Mark Balasa has been an advisor for a long time. As CEO and CIO of the highly regarded wealth management firm Balasa Dinverno Foltz in suburban Chicago, and as a member of the Alpha Group of accomplished advisors and industry leaders, Balasa has counseled many clients through multiple market cycles. So when he says in a conversational but concerned tone that he’s never seen clients exhibit such a “preoccupation with politics” as they do now, you pay attention.
The dot-com crash of 2001-2002 and the financial crisis of 2008-2009 “left scars” among clients, he said in an interview in New York on Tuesday, while the European debt crisis which first arose last year and the S&P downgrade of U.S. debt “brought that fear right back.”
The fear is far from being a partisan response, Balasa (left) is quick to say, pointing out that clients of both a Democratic and Republican persuasion were feeling that “the country’s lost its way,” particularly when it comes to “runaway spending” by the government, and that “politics is trumping economics” both in Europe and at home. They feel a “weight on their shoulders,” which Balasa in his conversations with clients seeks to allay by keeping the focus on the clients’ own plans and how well they’re doing despite their misgivings about the country.
With 17 CFPs on staff, including the six members of the management team, Balasa characterized Balasa Dinverno Foltz as being in a “virtuous” cycle in which the business has hired “six good people” in fall 2011 as more clients are being brought on board. He cautioned, however, that “it’s harder to find people than you might think.” He spoke approvingly of the graduates of financial planning programs such as at Texas Tech University and the University of Illinois, one of whose graduates the firm hired. Those young people have many skills that older advisors might lack, though he said he agrees with Mark Hurley that “it takes 10 years to acquire the proper bedside manner for being a wealth manager.”
Despite the concerns of many of his clients, Balasa remains optimistic about the future of the business, the industry and the country, though he cites his attendance at a PIMCO conference where former Fed Chairman Alan Greenspan fretted over the lack of a strong upsurge in employment, which usually accompanies a recovery.
Having decided 10 years ago to convert Balasa Dinverno Foltz, founded in 1986, “from a lifestyle to a business,” the company knew it needed more processes, “more of a structure” to accommodate and encourage growth, which included hiring a chief operating officer for the firm, which Balasa said now has more than $2 billion in assets under management. As for succession planning, Balasa says “we want to do it internally.”
The firm has two major niches—small business owners and women, the latter headed by management team member Heather Locus—and Balasa says that in 2011, half of the firm’s new clients came by way of referrals from existing clients, with the remainder coming from centers of influence and the firm’s participation in the referral programs it participates in with custodians Schwab Advisor Services and TD Ameritrade Institutional.