A typical day for independent broker Kevin McBarron is well, there is no such thing as a typical day right now.
In July, McBarron, 40, bought Wealthcrafters, an Irvine, Calif., practice and made a cross-country move from Florida. He is trying to run and grow a business while getting settled in a new state.
McBarron became an independent rep in 1997 after more than a dozen years working for Prudential Securities and Merrill Lynch in Clearwater, Fla. He affiliated with Sentra Securities Corp. and opened his own office also in Clearwater. Then, he acquired Wealthcrafters from a different broker/dealer for a change of pace and scenery.
I like technology, and California Irvine in particular is way ahead of everybody in technology, McBarron says. Plus, he didn't like where his previous hometown was headed. The waterfront is Clearwater was changing, and I was going to buy a new home anyway.
His move cost him only two of his 400 customers. Combined with those he acquired, McBarron now has 700 clients with assets under management of about $60 million. His 2000 production was just under $500,000 from a mix of commissions and fees.
I couldn't have made the move if I still worked at a wirehouse, McBarron says. The branch manager would not have been happy, and my book would have been cannibalized. You're not allowed to buy or merge a business if you work for a big wirehouse.
McBarron is more than happy to leave wirehouse ways behind. I love the freedom here, he says. It's a huge benefit to you and clients when you don't have to answer to some corporate entity. I can run this business with only the clients' welfare in mind.
However, the transition is costing him personal time. Running his own shop has extended his work hours from 9 a.m. to 9 p.m. And even before going in, he watches the market opening, makes a few calls, reads the business sections of the local papers and checks his favorite stocks while doing the morning daddy routine with his three daughters.
Once in, he puts out any office fires and runs the business by fielding client calls, checking reports, making sure orders took and executing trades.
After the closing bell at 1 p.m. Pacific time, it's lunch time. Sometimes I'll have a nice meal in a good restaurant with co-workers or clients, other times it's a burger and the sports page at Burger King.
McBarron then spends the afternoon trying to grow the business with more client calls and appointments. He averages three meetings a day.
The evenings, from 5 to 9, are just as busy. I make at least two of what I call big calls to [high-net-worth prospects], McBarron says. He also meets with clients after work, does scores of chores and tackles stacks of paperwork.
On top of that, McBarron is scouting new digs. Part of the business purchase required that he buy the office lease, but it's not up to his standards. Currently, Wealthcrafters is housed in an industrial park under the flight path at Orange County's John Wayne Airport.
We'll be out of here and in an office with a good view of the mountains soon, he says. I like windows, and I don't like it when clients have to pay to park.
Aspiring to More
McBarron has a vision for his practice. Currently, he's the lead rep in a two-rep office with a registered sales assistant and a temporary administrative assistant. Broker Will Rae was McBarron's first California hire. McBarron foresees a staff of three brokers and two sales assistants. Adding to the ranks will ease his burden.
I want to be fully staffed so my typical day consists of following the market, talking to clients and being done by 4, McBarron says.
While he embraces the opportunity to build his practice, McBarron misses the comfort of walking away from it all at the end of the day, he says. Being an independent requires a heightened sense of responsibility.
If something goes wrong, you're it, he says. You can't blame the branch manager.
However, he favors certain positive aspects about his arrangement, including controlling with whom he works. At a wirehouse, you can't hire and fire, McBarron says. They assign you an SA, and you have to share your SA with four others.
Plus, McBarron likes his environment his way. I couldn't even get a television in my office, he remembers. Some rep in Arkansas was more aware of what was going on than me, a Merrill Lynch broker. He now has a TV in the outer office and another a few feet from his desk both tuned to CNBC.
McBarron gets help with managing the financial demands from his wife, Brenda, a CPA. She does the books and covers the office expenses, he says.
McBarron has budgeted $125,000 for expenses this year, but expects that to increase after he finds a better location. I know that's high-end, he says. Some guys spend $40,000 for a dinky office and part-time help, but I know what I want.
Until he feels more settled, McBarron is keeping his nose to the grindstone. He concedes: I do miss the camaraderie of joking with, laughing with and learning from other brokers. Once I get this business up and running the way I want, we'll have plenty of time for fun. And I plan to have more of it than I did at the wirehouse.
Business Strategies:
- Build business by acquiring another practice and integrating it with your own.
- Ensure your office environment is communicating the right message about your services. If it's not, change it.
- Formulate a long-term vision of your practice, including staffing needs.
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