It was high time to cut the cord. Not that cord. The imaginary cord that tethered Aaron L. Saperstein, a then-transactional broker, from his office chair to his desktop computer. In the heyday of the '90s bull market, the select group of 20 high-net-worth clients for whom he processed trades had made it clear that his place was nowhere but at the screen watching the market -- constantly.
Aaron L. Saperstein, Managing Director-Investments, Westchester Wealth Management Group of Wachovia Securities, Purchase, N.Y.
AUM: $220 million-plus (Saperstein), about $600 million (Total Group).
His warning: "Clients should never leave you for the next level of service."
One afternoon, the clients screaming because he briefly left his post shortly before a stock they owned plunged on a missed-earnings rumor, the broker thought: "'This has to stop. The cord must be severed, or I'm going to leave the business.' I felt like a bookie aiding and abetting people's gambling instincts," recalls Saperstein, who split for a planned vacation the following day.
When he returned, he switched virtually "cold-turkey" from transactional broker to consultative advisor. Most clients, he says, stuck around.
Seven years later, he is managing director-investments of Westchester Wealth Management Group of Wachovia Securities, in Purchase, New York. He manages more than $220 million in assets; and in total, the group's trio of million-dollar producers have about $600 million under management.
Their team is one of 200 Wachovia groups employed under the firm's semi-independent Profit Formula structure. Responsible for their own expenses, they receive a higher -- 75 percent -- payout, which in turn enables them to realize an increased profit margin.
The son of a physician and a psychotherapist, Saperstein, 44, was born in Oregon, reared in Connecticut and bunked at a Jewish summer camp and a Catholic prep school ("I have all kinds of stories!").
Today, the ex-broker's niche is advising high-net-worth and ultra-high-net-worth families. Many clients are in the financial services industry. "Even though they do something very well," he says, "sometimes they're not the best managers of their own funds. It's good to have a little separation between them and their money."
Client Steven Beck, an institutional bond salesperson with Deutsche Bank, in New York City, came to Saperstein "on the heels of a blood bath" to his personal portfolio. "I was beaten up and worn out. I gave Aaron's system a shot -- and now, seven years later, he has 100 percent of my assets," says Beck. "It's all managed on a discretionary basis. He's a class act, and everyone I've referred to him agrees."
The FA's "system" uses money managers -- including his two partners -- to feed cash flow from fixed-income investments into the portfolio's equity portion via dollar-cost averaging.
"Making money in the market is like a game of golf: You don't have the greatest round of your life by hitting one spectacular shot after another. It's about keeping the ball in play and inching forward," says Saperstein, member of a tony Westchester golf club and also active in The First Tee national program, which teaches inner-city kids life lessons through golf.
Wachovia's Profit Formula's entrepreneurial focus suits the fee-based go-getter just fine. "I manage my own P&L, but the firm does a lot of things for me. For example, I don't have to worry about creating a profit-sharing plan."
Last July, Saperstein's group moved from the firm's Old Greenwich, Conn., branch to its own stand-alone suite in Westchester County five miles away. Clients seated comfortably in roomy club chairs and sofas view presentations on flat-panel TV screens in what Saperstein calls a "holistic wealth management office."
"We know how to drill very deeply and get at the core of what makes people tick," says the FA, who includes a behavioral psychologist in meetings with "dysfunctional families" struggling with issues of wealth transfer.
"When you impact clients' lives on a substantive, emotional level, the concept of their becoming cheerleaders for you and wanting to refer people is an easy thing," he says.
On top of that, Saperstein is passionate about client service: "The business boils down to almost 90 percent of being responsive to clients on a timely basis." For quarterly reviews, he often uses time-leveraging Web conferencing. Online, he can display and annotate spreadsheets, and clients see his face in real-time video via a camera attached to his computer.
Saperstein pursued a career in financial services because, he says candidly, "I felt that money was important, and I wanted to be independent." Graduating from George Washington University with a bachelor's degree in business administration, in 1985 he took a job as a transactional broker at Lehman Bros. in New York City.
Four years later he moved to Smith Barney and five years after that, to First Albany, leaving there for First Union Securities, in Connecticut, which firm subsequently acquired both First Albany and Wachovia's brokerage arm. Just what has his year-2000 epiphany at First Union meant to Saperstein? "The growth in assets, the growth in meaningful relationships -- there's just no comparison," he enthuses.
Saperstein thinks that with the trend to fee-based wealth management practices, which serve fewer clients but manage larger assets, advisors will increasingly seek alternate payout arrangements like his, for example. The hybrid structure is "a good intermediate step for people that have created a recurring revenue model and want to become more entrepreneurial from a compensation standpoint."
Is the FA's next step to, um, cut another cord and go completely independent? "Wachovia does have a channel to do that," says Saperstein. "The choice is there. We're looking at it."
Freelance writer Jane Wollman Rusoff is a Los Angeles-based contributing editor of Research and is the founder of Family Star Productions.