Creative thinking can mean the difference between average and superior performance in a number of industries, and the brokerage biz certainly is one of them.
Powerhouse producers, of course, tend to be good salesmen and insightful financial analysts, but, for many, a smattering of idiosyncratic techniques also plays a large role in their success.
What follows are brief profiles of six such reps. Each has a successful practice ($80 million or more in assets under management), and each has taken a road less traveled to his successful perch.
It seemed like a sure bet. Two years ago, Alan Goldfarb, along with three partners, launched a financial advisory division for an accounting firm called Weaver and Tidwell in Dallas. Goldfarb and the rest of his team at Weaver and Tidwell Financial Advisors readied themselves for a deluge of referrals from their accounting brethren.
The flood never came — mainly because the accountants had no interest in sharing clients with the new financial planning firm, in part because some of them didn't believe the planners would provide services all that different from their own.
“It was like pulling teeth to get anyone to do anything,” says Goldfarb.
In short order, Goldfarb realized the need to demonstrate his team's expertise to the accounting teams. To do so, they targeted eight of the 22 accounting partners — the ones who specialized in tax, as opposed to audit, issues — and offered to create a financial plan for each of the eight (at a deep discount).
“We figured the best way for them to see what we did was for them to go through the process,” says Goldfarb.
It worked. Most of the partners started referring their clients to Goldfarb's team — which now has over $125 million in assets under management.
Small Is Beautiful
For most of the past seven years, Matt Van De Motter and his three other team members held the usual events for their high-net-worth clients — cocktail parties for 200 or so at places like the Cleveland Museum of Natural History. But, for Van De Motter, an advisor with Morgan Stanley in Chagrin Falls, Ohio, those extravaganzas never did much in the way of strengthening relationships with clients or getting new ones.
Then, two years ago, he decided to radically overhaul his approach. Instead of throwing large-scale bashes, they opted for more targeted activities for 20 or so clients and a few of their friends. To determine what events would attract the most interest, Van De Motter and other team members made it a point to discover clients' hobbies and proclivities during initial consultations, and to later build a program of events around those interests.
Now, he runs a different event each month. Recently, for example, they took a group of clients and their guests, along with a fishing pro, on a one-day fly-fishing expedition. Other trips have included skeet shooting, canoeing and wine tasting.
In addition to pleasing the clients, Van De Motter says that about 60 percent of guests turn into clients. He estimates that “north of $40 million” in assets this year have come his way through these events. (His total assets under management are $250 million.)
Van De Motter doesn't hide his intentions from his clients.
“They know it's a low-pressure way to ask for referrals and for them to provide a fun event for friends,” he says — a proverbial win-win.
The One-Page View
Sometimes, the best way to attract more business is to help clients deal with all their holdings — including ones you don't handle — and doing it in a simple, clear-cut way. For the past six years, Elliot Herman, director of financial planning at PRW Associates in Quincy, Mass., has produced a quarterly summary of clients' assets in an easy-to-read one-page format — everything from stocks and insurance policies to real estate holdings and private equity investments.
“It gives a holistic view of what's happening in each person's portfolio,” he says. “Clients like to have their life on one page.”
Then, on a second page, he includes the “value adds” his firm has taken — extra steps to help clients achieve their goals.
The really useful part of the process is when Herman analyzes the statement with clients. He says a number of clients have moved all their accounts over to him in the wake of such analysis. Recently, for example, he pointed out to a client that a hedge fund he held — an account not under Herman's control — was in a taxable account, when it should have been moved to a tax-deferred alternative.
“The client thought about it, then asked me about what else he might have missed out on,” says Herman.
Not long after, he moved about $750,000 more in assets over to Herman, who now has more than $100 million in assets under management.
The Daily Show
Lots of advisors appear regularly on radio shows. But, David Rankin, an advisor with Ryan Beck in Cherry Hill, N.J., and his two partners, take that a step further. For the past two years, they've done a one-hour show — each and every weekday.
It started back in 2001, says Rankin, “when the market really started to fall apart.” He and his partners felt that many investors, alarmed at the state of the economy, desperately needed someone to turn to for new advice and that a radio show would be a great lead-generating device.
They decided their efforts couldn't be a once a week kind of a thing. Luckily, several radio stations also liked the idea. They struck an arrangement with one — and started to broadcast.
At first, they focused the show on one topic, but they soon discovered they could appeal to a wider audience by taking on two or three subjects. Now, one show might cover, for example, the implications of rising interest rates and an update on new tax laws. Most of the time, they do the talking, but they also take plenty of questions from listeners.
About 2,000 to 3,000 people have called since the show started.
That interest has turned into a lot of new business. Revenues and assets under management have increased 50 percent since 2001, says Rankin; total assets under management are $85 million. And the show has brought in about 200 new clients.
It's the Process, Stupid
When Brian Kohute started a financial practice for HJ Financial Group, a CPA firm in Plymouth Meeting, Pa., four years ago, he quickly realized he needed some way to stand out from the crowd. What he did was to formulate his own financial planning process — and then name it and trademark the title.
Called the Progression of Wealth, the system includes six steps, which take a year to a year-and-a-half of financial planning sessions to complete. The first stage involves the usual data intake and discussion of short- and long-term goals. Next, he devises a report card on such areas as asset allocation, estate planning and income tax planning. Third, there's an evaluation of current investment performance, plus a budget analysis, benchmarked against the habits of people in a similar demographic group. After that, comes a closer look at long-term goals, an evaluation of risk, insurance and estate-planning issues, and, finally, a discussion of income tax planning.
But Kohute did more than develop the process and use it with clients. He also started running regular seminars at companies discussing various aspects of the system. And, a year ago, he wrote a book, which, he says, “has brought increased credibility to the marketplace.”
Kohute charges clients a quarterly fee to go through the process, as well as a fee for managing their assets; total assets under management are $150 million.
In the past 18 months or so, Steven Lear, a financial advisor with Affiance Financial in Minnetonka, Minn., has introduced three very different timesaving devices to client sessions, and his practice is thriving as a result.
It began about a year-and-a-half ago, when he decided to introduce a computerized “smart board” into client meetings. The board, a 72-inch screen connected to a computer, allows Lear to look at spreadsheets and other information at the same time as clients. He can instantaneously make changes, so clients, for example, can see how different moves might affect their portfolio.
Then, a year ago, he started presenting clients with an eight-to-nine-page state-of-the-world summary two-to-four times a year. It covers 11 topics, from business ethics to inflation, with an optimistic and pessimistic forecast for each and a section asking clients to rate their own level of optimism or pessimism. It also comes with a CD, so clients can listen, if that better suits their tastes. The results help Lear assess the client's risk tolerance. He also uses the document to cut down on the amount of time devoted to discussing the economy.
“During the downturn, I spent every meeting hand-holding, explaining my thoughts on the market,” he says.
Finally, in March came the last move. So he wouldn't have to spend time taking notes during client meetings, he brought in an intern to do the task for him. The result: He's able to focus more efficiently.
“We've had tremendous growth in the past year-and-a-half,” Lear says. So much, that he's hiring someone to run the business, which has $175 million in assets under management, so he can do full-time planning.
Says Lear: “We've revitalized the practice.”