A lean brokerage focuses on smaller clients
Jason Seltzer has a novel approach when approaching potential clients. The 35-year-old president of J. Seltzer Associates, the Pittsburgh-based brokerage where he works with his father John, tells clients flat-out that his company is not desperate to sign them.
“One thing that we tell every prospective client we meet with is, ‘We don't need your business,’” he says. “It's crazy to say that, but we are our own bosses and we're looking for people that we want to work with and who want to work with us and see value in what we do.”
So far, it has worked well for Seltzer, who is an EBA 2017 Rising Star in Advising. By keeping a lean and mean office with a dozen independent sub-contractors who do most of the selling, Seltzer can be selective about the clients they work with and the services they deliver.
“There’s lots of value we provide and if your philosophy is different or incompatible with ours or we just don't think this is going to work out well for either of us, we say, ‘That's great. We'd like to find that out now so you can go your way and we can part as friends,’” he says.
While he works with private equity firms that are looking to invest in smaller brokerage firms, Seltzer say he and his father plan to keep the lean profile.
“I think ideally we would never get much larger than half a dozen people working fulltime. Knowing that you can manage your books well into the seven figures with less than that, I don't ever see us being a big organization,” he says.
“We like being small and we like being nimble,” he adds.
Seltzer believes that his smaller firm can provide a high level of consultative advice to the small to mid-sized employer, which he calls an “underserved market.” He says, “They tend to work with a smaller, local firm who doesn't have the expertise and the experience that we have. But if we start getting too big, then we're running into the large regional national firms. I'd rather do what we do, where we do it.”
His father agrees. Jason “has demonstrated a commitment to his clients and the benefits industry during the past several years of change and upheaval and is positioning the firm to grow in the future,” says John Seltzer, co-founder and CEO. He adds, “Jason has also been directly responsible for our unique business model positioning us well to capitalize on the changes taking place in our industry and to create a new service delivery model allowing us to be a true consultancy in the small to mid-sized employer marketplace.”
This approach helps the younger Seltzer to understand how firms view new technology, for example. Around 15 years ago, as the wave of advisers providing free software to clients was first taking off, Seltzer found that his clients had little interest in the no-cost offerings. Even 10 years ago, they viewed any free technology as an add-on with little value.
“If it’s free, how good can it be,” says Seltzer.
He also found that clients were not offering the technology to their clients. “If it’s not being offered, then what’s the point?” he asks.
Now, Seltzer and his sales team are re-visiting this approach. He says the small firms that were once uneasy or uninterested in these free services and technology are realizing they need help with their limited resources.
“Most of our clients do not have a fully staffed HR department. They don't have a dedicated benefits person or a comptroller or CFO due to their size. The business owner themselves are dealing with this and we said, “What if we were able to make your life a little bit easier?” he says.
He adds that the owners are occupied by intense HR administration duties as well as answering questions about ACA and compliance issues.
“We're starting to get a better response now than we were previously,” Seltzer says. “But we never bought the argument that if you build it they will come.”