Affiliation helps employee-benefits firm expand

SYRACUSE - The affiliation between Syracuse-based Benefits Specialists of New York (BSNY) and Donahue Financial Management Group (DFMG) is causing some major changes for BSNY The affiliation went into effect Aug. 6.

Not only will the affiliation lead to an expansion of products and services and an increase in revenue and profit for both firms, but it also will force BSNY to relocate to larger office space.

Paul Muoio, chief operating officer of BSNY, predicts the affiliation will lead to a 12-percent rise in annual revenue and a 20-percent increase in profit.

Thomas Donahue, Jr., sole owner of DFMG, predicts even larger gains for his firm. In 2007, he forecasts that DFMG's revenue will jump between 70 percent and 100 percent as it gains new customers from working with BSNY.

BSNY, located in the Greater Syracuse Chamber of Commerce headquarters building at 572 S. Salina St. in the city of Syracuse, offers medical, dental, and life insurance, short- and long-term disability, New York State disability, vision plans, and flexiblespending-account administration to sole proprietors and small and large businesses. Toshiba and Sensis Corporation are among its 800 business clients.

The Greater Syracuse Chamber of Commerce founded the firm in 1980, and BSNY remains a wholly owned subsidiary of the Chamber. BSNY is a for-profit corporation. Muoio declined to disclose BSNY's annual revenue.

DFMG, located at 432 N. Franklin St. in Syracuse, offers retirement planning, estate analysis, business-continuation planning, and pension, profit sharing, and 401 (k) plans to small- to medium-sized business owners. The firm serves 1,000 clients. Donahue founded the firm in Binghamton in 1997 and moved it to Syracuse in 2003. He estimates that revenue exceeds $200,000.

The affiliation will allow the firms to expand the services and products each offers. It enhances the size of BSNY, making the firm more appealing to clients, Muoio says. The affiliation allows BSNY to now offer individualized services that DFMG specializes in, Muoio adds.

"We will be more competitive," Muoio explains.

Donahue's main reason to affiliate was to provide his clients more services. He hopes this will cause clients to utilize more services with DFMG.

Each firm will remain independent. Both firms will continue to sell their own products.

However, the affiliation creates the "DFMG, BSNY's Individual Financial and Insurance-Services Division."

The core products offered through the new division include retirement plans, executive fringe benefits, individual life, disability, and long-term care plans, investment products, tuition-funding programs, and business-continuation planning. Donahue and Donna Herlihy, disability specialist at DFMG, manage the new division. Employees from both firms will interchangeably work for the new division, Muoio explains.

BSNY and DFMG can access each other's customer list. The division's revenue will be shared, but Muoio declined to disclose precisely how the revenue will be divided between the firms.

Both firms are already seeing the affiliation's impact. BSNY and DFMG are already sharing clients, Donahue says.

BSNY is moving from its office space on the second floor in the Syracuse Chamber building to a larger space on the first floor. The relocation will double BSNY's working office space from 980 square feet to 1,600 square feet. BSNY owns the Chamber building.

The new office will accommodate employee growth. BSNY currently employs 11, but plans to add two employees soon, Muoio says. DFMG currently employs two, but plans to grow to five or six employees by the summer of 2007, Donahue says.

Renovations and office equipment for the new office cost approximately $70,000, Muoio says. BSNY is funding the project, he adds. He declines to disclose the name of the general contractor.

BSNY and its new division will move into the new office space in January 2007. DFMG will continue to also operate from its office space on North Franklin Street to continue serving existing clients, Donahue says.

Prior to joining BSNY in 2004, Muoio served on the management teams for HealthNow and United HealthCare. Donahue is in his 15th year working in the finaricial services and insurance industry.

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