Tom Gau is at the helm of one of the most lucrative financial planning firms in the country. In many ways, the story of how he got there parallels the transformation that is occurring throughout the financial services industry.
Initially an accountant, Tom had branched out into creating financial plans for his clients, but soon realized that many of the plans were not being implemented. Worse yet, if they were implemented, he wasn't getting any of the action. One day, a client with $10 million came in for a financial plan. Tom created the plan, and then sent the investor to a stockbroker to implement it. A week later, Tom received a nice note from the stockbroker thanking him for the new client--and his new Porsche!
Tom decided the stockbroker's business model was much better than the accounting model he'd been using, and he decided to become a licensed financial planner who actually implemented investment and insurance recommendations.
When I first met Tom in the early 1990s, he was already a very successful financial planners. Tom had built his business by conducting public seminars throughout California, and had established relationships with HR directors in the top aerospace companies in the state.
Over a six-month period, I helped him develop additional strategies to attract and serve the employees who were receiving rollovers from the aerospace industry. We set up a series of client appreciation breakfasts and encouraged the clients to bring their friends. While sitting at one of the breakfast tables with four clients and three of their friends, I realized that his clients were truly his fans.
Tom had formed a partnership with an estate planning attorney, and together with their associates, they offered securities, insurance, retirement planning, estate planning, comprehensive wealth planning, and tax preparation. They were one of the first financial planning organizations to provide a total solution for their clients' financial services needs.
Tom was amazingly productive. He was always full of energy and upbeat even though he worked unbelievable hours. In a good week, Tom would have more client meetings than many financial planners have in an entire year. In one week that I know of, he had over 100 such meetings.
Within a few years after I met Tom, he was generating over $3 million a year in commissions and trails. He had become one of the most successful financial planners in the country.
As if that weren't enough, Tom was starting to do a series of workshops for financial advisors to help them learn his success strategies. Through his "Million-Dollar Producer Boot Camp" and other speaking engagements, he has trained thousands of financial advisors, insurance agents, and registered representatives throughout North America.
Tom also has a quick mind and a quick wit, and he has more designations than anyone I have ever met, including CPA, CFP, MBA, PFS, CFS, and others. In addition, Tom has a photographic memory.
What motivates Tom to work from 7:00 in the morning until 9:00 at night? He is already one of the top producers in the nation and does not have to work anymore. So why does he continue to work? "Because I love helping people. I love people," he says, simply.
Throughout the 90s, Tom worked extremely hard and built a very, very successful commission-based financial planning firm. But he had a bigger vision. He and his wife had bought a house in Ashland, in southern Oregon. For six or seven years, Tom commuted between Ashland and Southern California. He would spend two weeks in Oregon and then two weeks in California working. His dream had always been to move to Ashland where his family lived full-time. In late 1999, Tom made a transformation in his business that also helped transform his life.
At that point, he had over 2,000 clients and a large advisory firm with 40 employees. But his "success" was starting to control him. He had too many clients and not enough time in the day. His business was booming, but his quality of life was suffering. When I visited Tom one day during that period, he was visibly worn out and stressed. His commission-based business model had taken him as far as it could go. Something had to change.
He spent almost a year researching his options and finally decided to convert his best clients to a fee-based investment advisory model. Once he made up his mind to move, he moved big. Within 90 days, he had transferred 185 clients with about $190 million in assets into a fee-based money management relationship. He sold the balance of his clients and his business to another advisor. Once he had accomplished this, Tom was able to move full time to Ashland where he started a new business, Oregon Pacific Financial Advisors.
It turned out that Ashland was perhaps even a better place for Tom to run a financial planning business than California. Why? Ashland has attracted an eclectic group of financially successful people from throughout the United States. They have much more complex needs than the retired engineers Tom served in Southern California, and they appreciate him immensely because of his comprehensive approach to wealth management.
One of Tom's clients is a very successful film producer who periodically commutes to Los Angeles. His wife told me that they had had business managers for over 30 years when they lived in Los Angeles, "but no one has ever taken better care of us than Tom."
The Secret Sauce
How does he do it? First, Tom believes that people's personal finances are a system, and that you cannot advise clients unless you understand their entire financial picture, their risk tolerance, and their goals.
And because of his systems orientation, he is also very focused on creating a streamlined business model. He doesn't want to do anything unless he is going to do it a lot. Tom has learned to attract clients who fit perfectly into his standardized business model. He focuses almost exclusively on comprehensive wealth management for people with substantial assets in their retirement plans. Most of his clients are multimillionaires. If they do not fit his profile of an ideal client, he tells them that they will be better served working with another advisor.
He actually turns away more business than he takes on, and is very, very careful of the clients he engages. He now has increased his minimums to half a million and is quickly looking at a million-dollar minimum account size.
Because Tom works with many clients who have the same problems, he is able to provide high-quality service with only a modest amount of work. By converting to a fee-based business, Tom has been able to cut back his marketing dramatically and spend more time working with his top clients. He now has more than $2 million a year in gross revenue from fees. At the same time, he is building up the membership in his personal coaching organization.
Presents and Parties
Tom does some amazing things to build relationships with his clients. For instance, last Mother's Day he sent out Beanie Babies to all of his clients who were mothers. He had such detailed information about his clients he knew what their favorite animals were, and where possible, sent them their favorite Beanie Baby animals.
Last July my wife and I attended a party Tom held at his house for about 250 of his clients, friends, prospects, and centers of influence in Ashland. It was called "The Wild, Wild West," and the theme, since we were in a bear market, was "The Bull Always Wins." It was a great opportunity for his clients and their friends to mix and mingle. Tom was dressed as the sheriff of "Gau Town." He had built an entire small town, complete with a bar, bawdy house, and mechanical bull. It looked like a set for a western movie, all on his property.
Later in the afternoon, a bull and a bear appeared. Tom and his deputies shot the bear in a symbolic effort to end the bear market. His clients and guests loved it.
Now that Tom has moved his business to Ashland and converted to fees, he is able to spend more time with his family and pursue his other interests. He has built a successful training company to help other financial advisors learn from his systems, processes, and knowledge. His new Web site, www.MDProducer.com, offers a complete suite of practice management tools. He is also advising his broker/dealer on recruiting and compliance, and speaks at top-producer meetings across the country.
Having known Tom for almost a decade now, it is interesting to me how, for many financial advisors, he is very controversial. They wonder how can he really be giving great service if he is so busy. The answer, I believe, is because he cares, because he has set up great systems, and because he has more energy than any three average people.
It's hard to say where Tom is going next, but it is clear to those of us who know him that this is just the beginning. And in many ways, that's like the entire investment advisory business. We are still in the beginning stages of our evolution. There is a tremendous opportunity for all of us ahead if we are truly client-centered, we are experts in our niches, and we build systems to maximize the benefits to the clients and to simplify our business models.