocate not only on behalf of his insureds, but on behalf of agents and the independent insurance agency system as well.
As part of that mission, Mr. Gaudreau is currently serving this year as the President of NAIFA, the National Association of Insurance and Financial Advisors, in addition to managing his thriving agency.
In this month’s Agency Interview, Mr. Gaudreau talks with Agency Checklists about his career in the Massachusetts insurance industry, his passion for advocating, and why he believes other Mass. agents should get involved too.
Tell us a little bit about The Gaudreau Group
The Gaudreau Group is a multi-line insurance and financial services agency founded in 1921, by my grandfather, Oscar Gaudreau. The agency currently serves the needs of about six thousand businesses and families in fourteen states via an array of insurance products and risk management services. I am the third generation of the Gaudreau family to run the agency.
How big is your agency?
There are not a lot of niche agencies here in Western Massachusetts. There are some market focuses that we have, but there aren’t fifty biotech companies here for our agency to focus on, for example. As a result, we have to have the ability to be fluent in a lot of different industries and occupations. With that in mind, since taking over the helm of The Gaudreau Group, my team and I have grown the agency (including our Employee Benefits and Wealth Management Divisions) into an $80 million company with thirty-two employees all based in our office in Wilbraham.
Did you know you always wanted to go into insurance?
No, I actually wanted to be an attorney. Prior to entering insurance, I had been an elected official in the city of Chicopee where I grew up. I ran in a primary, and then a general election, and was elected to the city council there at the ripe old age of twenty. I always thought that I would go to law school and end up becoming a public official. Life changed my idea about those things.
But growing up with insurance did influence you, obviously.
It did. My father worked in the agency five days a week, from early in the morning until the early evening, as well as every Saturday morning, while I was growing up. I have always been very accustomed to what agency life entails. In addition to that, my grandfather also worked with my father until his retirement from the agency, in 1972. I would often go into the office to visit them and was very close to my father’s father. So yes, I would say insurance is in my blood.
Insurance is the hardest profession in the world to make $50,000 a year in, but the easiest to make $250,000 a year in – Jules Gaudreau
How did you decide to enter the insurance industry?
In September 1983, I started selling life insurance. Being reasonably successful at it, I decided to think more seriously about an insurance career. So one day in the Spring of 1984, while visiting my father and his twin brother, who were running the agency together, I asked them what they had planned for their future. They said that they both would be looking to retire and to sell the agency at some point in the near future. That was in the Spring of 1984. By January of 1988, I had bought the agency and was running the business with both of them getting ready to retire.
After 28 years in this business, how do you see yourself vis-a-vis your agency now?
I see myself both as a president and CEO of the agency, but in truth, more of a CEO than anything. I think, as CEO, my job is to navigate the agency through the evolving marketplace, whether that be dealing with new technology, with respect to social media, or in responding to regulatory and legislative changes. What I would really call the public sector environment that all agencies operate in now.
The government is so deep into our industry today, that it actually has become our biggest competitor in many ways. Witness health insurance. Witness the government intervention and interference in the private passenger auto market in Massachusetts, essentially creating a cartel of insurance companies. While those insurers have served the consumers reasonably well, I think the competitive environment, that we have been in the last four or five years, has been good for the independent agent and certainly good for the consumer.
How does your management style translate into how you manage your agency?
I have four managers who oversee the four different divisions of my company. Those divisions include: a wealth management division called Gaudreau Wealth New England, an employee benefits division, a commercial property casualty division, and finally a personal property casualty division.
I just have wonderful, seasoned, long-tenured managers that run those departments. We also typically schedule weekly department meetings, allowing me the opportunity to meet with every single person in my company, every single week. They are brief meetings, usually last thirty minutes or less, but very important. It allows me the opportunity to have face time with everybody in the agency and to say to them at the end of those meetings, “Is there anything you need to talk about or put on the table?”
Again, as the president of NAIFA this year, it can sometimes seems like I am running a little bit on three wheels. So far, however, we have been able to manage through, what I would call a seasonal imbalance here at the agency, and our customers have been very, very supportive. Our entire community has been very supportive of my efforts in this regard, so it’s all been very positive thus far.
Looking back at your career what has been the biggest challenge in running an independent agency?
I would have to say recruiting and training the staff that is so often necessary to keep our promises. When you are out there selling insurance you often make a lot of promises. It is not always easy, however, to recruit the staff people with the competencies to be able to keep those promises. It is not always inexpensive nor easy to train employees, who do not have those competencies already.
I would say that is a big challenge. Another one would be the constant change brought about by legislation and regulation of our industry.
What has been your biggest success?
Personally, being an entrepreneur has been as important in my career, as being an insurance producer or the owner of an insurance agency. I am going to be fifty-five this month, and as I look back on the thirty-two years that I’ve been in this business, I think that is one of the things which I am most proud of. It is not just the sales that I have made or the clients that I have brought to the table, but rather the people that I have helped and how I have been able to build an enterprise that serves our community in a lot of ways other than just insurance. The jobs I have created and professional development opportunities I have given to so many people—that is what has been the most rewarding for me.
Are your children or other family members involved with the agency?
I am married and have three children from my first marriage. My wife is a commercial property casualty producer, who also works in the agency.
And your children?
My daughter, Elise, is an administrator in the agency. My son, Jules, is a commercial property casualty producer. He just received his license last summer, and has passed his advisor’s exam as well. So he is moving along in the same vein as his father, of becoming both an insurance producer and consultant.
I am very proud of my children. They are very talented, hardworking, and understand that this is a meritocracy and that nothing will be handed to them.
Do you have a perpetuation plan in place for the agency?
I do. I have a perpetuation plan in place that is funded with life insurance and disability insurance. My family is aware of the exact particulars of the plan along with my senior staff. The plan involves a very dear friend of mine, who runs a very successful agency. He has agreed that in the event that he is needed, he will come in and become a compensated temporary CEO, who would then do the things necessary to figure out if the employees would buy the firm, or if it would be sold on the market, or whatever.
This is somebody who has a great deal of business acumen and whom I admire greatly. He is well aware of his responsibility, and has agreed to it, as well as signed off on it. As such, if something should happen to me, while traveling around on NAIFA business, my employees and my clients should know that the agency won’t skip a beat.
What about your children? Do you hope that one of your children will be interested in taking over the agency one day?
I would want them to take over the agency, only if they are happy in the profession. This is a difficult, but wonderful profession. As I’ve said to many people over the years, insurance is the hardest profession in the world to make $50,000 a year in, but the easiest to make $250,000 a year in.
Your agency also is involved with captives. If it’s not a trade secret, how did that come about?
We saw that the alternative risk financing methods were becoming very, very important. Since my team and I all have a number of insurance designations, which require continuing education classes, we all started learning about alternative risk arrangements like self-insurance and captives.
As we began to explore them, it was easy to see the potential captives could have for certain clients. In the right scenario it just offers an amazing opportunity for a client to really take control of their cost of risk, to handle their risk exposures, and to sort of share in the profits of good risk management techniques. As we learned more about captives, our team began to make connections in the captive community and to develop an internal expertise in our agency. We then went out and started offering captives to those clients we thought would most benefit from a captive arrangement.
Obviously, these types of clients are generally larger clients that have particular risks and a fair amount of cash flow. It also has been a very effective way for us to attract and retain very large accounts as well.
Overall, having the capability to be involved in captives is essentially having another arrow in our agency’s quiver. We are one of maybe a few dozen agencies in all of New England and New York that really has any expertise working in the captive marketplace.
How successful has it been?
We have been very happy with our captive arrangements thus far and currently work with some of the largest captive managers in the world. In fact, we just received word last night that we had been chosen to write the worker’s comp on a billion-dollar company through a captive arrangement that we had proposed for them.
So as we have developed this expertise and built our reputation in this field, more opportunities have started to become available to us. We also are starting to do seminars about captives which have gotten us a lot of publicity. So, now people are actually calling us saying, “We’d like to talk to you about us potentially being in a captive.” So it’s going well and we are very happy with our progress thus far.
You mentioned your work with NAIFA. Let’s talk about your recent election as the new NAIFA President. How did you first get involved with this organization, and what led you to seek its presidency?
My belief in advocacy and the important need of personal accessible financial advice to secure the future of American families were the main reasons why I initially got involved with NAIFA. I first attended a meeting in 1990, and over the years, got more and more involved. As the 2016 NAIFA President, I currently represent an organization of over forty-two thousand professionals across all fifty states as well as Puerto Rico and Guam.
My agency staff has been simply wonderful in helping me to be able to achieve this goal. They gave me the opportunity to seek the presidency, and really pushed me to do it. In order to become president, I not only had to run in an election, but had to be involved nationally for many years before standing for office. And once you get on the executive committee of an organization like NAIFA, it’s really a four-year commitment.
Overall, the experience has been very rewarding and fulfilling, albeit sometimes challenging and frustrating. I feel, however, that I have the necessary skill set and calling for this position: Which is to help those in charge of making the rules and public policy understand how important the insurance agent and advisor are to the future financial security of America. It is really a mission and a calling for me.
For example, last December, I went to Washington and testified on behalf of American families and businesses in a very widely publicized bit of testimony. As the President of NAIFA that is what I do now. However, it is also something that I have advocated for over the past 25 years. I have been an advocate for not just this industry, but for the rights of consumers and their ability to deal with the professionals of our industry.
Why do you think other agents should get involved with organizations like this and to become more of an advocate for their industry?
Boy, it’s made all the difference in the world for me. By networking with other successful insurance agents at insurance association meetings, like the MAIA and NAIFA, I have been able to take a very small family agency and turn it into one of the largest organizations in the region. I’ve done that, not only with the help of my very talented staff, but through what I have learned from these associations.
So, in offering advice to other agents, I would suggest there are a number of wonderful, easy ways to get involved. Just start by becoming a member. Think of it like career insurance.
The MAIA in Massachusetts has fought for decades for the independent agent. When you look at the cost of dues, it is a minuscule career insurance premium for the benefits that you get out of it.
Speaking of the MAIA, it has begun a search for Mr. Mancini’s successor. What do you think a new MAIA President & CEO should be focusing on?
I was actually a director of the Massachusetts Association of Insurance Agents, for a number of years, in the 1990s. While I sort of stepped back from that when I went into my NAIFA career, I am still very involved with MAIA. Personally, I think it is one of the finest organizations of its kind in the United States.
As part of NAIFA, I have traveled around the United States and visited many state associations, for the past eight years. The Big Event, itself, is a state association meeting that eclipses most national meetings of virtually every insurance trade organization and every insurance company. It’s just an amazing event and the MAIA is just an outstanding organization that focuses on the agent like none other.
As for its executive director, Frank Mancini—he is a gem. I don’t how they will replace him. It will be a good case for cloning though, I can tell you that.
Frank is one of the most effective association leaders, not just here in Massachusetts, but I think in the history of the American Insurance Industry. He understands what we agents do every day for the consumer and for our communities. Independent agents and the insurance industry, anywhere in the United States, have never had a better friend than Frank Mancini.
Would you like to see someone from Massachusetts take over the MAIA?
Not necessarily. I think it would have to be somebody, however, that understood the subtle differences in the Massachusetts market versus the rest of the country. For example, with respect to the independent agents’ market share of the personal lines marketplace here for example.
If you could give one piece of advice to other Massachusetts insurance agents what would it be?
One of the biggest disappointments in my career, is witnessing other independent agents and advisors not helping out in this advocacy mission. Expecting people like me to carry the water for them so that they can just sit there and not worry about everything. Not even join. Not even pay their—what I call—career insurance, by paying dues to join. That’s been a great disappointment to me.
I think the other thing, that has been disappointing and challenging to me, is witnessing this race to the bottom concerning price—this idea that everything revolves about price. The independent agent will not survive if they think they are competing on price alone.
Last week, our agency took three pieces of business away from GEICO. We did that by adding value to the relationship. Value is not just about price. It is about price, and convenience, and service, as well as the features of the product.
What else should agents know about advocacy and participating in associations like MAIA and NAIFA?
I got involved with both the MAIA and with NAIFA, as a young agent in 1990. At that point in my career, I had been in the business for about seven years. Joining these organizations, however, was a turning point for me and my agency. It was when the business got in me.
I started to learn ways to communicate better with the consumer: to hire and train people better, market better, how to run things better, how to give presentations better, and how to speak in public better. All of those things helped me become a better leader, a better communicator, and a better agency principal. As a result, you’ll see the trajectory of the growth of my agency just take off from 1990 on, because of my really being involved in those organizations.
Any other advice for agents to understand why advocacy is important?
When you get involved in advocacy, you start to learn a lot more about our products and about what is important about those products. You also start to learn a lot more about the whole: understanding what is happening in your own community, your own state relative to politics, and things like that. You also start to get known to the people in your community, and in the industry, as an advocate for the agency system and finally, you will start to develop amazing contacts. That I think our the most important reasons why to get involved.
The second piece of advice, I would give, is to pursue professional development education. These organizations [like NAIFA and the MAIA] have amazing meetings and professional development opportunities that are just fantastic. Whether it is learning about advanced applications of life insurance or learning about how to use experience calculations to sell more workers comp., there are just so many different opportunities offered by these associations that can help an agent become better as a person and as a professional.
Finally, there is the networking component of advocacy. I can emphasize the importance of being involved and interacting with other agents. Most of my best friends in the world today are other insurance agents. I don’t see them as my competitors simply because I don’t see the insurance industry as a finite group of prospects. We can help each other to grow. I help others. I mentor other agents now, as other agents did for me over the years. I think that is one of the greatest things that these associations provide.
In fact, if any of my fellow agents want to contact me about what I spoke about in this interview or getting involved, my contact information is: Jules Gaudreau at 800-750-3534, or firstname.lastname@example.org