“If we can’t describe a program in a few sentences, then something is wrong.” That’s the watchword of GW Financial co-partners John Gagnon and John Waters. They met at a privately-held company in the early 1990s where Gagnon was president and CEO and Waters joined the firm, becoming COO. They sold that business in the late 90s and began their new firm five years ago.
“They have a strong technical knowledge and the ability to take a consultative approach to aiding their clients,” says Mark Panella, CFO of DanversBank.
David Wallace, President and CFO of Lowell Five Cent Savings Bank, says his bank was one of the “early adopters” with Gagnon and Waters when GW Financial began utilizing M Benefit Solutions. “What I really appreciate with [Gagnon and Waters] and their whole team is that they are always accessible,” he says. “Their focus is clearly in the community bank arena.” The role of M Benefit Solutions is to facilitate back-office compliance, while Gagnon and Waters are the contacts who provide specific advice and service and help with annual reviews. Wallace also commends GW Financial for its constant monitoring of the soundness of insurers.
John Sweeney is senior vice president and CFO of the Bank of Canton. He’s worked with GW Financial for four years and praises the back-office support they offer for the bank’s BOLI portfolio, as well as advice on new BOLI purchases. “I am very impressed with the service they deliver. They have made it very easy to manage our BOLI policies,” he says. “They have a great website that provides all of the information I need, and they take care to ensure that it’s accurate and up-to-date. They do a great job with the annual reporting to the Board of Directors and take a lot of the “mystery” out of the BOLI business.” Finally, he says, “As the CFO it’s nice to know that you are receiving accurate & up-to-date numbers and information.”
Gagnon and Waters say they’ve seen a dramatic change in the way executive benefits and BOLI are implemented and delivered and administered. Previously, some plans got too complex to understand, even by the participants, Gagnon says. “Today with 409A, the governing regulation for non-qualified plans, organizations are returning to straightforward plan designs, which we favor.”
For most community banks that have held BOLI during the fiscal crisis, it turned out to be a positive stress test, Gagnon says. BOLI products overall have performed well, becoming one of bankers’ highest performing assets over the past few years.
GW Financial’s back office is SAS 70 certified; it provides disaster recovery plans, and offsite informational back up hosting, and informational security reporting on its systems requirements. Its online administrative system, BOLIPro, provides both insurance accounting and asset liability reporting for executive benefits and full 2004-56 BOLI compliance.
GW Financial provides wealth management as part of deferred compensation programs for corporate clients. Its approach utilizes a series of managed account portfolios based on risk tolerance, and its objective analysis of investment returns is intended to ensure that clients have realistic expectations. Its portfolios include asset classes such as absolute return, real assets and private equity in addition to traditional strategies, providing its clients another form of diversification.
GW Financial also provides proxy reporting for its public bank clients, to bring the overall cost of the compensation package together and summarized as a total yearly cost that can be understood by stockholders.
Life insurance-related programs yield benefits such as cash accumulation, tax deferral, and cost recovery for both the organization and the executive. Sometimes, their original purpose – life insurance benefits — becomes of paramount importance. A newly-retired executive at one of GW Financial’s clients recently died very shortly after retirement. The client company was able to provide a significant death benefit payment to the surviving spouse. “It really brought home the ultimate benefit of what our products provide. This executive had developed into a friend over the years and to be able to provide financial security to his spouse was very satisfying to us,” Gagnon says. “The positive effect this had throughout the organization was also important as it demonstrated how they take care of their employees.”
