David A. Tufts' Park Avenue branch office in the soaring MetLife Building is right behind Grand Central Terminal, that bustling train station of perpetual coming and going. But for manager Tufts' advisors, coming and staying is the way the world turns.
Tufts has managed Oppenheimer & Co.'s largest office, of a total 80 branches, for more than two decades now. One of his strongest suits? Keeping FA turnover low. With a sharp focus on high-net-worth clients, his 115 advisors manage assets of about $9 billion, in addition to substantial institutional assets.
During the past tumultuous year, when most firms were laying off FAs right and left, Tufts, senior managing director-investments, hired eight.
What's the big attraction? Investment bank/brokerage Oppenheimer doesn't offer those huge signing bonuses other firms pay; nor does Tufts conduct a formal training program.
What he does offer is a big pay-out, which steps up as production increases and, above the $850,000 level, rises to 50 percent.
Then there's Tufts himself. A former 10-year Merrill Lynch top advisor, sales manager and branch manager, he joined Oppenheimer as New York assistant branch manager in 1981 and has been with the firm ever since.
Forthright but with urbane charm, the engaging industry veteran is rare in his approach to managing advisors.
"My style is to leave them alone and let them create the business they want to create. It's astounding how that works for me," says Tufts from his wealth management office at Park Avenue and 42nd Street, not far from the United Nations.
The silver haired six-footer has a chatty sophistication, easy laugh and abundant energy. At 63, "I have no interest in retiring," he says.
He is from a New England old-money family that arrived in America in about 1623 and wound up owning most of the Boston suburb of Medford, Mass. His great-uncle Charles founded Tufts University. Growing up amid wealth is a happenstance that's come in handy in catering to Oppenheimer's target high-net-worth clients.
"I understand wealthy people. I understand what they want. I understand how they like to be treated," the manager says.
Indeed, Tufts sets the tone in his large branch, which occupies the former Pan Am Building's 24th and 25th floors, an acre each in size, or about as big as two football fields.
A prep school grad who bought his first stock -- General Motors -- at age 12, Tufts describes the branch environment as "collegial, unusually civil and quietly competitive."
The downturn "has obviously made [business] more difficult," he says. "But in many respects, it's opened up things: People that used to only invest in real estate and say, 'Please -- no stock!' are more open to investing in things that are more liquid and equity-oriented."
Nonetheless, Tufts, registered back in 1972, is a realist. "I communicate the truth to the advisors. The problem with this business is that it's sort of bipolar: either going to the moon or going to nothing. You try to control that by saying, 'Look, this is the world we live in.' I don't stand up and tell them, 'Here's something that will change your life. Buy this!' But I'm optimistic and try to find things that are good buying opportunities."
His private 25th-floor office overlooks Park Avenue and Grand Central's 13-foot Beaux Arts clock. Other windows capture an East River view. With a mix of antiques and abstract art, the room was designed by one-time assistant to Salvador Dali, Roger de Cabrol. Tufts' custom-made desk is a unique square conference table seating five.
Last year he gave the public areas a face-lift. Now there are regency-style conference rooms and oriental carpeting in the reception area.
"A year ago wasn't a good time to spend money," he says, "but I thought we needed it. It made everybody feel better."
Focus on Retention
Every year Tufts creates a growth plan. "Usually it's 'Up 10 Percent' -- and usually it's something you have no control over because one day you'll do $100,000 and the next, $500,000. But what you can control," he says, "is getting and keeping them. Most branch mangers forget about keeping the best [advisors]. That's crazy. If you lose someone doing a million bucks, it's going to take three [FAs] to replace them that first year."
The last real turnover at the branch, which Tufts has managed for 21 years, came in 2003, when, during a sticky platform conversion -- after a merger -- four FAs opted to split.
To Tufts, the route to retention means, in part, not being a micromanager. But that isn't required, anyhow, because he hires only self-motivated advisors.
"My job is not to motivate people but to hire people who are smart, motivated and ethical. My job is to make sure they have good ideas to choose from and to get rid of their problems. I communicate what I know is happening," he says, "but I don't do rah-rah speeches." Sales contests have no place on Tufts' agenda.
About 60 percent of the revenue is commission-based. One hundred of the advisors have high-net-worth retail and asset management books; 15 FAs conduct middle-market institutional business.
Tufts encourages the advisors to team up. "If one and one make three," he says, "that makes a lot of sense." There are also a number of ad-hoc teams. "Let's say somebody has a great relationship with a hedge fund manager but doesn't want to do the business, he'll split it with a middle-market guy who'll do most of the work -- the other will keep up the relationship."
Recruiting, of course, is key; and Tufts can tell within an interview's first 10 or 15 minutes if he wants to make the hire. He's passed up many a big producer simply because he didn't like them. "I just knew that when they'd walk up to my door, I was going to get a knot in my stomach. So I'm very spoiled: Everybody in this office is here because I wanted them here," he says.
The friendly atmosphere of a smaller firm is appealing to most interviewees. But "the problem is they want a 250 percent signing bonus," he says. "I tell them right away, 'That's not going to happen. So don't waste my time and yours.'"
Here's his philosophy: "If you hire people who want to join you strictly for the up-front money, you're going to lose them. We pay less initially than other firms -- 60 percent to 75 percent of the FA's trailing 12 months' production -- over the course of the first year. But ultimately they make a lot more money because our pay-outs are probably the highest on the Street."
As for Tufts, who is paid a salary and bonus, "I'm one of the least money-motivated people you'll meet," he says. "I just happen to love winning."
And he's won big. He was an original investor in the historic Odyssey Fund, "[likely] the most successful hedge fund ever," he notes. And when Oppenheimer, which he joined as a general partner, was sold -- during a years-long series of mergers and acquisitions -- he got a nice slice of the pie. Further, with impeccable timing, he buys and sells apartment buildings and has even realized profits investing in Manhattan restaurants. At present, he co-owns downtown's SouthWestNY.
Tufts lives in a stunning loft in the Big Apple's trendy NoHo section that was featured in a six-page Architectural Digest spread. He also owns a home in the Hamptons, Long Island, and a South Beach, Fla., pied-?-terre.
Though his investment banker grandfather, Bowen Tufts, was one of New England's most accomplished and prominent businessmen, his dad, David, who ran a shipping line's operations, was "never a huge financial success. When I was growing up," he says, "we didn't have a lot of money."
Still, Tufts attended a private day school, where at least one classmate was presented with a Rolls Royce at the age of 16.
"You saw all these things that money, if properly invested, can do," he recalls. "It gave you a little more of a desire to make it."
Before that chance arose, however, Tufts was shipped off to Vietnam. Upon graduation from Hobart College in 1967, with a B.A. in English, the draft was in full swing. To avoid Vietnam, he applied to and was accepted by Naval Officer Candidate School. The move backfired, however, and he ended up in Vietnam on riverboat patrol for a year. During the Cambodian invasion, Tufts was on the Cambodian border.
"You're sitting there, and then you're being bombed. It was pretty hairy. You could predict nothing -- but it was great training for going into the unknown," says the former four-year naval officer.
Not a Micromanager
The manager arrives mornings at 9:00 a.m. or 9:30 a.m. Sometimes that's following an 8:00 recruiting or staff breakfast at the Yale Club across the street -- but always after a work-out at the gym or on his own StairMaster.
At the branch, Tufts relies on a six-person management team. "Virtually all the people I've promoted from within," he notes.
Touring the office daily to visit his numerous FAs isn't daunting for the fit Tufts, and he conducts such walk-abouts frequently.
"It's very important. I get ideas: What's working here and there. If there's a problem," he says, "I learn. Part of it's social, but part is also advisors saying, 'I'm not getting this done. How do I do it?'"
Tufts encourages newer FAs to hold client meetings right at the branch. And in his private office, he sees about three or four folks a week. "I give my little spiel on the firm and sort of set it up" for them to, perhaps, meet hedge fund or asset management experts, who are located on the premises.
Tufts receives 300 e-mails a day, but he's no computer nerd -- and proud of it. "Sometimes people get too caught up with the technology and not enough with the message. I don't know a lot about computers," he says, "but I can write so that the advisors know what I'm thinking."
His frequent two-page thought pieces address a wide range of topics, including a neat way for advisors to talk up their wealth management approach at cocktail parties.
Lunch is usually with FAs or potential recruits. Occasionally Tufts attends on-site advisor seminars. Sometimes he hops over to the Yale Club for exercise and a tuna sandwich.
Though he holds no formal training program, every year he hires a few advisor hopefuls, who learn the ropes from experienced Oppenheimer advisors. Some newbies join teams; others go forth on their own.
The hands-off Tufts is tough when required, as when an advisor dismissal is called for. But "if you make the right hiring decisions," he says, "that's rare. It's occurred only when someone does something patently unethical. Years ago I had to fire my largest broker. He did something that never would have been found, but I found it. Once I distrust somebody, I don't want them here."
At present, advisor compliance problems are a non-issue, Tufts says. "The mistakes that have been made were in violating my own rules; namely, if someone is way too active a trader at another firm, they'll be way too active a trader here."
Evenings typically find him last to exit the branch, at about 6:30 or 7:00. In general, he prefers to confine manager-advisor relationships to the office.
"I can't go out for a beer with everybody every night. It's just not my style. But the advisors know they can come to me with their problems -- and you name it, I've heard it. I'm sympathetic and helpful," he says.
On the assumption that smart adults need scant supervision, Tufts is no stickler when it comes to dress code. But a year ago, the well turned out manager -- who wears suits four days a week and a sports coat on Casual Fridays -- thought things were sliding out of control: employees were arriving, increasingly, in tattered jeans and collarless shirts. He titled his branch-wide e-mail, "Office Appearance."
"Casual Fridays have led to casual all-the-time," he wrote. "I've been seeing many more of you lately dressing as if you've just walked off the cow pasture rather than the 18th green at the Greenwich Country Club...We've spruced up the public areas so that the image we project is in tune with [our] high quality of service...Please do your part."
Reflecting on his brand of taskmaster-free leadership, Tufts says: "I never really got the 'I am the boss! We'll do it my way!' thing. That may be one reason my people tend to stay."
Tufts' Career Ascent
David A. Tufts was born in Winchester, Mass., and grew up in Old Greenwich, Conn. He is descended from a line of industrious early Americans -- and one outrageous one: Uncle Sonny Tufts, a 1940s-1950s actor with a short but controversial movie career and a scandalous private life.
As for David, what he carved out is more in keeping with that of Bowen Tufts, his highly successful investment banker granddad, who was on the boards of directors of 60 different companies.
Between college graduation and leaving for naval duty, Tufts took a short-term back-office job at Merrill Lynch in Stamford, Conn. After the service and a stint in public relations and sales at the Kennedy Center for the Performing Arts, he returned to Merrill. This time, based in the firm's big Washington, D.C. branch, Tufts, whose investor mother had sparked his interest in the market, was career-minded.
Soon to be one of the top two or three brokers of a total 70, he nevertheless chose the management route.
"I love leading and teaching, giving people ideas," he says. Within five years, he was promoted to branch manager of Merrill's Alexandria, Va., satellite office.
But wooed by Oppenheimer & Co., Tufts, in 1981, accepted an offer to come aboard as assistant branch manager in downtown New York City, the firm's largest office. That's when he dropped his book and went into management full time.
One of his biggest challenges came with the 9/11 attacks on the World Trade Center. At the time, his branch was located diagonally across from the towers, in a building that shrapnel had mostly destroyed.
"Everyone got out alive, but we were blown apart -- scattered," he says. In less than a week, however, Tufts had things running -- with some advisors in an uptown office, several in a former basement cafeteria and others working from home.
Tufts, on the board of DirectEffect, Rockefeller University's HIV-AIDS research fund-raising arm, is divorced with two married daughters and a baby granddaughter. At his Hamptons, Long Island, beach house, he and long-time companion Cris enjoy sailing and water-skiing.
Glad to be working at a company that, as he puts it, "flies under the radar," Tufts says: "Of all the firms, Oppenheimer doesn't make news. And that's a wonderful thing!"
Freelance writer Jane Wollman Rusoff is a Los Angeles-based contributing editor of Research and is the founder of Family Star Productions.
PHOTO by Matthew Furman.