Welcome to Research magazine’s Advisor Hall of Fame, now in its 23rd year. (Full list: Past and present winners.) This eagerly anticipated annual feature has become a benchmark of excellence in our industry and an example to all of the rewards that result from effort and integrity.
Candidates who pass our rigorous screens have served a minimum of 20 years in the industry, have acquired substantial assets under management, have demonstrated superior client service and have earned recognition from their peers and the broader community for the honor they reflect on their profession.
Jay Nagdeman, president of Suasion Resources in Fairfield, N.J., performed the contest’s final judging, bringing to the task his extensive industry experience as a top consultant on financial services marketing.
When advisor Drew Bilotta left his longtime corporate home in 2007, he was very close to, as he puts it, “just” retiring. He couldn’t. “It would not have rung true for me to say ‘Oh well, I made mine. Now you’re on your own.’ There was something bogus about that. This is what I do.”
Bilotta, 52, has a deep need not just to give back, but, simply, to give—a characteristic that shapes not only how he operates as an advisor but who he is as a person.
“I’ve got to do it,” says Bilotta, founder of PAX Partners, a Raymond James & Associates affiliate in Wayne, Pa. “It’s a driving force.”
Since joining Raymond James & Associates from Merrill Lynch, Bilotta has sought to construct what he calls “the grail of perpetuity,” a succession plan that will allow him to “close the loop in gratitude” for all his clients have provided him.
Bilotta, who manages $440 million in assets for 350 households, currently works with a nephew-in-law whose practice is concentrated in corporate executive benefits. He is mentoring him on the private client business. PAX Partners also has three client service associates.
Bilotta is contemplative about his leadership style.
“There is no task too small I wouldn’t do. If the phone rings, I pick it up. I’m organized and structured. I’m here at five every morning, out at 4:30, like the rat on the wheel. One of my failings is you can’t expect people you lead to be just like you,” says Bilotta, a certified financial planner since the 1980s. “I’m trying to change that.”
What Bilotta does do well—extremely well—is to engage people.
“I want to hear what they think. I want them to be affirmed in the positives, reflect on the negatives—and act on it. It’s much like my business. I know there are many who would scrutinize my business and tell me how to do more business. I understand that,” he adds. “If business is your driver, I know how more business can be done.”
More important to Bilotta than building assets is tending to people with sensitivity and compassion.
“To me that’s number one. I don’t need more business,” he says. “That’s not why I come to work in the morning. I come because I’m very committed and devoted to these relationships. I’m juiced by them. I love this element of it. That’s what I’m trying to perpetuate.”
Bilotta got his start in the business at Merrill Lynch when he was 22, making as many as 200 cold calls a day. He liked it.
“I believed in being straightforward and I was amazed at where you could take a phone call and how you could engage in the beginning of a relationship,” says Bilotta, who has a bachelor’s in business administration from the University of Pennsylvania. “If the person was happy with their advisor, I’d say: ‘Good. I hope that’s what my clients say to the next guy who calls them.’”
Bilotta has never asked friends or family to do business with him. They have come to Bilotta. When he left Merrill, he told clients he was changing firms but left it up to them to call if they wished to continue the relationship. Eighty-five percent of his clients accompanied him to PAX Partners, which stands for “Planning Around Xpectations.”
In thanks, Bilotta donated $100 to every client’s favorite charity. Since then, PAX Makes a Difference, as it is called, has contributed monthly to a client’s charity. Over 80 organizations have been touched so far.
Tom Walrond, a regional director for Raymond James & Associates, says Bilotta is known for his “generous spirit, herculean work ethic and unquestionable integrity.” Tash Elwyn, president of Raymond James & Associates, adds that Bilotta epitomizes the word “professional.”
“Simply put, Drew gets it. He cares about his clients, his community, and being the best he can possibly be for them. He holds himself to high standards and expects the same of those around him as well as his firm, thus requiring all of us to keep pace with him.”
To keep balance, Bilotta runs. He prays. And he listens to The Great Courses, university-level lessons on philosophy, theology, math and science. At the moment, Bilotta and his wife, Dierdre, both passionate philanthropists, are contemplating what cause is next for them.
“Everything we’ve ever been involved in just happened,” says Bilotta, who most recently has supported an orphanage in Honduras as well as Friends for Friends, a non-profit that donates funds to neighbors in need. “I wouldn’t even call it philanthropy. To use someone else’s words, it’s paying it forward. For me, it’s beyond financial. That’s wonderful but it’s easy too. I like grassroots because it requires all of you to be involved. I’m at a place in life now that’s all about discovery. I’m excited about what’s next.”
As a child, Shelly Church watched her divorced mother struggle to provide a comfortable home for her and her five sisters. She worked minimum wage jobs at places like Walmart and the local hardware store and, at one point, drove a school bus.
“She made it work. In spite of my mom not having a lot in life, she never complained or made us feel we were less than important. I never felt like I was without,” says Church, whose Naples, Fla.-based Church & Box Planning Group of Raymond James manages $285 million in assets for 120 households. “But seeing her struggle as a single mom for years probably motivated me more than anything. I wanted to figure out how not to end up like that.”
Today, Church, 59, heads a comprehensive investment and financial planning practice whose focus includes the conservation of family resources. One of her specialties is financial planning for divorced and widowed women. In 2011, Church published an e-book, Divorce: What Every Woman Should Know. Its successor, on widowhood, is due out soon.
After going through her own divorce in 1996, Church realized there was a void in the market when it came to financial advice. Her aim: to fill it.
“If it was difficult for someone like me, who knows finance, how difficult must it be for other people? Until I went through it myself, I didn’t really get it. I couldn’t believe how fearful I was about not being able to support my children. I had this tremendous fear I would lose clients and lose income,” she says. “It was an unjustified fear but it was real in that moment.”
Church subsequently contacted local family law attorneys, offering her services as a financial advisor who could help navigate the tricky terrain of divorce. Today, it’s a mature business. Roughly one-third of the group’s referrals come from divorce attorneys.
As part of the process, Church helps the attorney’s client formulate monthly budgetary needs. She assists in collecting documents for mandatory discovery and analyzes brokerage statements for any tax implications. She also attends mediation hearings—and she does it all for free.
“The key to the success of these referrals is I make it crystal clear to every client that I do not have a financial interest in the referral. There is no sharing of commissions. I get paid as a lawyer. Shelly gets paid as a financial advisor,” says attorney John E. Long, who has worked collaboratively with Church for over a decade. He is also her client. “By the time we get to mediation, the client has as much trust in her as they have in me. We are a team working in the client’s behalf. All my clients adore her. It’s only natural for clients to place their money with Shelly. I can’t remember any who haven’t.”
Church immersed herself early on in all things financial. Largely self-educated, she started her own firm, Diversified Financial Group, in 1984. The firm sold mutual funds and limited partnerships. A few years later, when she became a certified financial planner and fully licensed, Church broadened her reach to include comprehensive financial planning. She joined Raymond James & Associates in 1994.
Church connects deeply with clients—in part by sharing her own stories: her economic beginnings, her divorce, and the loss of her son Kyle, who died of heart disease in 2005 at the age of 18.
“I think when you’re real with people they trust you more. I lay everything out. What you see is what you get,” says Church, whose partner Ilona Box started out as her sales assistant 16 years ago. “We dive pretty deep into our clients’ personal lives. A lot will share stories with us even their kids don’t know. That’s where it really makes a difference. They are totally comfortable having those kinds of conversations.”
Just recently, a client learned he had brain cancer. First, he told his wife, then his two kids. He called Church next. “It’s like we’re family,” she says. “It becomes very personal.”
On Church’s desk is a plaque that says: “One of the deep secrets of life is that all that is really worth doing is what we do for others.”
For Church, these aren’t random words.
It’s how she lives her life.
She mentors women advisors new to the business. She’s a role model for client families. And she has long been involved with the American Heart Association, carrying on her son’s legacy by raising almost $700,000 for the organization.
“I don’t have many bad days. I’ve always been able to look out and realize that no matter how bad my life is, there’s always something worse out there. It’s what got me through life when I lost my son. There are others who have so many more problems than I do,” says Church. “One thing I know more than anything is that the more you give—I give—the more that comes back in so many ways. That’s the secret of my life.”
In 2008, Jeff Concepcion faced a tough choice. After being forced out by Lincoln Financial, his corporate home for 23 years, he could have taken a handsome severance package and waited for his non-compete to expire.
Or he could chase his dream and build his own advisory firm—a place where every advisor is an equity owner and the client comes first.
“I didn’t take a paycheck for three years and worked seven days a week,” says Concepcion, 48. “In the beginning, the business was losing $80,000 a month. I put up all the capital because I wasn’t willing to take other people’s money until I knew it was viable. There’s no debt because we’ve never borrowed. There’s no outside investment. And today, I can tell you, we are meaningfully profitable.”
Last year, FINRA awarded Concepcion $2 million in damages in connection with an arbitration case he had filed against his former employer. That victory, he says, provided some vindication. But nothing feels sweeter to him today than the wild success of Stratos Wealth Partners, his Solon, Ohio-based RIA, an affiliate of LPL Financial.
Five years out, Stratos Wealth Partners, with more than $6.1 billion in assets, has over 170 advisors in 58 offices in 19 states. The firm has added over 45 advisors this year and in just one month opened offices in Cedar Falls, Iowa; Scottsdale, Ariz.; Birmingham, Mich.; Gulfport, Miss.; and Lexington, Ky.
The design of Stratos Wealth Partners was never back-of-the napkin. For months after leaving Lincoln Financial, Concepcion and two assistants worked on the business plan in a 10-foot by 10-foot storage closet donated by a friend. They called it the Bat Cave.
“I thought the industry was out of balance. Fundamentally, wirehouses and the banks gave advisors too small a share of the revenue pie in exchange for the services they received back. Those are the lowest payouts in the industry,” says Concepcion. “At the other end, you have the independents who hang up their shingle and are getting all the revenue but no support or collaboration. What I wanted to create was something in-between.”
In the Bat Cave, Concepcion worked the numbers: What was the most he could pay advisors and still have enough left over to provide an unusual and meaningful support structure along with modest profits?
The result is a pair of business models—one a full-service option with a 63% payout for an advisor with $500,000 in gross revenue, as an example; the other a do-it-yourself offering with an 80% payout.
What has advisors most excited are all the bells and whistles: a transition team that makes multiple on-site visits; trading accounts that are visible on smart devices; an all-in-one investment solution that allocates equally between exchange-traded funds managed on a quant basis and mutual funds managed on a fundamental basis; and, not surprisingly, ownership equity.
“There’s no one I would give any form of control to—except Jeff. He’s trustworthy, he has the highest level of integrity and he always does what’s right by the clients,” says Bob Heksch, who joined the firm in early 2009 from AIG. Heksch is a co-advisor with Concepcion and manages $180 million in assets. He and Concepcion got their start in the business together in the late 1980s. “I know that he’s going to make the right growth decisions and that he’s focused on my partnership equity. It’s a great solution for someone who wants to go independent.”
Advisors who know him well call Concepcion “dynamic,” “supportive,” “charismatic” and “intensely loyal.” Here’s another adjective: energetic. On one recruiting trip recently, he spent Monday in Arizona, Tuesday in Utah and Wednesday in California, flying the red-eye home to Ohio that night. It’s not unusual for him to schedule eight meetings a day.
“I never aspired to be in 40 or 50 locations in all these places,” says Concepcion, who cuts traveling to a minimum during summers when his two kids are at home. “It’s basically been word-of-mouth growth as a result of advisors who are extremely happy here.”
What kind of advisor is Stratos Wealth Partners targeting? Two-thirds come from wirehouses or banks, the rest from the independent sector. On average, the advisors are pulling in $400,000 to $500,000 in gross revenue. They oversee all manner of practices but what they do have in common is that they operate compliantly and want to grow their businesses.
Not surprisingly, one of Stratos Wealth Partners’ biggest selling points is Concepcion himself. He’s heavily involved in not only recruiting but coaching—and it is routine for him to meet with his advisors’ top clients, prospects and centers of influence to help take those relationships to a higher level.
On Concepcion’s recent trip out west he looked at 20 “opportunities to affiliate,” as he puts it. Four, maybe five, passed muster.
“What we are looking for aren’t good partners but great partners. They’re using our name in the marketplace. We’d rather grow slowly with good people,” he says. “And assuming we deliver value and treat them well, the rest of the stuff takes care of itself.”
What do you get when you marry the services of a top 30 accounting firm with a private wealth management company? PWM Advisory Group, a joint venture—and adventure—that Managing Principal Jim Ferrare says adds new luster to the RIA space.
“I think this is one of the most unique partnerships in the industry. It should be a model for other RIAs to follow,” says Ferrare, 53, “I think for me it may be what I’m most proud of—to have an opportunity to build something that will help clients that did not exist before. It’s incredibly rewarding.”
PWM, short for private wealth management, was born out of a friendship. In the late 1990s, Ferrare was an investment advisor for Pinnacle Associates and Bill Hagaman was a partner at WithumSmith+Brown, an accounting firm. They had mutual clients and both had growing businesses in New Jersey. Fast forward 13 years: WS+B, now headed by Hagaman, is one of the largest accounting firms in the country without a wealth management division.
“In 2011, we finally said: ‘Let’s do something’,” says Ferrare, who oversees Pinnacle’s private client group and serves as co-portfolio manager on two of its investment offerings. “For years, we talked about it.”
PWM Advisory Group was rolled out last year to serve the accounting firm’s clients who suddenly need investment advice. The target market: new wealth in the $2 million to $20 million segment. Typically, clients are selling a business, have recently divorced or are the recipients of trusts, insurance proceeds or personal injury settlements.
“A big part of the business are clients in transition,” says Ferrare, who provides investment advice along with three partners. “We pretty much handle any situation. If someone is selling a business, I might jump into a meeting during that process, or prepare someone for what financial life will look like after a divorce. There’s a lot of fear around divorce. Part of our job is to take them through the fears they have and let them know that they’ll be fine, that they have sufficient funds.”
PWM Advisory Group has a conservative investment philosophy with an offering that includes high tax efficiencies and low fees. The firm gets paid 50 to 100 basis points on assets under management while sophisticated projects like legacy planning and business valuations are priced à la carte and handled by WS+B.
“It’s hard to imagine many RIAs with a staff of 400 people with various levels of expertise and competencies, ranging from expats to offshore trusts. That’s what this accounting firm brings to the table. You’re marrying the resources of one of the largest accounting firms in the country with an experienced advisor. And you only pay for what you need,” says Ferrare. “You have the best of both worlds.”
At the moment, PWM Advisory Group oversees $175 million for 40 households. Hagaman, CEO of WS+B, looks for that to grow to $1 billion to $2 billion in the next five years.
“There are a lot of CPA firms out there and everybody does this a little bit differently. The unique situation here is the longstanding relationship Jim and I have had,” says Hagaman, whose firm has 450 employees, including 77 accountants who are partners. “I know our clients are going to be in good hands—that the assets will be managed for wealth preservation and will be managed at a relatively efficient cost. It also increases the stickiness we have with our clients. There’s a synergy here. It becomes a win-win all the way around.”Coincidentally, Ferrare started his career as a CPA. After earning that designation’s required accounting experience at a firm that specializes in the securities industry, he was tapped by a hedge fund. While there, he developed a strong interest in investment management and became a chartered financial analyst. When the hedge fund’s largest client offered him the number two position in his family office, Ferrare took it.
“It was the late 90s, the stock market was going gangbusters and I was working for a family office,” says Ferrare. “I decided I’d like not to build something for the next generation of that family but build something I could control.” Ferrare joined Pinnacle Associates in 1999 where he is currently responsible for $600 million in assets under management.
In recent years, Ferrare has become involved in charitable works—sleeping one night on a New York City street to raise funds and awareness for homeless youth and encouraging his staff to donate at least 20 hours of volunteerism a year.
“More and more as I get older I realize how easy it is to help people,” he says. “It didn’t really hit me until the last few years. I was too wrapped up in my business. But it’s extremely important to me today.”
When he’s not working, Ferrare climbs mountains—that’s right, mountains. He has summited several peaks, ranging from Mount Washington in New Hampshire to Mount Kilimanjaro in Tanzania.
“There must be something in my DNA about the challenge. I love physical activity and I also love the mental challenge of growing a business and helping clients,” he says. “It’s all about going forward.”
Paul A. Pagnato
When HighTower decided it wanted to establish a presence in the Washington, D.C. region, the firm had only one name on its search list: Paul Pagnato.
“We knew Paul was the premier advisor by reputation in that area. Everything we were predisposed to believe was validated emphatically when we met him,” notes HighTower’s Michael Parker, national director for enterprise development. “This was the individual and team we wanted to plant our flag with.”
And no wonder. Pagnato, 49, heads a dynamic 17-person team that caters to a select group of 116 ultra-high-net-worth clients. Since joining HighTower from Merrill Lynch a little over two years ago, the Pagnato-Karp Group has doubled to just over $2 billion its assets under management. Some of those assets came from existing centers of influence that had been withholding major referrals—unleashing them with Pagnato’s move to the independent sector.
“Most people have a ‘why.’ My why I get up every day is to change the wealth management industry so that people can receive pure, objective, clean, transparent advice. Our clients and our centers of influence love us being independent,” says Pagnato, who has made repeat appearances on Barron’s listings of top advisors. “I’m on a mission. I’m empowered. I have my why. And it’s not just me; it’s the entire team. The energy level, the attitude, the intensity, the sense of purpose is at a whole other magnitude. It just feels so good.”
Pagnato was a scientist with McDonnell Douglas’s life science division when his neighbor, a sales manager for Merrill Lynch, recruited him. A graduate of Florida Atlantic University, Pagnato joined Merrill’s training program in 1992. While with the firm, he managed the Tysons Corner, Va. office and launched Merrill’s Washington, D.C. private banking and investment office.
At the start, with no network of wealthy investors to tap into, Pagnato experimented with cold calling, mailers, seminars. “If you had a $2,000 IRA and you needed help with that, I would help you,” he says. “A lot of times I never received compensation for the work I would do. When you do the right thing, you get rewarded tenfold.”
After three years, Pagnato began to receive referrals. Five years out, after deciding he wanted to focus exclusively on the affluent, he set a minimum of $1 million. Today, the minimum is $10 million in investable assets.
Pagnato says unapologetically that his team’s service model is unparalleled in the industry. It’s a bold claim, one he won’t retreat from. But then he doesn’t believe in gold standard service. He believes in “heroic” service.
As an example, a client late last year—at Pagnato’s urging—finally called upon one of the group’s concierges for help. Concierges, among other things, purchase second homes, aircraft, boats and jewelry for clients. They negotiate the purchases of roughly 50 cars a year. They will even collect mail, scan it and email it to clients who live in multiple locations.
In this case, the client wanted two bedrooms at the Four Seasons in Maui over New Year’s. He had tried to book a reservation himself but was told there was a 100-person wait list. The client, thanks to the concierge, welcomed in the new year at the luxury resort.
Every client who signs up with Pagnato undergoes a process called Family 360. A husband and wife, for example, meet with the group’s attorney and family coach to focus on what’s most important to them. The result: a family mission and values statement. Later, children—from grown adults to kids as young as eight or nine—are included in age-appropriate educational meetings.
“Philosophically, we are big believers in educating and informing children sooner as opposed to later,” says Pagnato. “The sooner you bring them into the fold, the better your odds of the wealth being maintained.”
One undeniable signature of the Pagnato-Karp Group is innovation.
As Pagnato puts it: “We are extremely forward-thinking. We embrace technology. We’re always cutting edge on every aspect of what we do. We want to continually improve the value we provide our clients.”
Many of Pagnato’s clients are former military or worked in the intelligence community. Recently, the need arose for both personal and cyber security. In one instance, a client was worried about a child’s travel in Latin America. In the other, a client’s computer had been hacked. Early next year, the group will roll out a security service designed by a former Delta Force operative.
On the investment side, with interest rates at historic lows, clients have expressed the need for enhanced cash flow. Pagnato’s fix? Private real estate investments, agricultural financing, bridge loans and senior mezzanine financing—boutique investment opportunities he had been unable to secure while attached to Merrill Lynch.
Going forward, Pagnato hopes to add four to eight large clients each year. It is quality he is seeking, not quantity.
“My job is to ensure our culture is maintained. My job every day is to continually look for new talent for our team. It’s the culture and people that make everything happen,” says Pagnato. “Now, more than ever, I feel like I’m able to make an impact on the industry. That gives me energy. I very much have a greater sense of purpose today. I have my why.”