Industrial age publisher and philanthropist Frederick Bonfils said there is no hope for the satisfied man. If that’s the case, Karl Frank is full of hope.
“I’m never satisfied,” Frank says matter-of-factly when asked about his advisory firm.
It’s apparent from his background. The president of Denver-based A&I Financial Services, a Geneos Wealth Management-affiliated firm, holds three masters degrees. He earned an MBA and Master of Finance from the University of Denver, and a Master of English from the University of Colorado.
He sits on the Board of Directors for the Financial Planning Association of Colorado and leads the organization’s public relations efforts. He started out in his career with Lehman Brothers before moving to AIG.
“If I ever leave Geneos, short the stock,” he jokes, before emphasizing he’s never been happier with a broker-dealer partner.
As Frank is first to admit, he “married well.” His wife’s family had an advisory firm, one that he calls a “a really nice, comfortable lifestyle and no exit plan.”
“Although I certainly didn’t start out as an exit plan, I turned into an exit plan and bought my in-laws’ practice two years ago,” he says. This allowed them to sail into retirement—literally. "They’re floating around on a yacht in San Diego Bay right now.”
The firm (“A” and “I” stand for assets and income) has a laser-like focus on helping business owners with their planning and succession needs, something Frank considers a passion, one born of tragedy.
“The reason why I’m here is that my dad had a business and died suddenly 13 years ago,” he says. “That was a life-changing experience for me. I thought, ‘I need to find a way to do something meaningful. Here’s a guy who spent his whole life building up this wonderful firm and had plans of retiring very wealthy, and he couldn’t do it.’”
Frank notes the dual experiences of his father’s passing and being his in-laws’ succession plan means he’s “seen it from both ends; the right way to plan for the transfer of a business and the wrong way. With my in-laws and the time they are now enjoying, I’m looking at my own future.”
The firm’s strong performance on behalf of Colorado-area business owners means it’s in the process of moving into new office space that’s twice the size of the previous space, a significant achievement in the current market environment.
“We’ve got 15 people working with us and we continue to grow,” he says. “We’ve got the luxury to specialize. We successfully went through the dot-com crash of the early 2000s, and this most recent economic crisis was one of the best growth opportunities we’ve ever had because we had already been through the previous downturn. We were able to bring additional value to our clients beyond investments and alpha, beta and all the other Greek letters.”
Frank says he’s formalized “every step of the client experience from the beginning to the end.”
“Our motto is ‘We help you grow and protect your investments and let you choose how you are going to be taxed.’ Three of the probably five things our clients want are investment protection, growth and tax help. But there are others. Investment consultation is a part of it, and everybody out there does it. Protection is taking on increased significance. You just can’t, in today’s world, sit there and do nothing. Our clients are coming to us and saying ‘My gosh, what in the world can we do to protect what we’ve got? We’ve got so much volatility with our business income and revenue and so many threats from regulation that are increasing our costs. We’ve got higher unemployment costs than we’ve ever had before. We’re really, really worried about health care costs in the next two years.’”
Whether his clients are Democrats or Republicans (Frank says they’re half and half), nobody is happy with the situation in Washington, he says. Not that it’s necessarily impeding them.
“Every single one of our clients is growing. Every single one of their firms is finding ways to pull themselves up by the bootstraps and work harder, maybe harder than they ever have. Nobody’s making this look easy right now. But we’ve got to protect it. And we can’t, as advisors, add investment volatility into it.”
On the tax planning front, Frank says he isn’t “tearing apart a tax return and pretending we know what we’re talking about. Rather, it’s planning at a level that clients feel like they have a sustainable business going forward. We know what’s coming at us from a tax point of view, and I’m reducing that risk.”
Part of Frank’s success stems from the network of professionals he’s developed, particularly with attorneys in the area who help him properly structure exit planning deals. He also has an in-house CPA and an in-house tax preparer, something that isn’t necessarily a revenue driver for the firm, but “it really helps to have that available expertise.”
“Too often our business owner clients feel like they’ve paid a CPA to come out on the battlefield, count the corpses, bayonet the survivors and tell them what the damage is after it’s done,” he says. “The CPA hasn’t sat in on other planning sessions with the financial advisors and attorneys, so they feel they haven’t got the complete picture. What we’re able to provide is an avenue for a handful of fantastic professionals to sit around the table and do the planning that they love to do and prove their worth, whether it’s with an attorney, a business evaluation expert or a property and casualty insurance guy. We’re brainstorming how to protect this guy’s assets, help him choose how he wants to be taxed and leave a legacy.”
It’s this last part, wealth transfer and leaving a legacy, that (for obvious reasons) has special significance with Frank.
“Some folks have kids, some folks don’t,” he notes. “Everyone wants to have a dollar that outlives them. We help them achieve that goal.”