From the January 2010 issue of Investment Advisor • Subscribe!

B/D Briefing: Alignment Time

A chat with Patrick McEvoy, CEO of Woodbury

In late September 2009, Patrick McEvoy changed jobs, moving from the presidency of Multi-Financial Securities, part of the ING broker/dealer network, to become president and CEO of Woodbury Financial, a 1,700-rep independent broker/dealer. Now reporting to Brian Murphy, chairman of Woodbury, a subsidiary of The Hartford, McEvoy calls himself a "sales guy who learned to become an executive," and who "got licensed shortly after the 1987 crash, and luckily I didn't have any clients then," McEvoy says he's "never stopped remembering how tough it is" to maintain relationships with clients in difficult times, though he also says that the "first thing I learned as a sales guy is if you listen to your clients closely enough, they'll tell you exactly what they need."

While at Multi-Financial, he says he built the firm on the "relationship model," something he plans on continuing, because, he says, "when you build a business on relationships, contrary to the Godfather, it's not business, it's personal. When it's personal, you have a tendency to deliver on your promise, which is the cornerstone of what we do."

Speaking of reps, McEvoy says that over the last 18 months, "the registered reps that are thinking of making a move are doing so for a whole different set of reasons. Financial packages and forgivable notes have shrunk for financial reasons, but more important, reps and firms--by which I mean advisors who are partners within a multiple-partner organization--they look at this business a whole lot differently now. That's in the wheelhouse of the way I do business--I comply, I align, I retain, and I recruit. That's my job."

In compliance, most reps these days want to be with a firm that has a good reputation and "no longer want to go to a place that's 'flexible,' because flexible compliance means we'll let you do what you want to do, and that doesn't work." The Hartford's compliance staff doesn't look at risk management, but at managing risk, he says, though "there will always be risk in our business. Five years ago we were talking about Class B shares, now we're talking about ERISA and fiduciary duty. It's not the challenges that make it hard, but staying abreast of them and being knowledgeable--and communicating to reps the reasons for implementing policies. "You can't communicate too much," McEvoy says.

As for alignment, McEvoy argues that "Our advisors are interested in aligning with a company that understands who its customers are. We've seen tough times before, we'll see them again. The Hartford's been around for 200 years, and I'm pretty comfortable with that."

To retain its advisors, McEvoy highlights one initiative in particular. Since, he says, Woodbury has many firms that are looking for that next-generation financial planner, citing the "chasm in our business," due to the aging advisor workforce, Woodbury is rolling out in the first part of 2010 a guaranteed practice purchase program. "If we can bring in an advisor or registered rep who has a significant practice, and they say, "I don't know what the future will hold. I need to bring in that next wave of advisor. I need to think of my business as a business, not just a sales organization. If I can align with an organization that can guarantee, or help me strategize about what that purchase price can be, that's my long-term approach to staying in this business." Woodbury's role will be to help reps value their practices, find mentor programs to help them build their practices into businesses, align reps with like-minded peers and, McEvoy says, in some instances help with financing for buying or selling.

As for recruiting, McEvoy acknowledges that right now it's a "target-rich environment with a lot of opportunity," but says he wants to continue Woodbury's tradition of concentrating on increasing average production per rep, not having the most reps, citing the fact that Woodbury's average production has risen over the past four years from $40,000 to more than $140,000 in 2008. "That comes," he says, from "investing in firms whose model is growth."


Group Editor-in Chief Jamie Green can be reached at jgreen@investmentadvisor.com.
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