Retirement advice that's on target

SMA: Is it a customer-first attitude that sets you apart?
JK: That’s all it is. If I look at all the other advisors, the products they sell are the same products I sell. The variable annuity or the equity-index annuity is the same one that I sell. Where I am very confident is I can beat them in service and caring. I have a lady whose title is relationship manager. All she does is build relationships. She sets everything up: “Mr. Kailunas is coming in at this time. Here’s the packet of information. Here’s the forward to the book he wrote.” And this and that. She sets it up so I have instant credibility when I walk in the room. No. 1 because it is a referral, and No. 2 because of how my staff has taken care of them. So we get over a lot of those sales barriers and obstacles. We take care of them.

SMA: Is that the key to the referral-only business?
JK: Yes. It’s customer service. We do goofy events. We were traveling in Thailand and I got some custom suits made. [The tailor] was coming to the United States, so I paid for his airfare here and we had a wine-and-cheese event where we had the custom tailor in and he measured clients for clothes. They had to pay for it, obviously, but they got clothes for 50 cents on the dollar.

We do events like that. We do a pig roast. We do a rooftop at the Chicago Cubs. We rent a rooftop outside Wrigley Field. We had 110 people that came to the rooftop last year. We pour a good drink and make sure everyone is having a good time, and they know that we care about them. So, it’s inevitable that when they say, “What are you doing this weekend?” And [my clients] say, “I’m going to go see the Cubs.” “How did you do that?” “Well, my broker.” “Your broker?” That leads to a conversation that we generate business from every single time. It’s seriously taking care of the customer. I think if our industry did more of that, we’d have a lot less of the bad press we get.

SMA: Are you able to work your interests into your business?
JK: That’s exactly what I do. Last week I went to a pheasant range. I have a broker who raises dogs. We took out eight people pheasant hunting. We basically walked the fields in the day, went bird hunting, and had a chef come in and make a gourmet lunch. In the afternoon, we went out hunting again. I got a referral, from a business owner I do a lot of charity work with. He called me up and said, “I’ve got a buddy who is in tool-and-die. We do a lot of joint work together.” He said, “Would you sit down and take a look at his business for him and his books?” He faxed over the account statements and it’s $400,000 or some odd dollars that he’s got sitting there and doesn’t know what to do with. He doesn’t have a relationship with his broker. I’ll sit down with this guy and go through and give him that concierge-type service. There is a tremendous marketplace for people who have $100,000 to $400,000 of assets to invest. You don’t see anybody talking about that.

I have a friend who has a boat out on Lake St. Claire, which is a phenomenal lake for walleye fishing. So I took two trips out there walleye fishing, and lo and behold, they were all referrals and we’ve written business. So it’s sort of fun. With this cottage, I’m going to take people fly-fishing, so I get to cheat a little bit I think. It’s worked out real well. People see that you are sincere and honest. Because if you go on a hunting trip or you go on a fishing trip and you spend time with somebody, one of two things is going to happen. Either he is going to like you or he is going to think you are a jackass. You cut through a lot of it.

SMA: Something else you do outside of work is take part in Hunt for a Cure. What is that and how did you get involved?
JK: The gentleman’s name is Pete Odland. His little boy Dylan has cystic fibrosis. Pete is a self-made man. He came from very sparse beginnings. He has built a nice tool-and-die shop here in Michigan. He’s an avid outdoorsman. He found out his son has cystic fibrosis. He thought, “What can I do? How can I go after this thing?” So he decided he was going to start this Hunt for a Cure. It’s a 501(c)(3) organization that raises money for research for cystic fibrosis. The main event each year is the camouflage ball. You dress in camouflage. The women dress in camouflage gowns. We raised $92,000 last year in one evening with silent auctions, live auctions, the tickets, the sponsorships. Ted Nugent has been very gracious to give to the charity. I am the vice chairman. We will have wild-game dinners at our country club. All the proceeds will go to Hunt for a Cure. What we’re trying to do is raise money because it feels like there is a clock on every kid, and we want to keep that clock running instead of it being stopped. It’s a race against time.

SMA: Advisors get a lot out of their communities. How important is it to get involved and get a little back?
JK: I think they have to. It’s imperative. If you look at any of the people profiled, if you look at any successful producer out there, it’s difficult to find someone who isn’t involved passionately with a cause. If the intent of doing something charitable is to get business, it won’t happen. If you have a passion to help somebody or do something, people will see that and note your sincerity and note your integrity.

SMA: What was your transition like going from a captive agent to having your own business?
JK: It was a nightmare. If I didn’t have my partners, Brian Yarch and Larry Taunt, it might not have happened. We all leaned on each other through a very difficult transition. There’s a clich?(C) going around in sports, “It is what it is” or “You know what you know.” You are hearing athletes saying that now. It’s amazing, when you are in a captive situation, all you know is what you’ve been told. When you get out there in the real world, it’s absolutely amazing. The more you educate yourself, the more ignorant you realize you are. Every day, I’m learning something new and I’m learning how my practice is going to evolve. I thought at one time, when Larry and I had a million dollar growth, that it was more than we’d ever be able to handle. I’m envisioning a $20 million to $25 million dollar gross in the next 10 years. It’s matching the client’s concerns and issues with products and then servicing the power out of them.

SMA: Which gets back to the customer service.
JK: Yes. To be honest, I’m not that great at it. I’m great at a point of sale. There are people that are much greater at customer service than I am, so I hire them. Jennifer Berry, who works for me, used to run the dining room at our country club. It’s a high-end country club. She knows how to deal with people, all types of people, because of the country club. Lo and behold, we brought her over here and she handles all of that stuff for us and communicates with the clients so we can get through the issues that we need. I’m not worried about beneficiary changes and things like that. I’m sitting down worrying about bigger issues. It’s much more time efficient, and much more profitable.

SMA: Why do you like working with seniors so much?
JK: I prefer to work with seniors for several reasons. They’ve had so many life experiences to draw from. It’s easier for me to communicate. I’m only 41, but it is easier for me to communicate with them. Maybe it’s the closeness with my grandparents or my parents. To me, they are easier to relate to because they know what their issues are. A senior has several issues. No. 1, they might outlive their money. No. 2, you’ve got health care issues. They are simple issues to address and take care of. They are willing to look at those. They understand mortality and morbidity, whereas a younger client doesn’t. They also understand risk and reward a lot better. If it is articulated properly, it’s an even match to do business with them.

SMA: Are there any products that are working better for the seniors that they like a lot?
JK: We are starting to see a lot of our seniors go to managed money.

SMA: Really?
JK: It’s probably because it is a focus of where we want to be as a firm. We see with a lot of the managed money that it’s a trust issue. It’s what Will Rogers said: “I’m not concerned with the rate of return on my money, I’m concerned with the return of my money.” That’s very true with seniors. If you explain to them the process, we’re seeing a lot of them in managed money; they like that. They want to know they are paying consultants to help them and that we’ll be there so that if they call we’ll give them service. People aren’t afraid to pay money as long as they get perceived value from it. They’ve been around long enough that they have seen salesmen sell them things and never call them again. I love those people that have had those experiences. They don’t get that from us.

SMA: What are your thoughts on how the senior market will change as boomers age and become seniors?
JK: I think it is going to be a windfall. And I don’t say that arrogantly, I just say that very confidently that we’ve put, with the attorney, with the legal people we have, the accounting people, we’re seeing a lot of this one-stop shopping. We’re seeing people like that. If they have a problem, there are people with professionalism and intelligence that will handle the issues. You’ll never hear around here the excuse that it wasn’t my job. It’s everyone’s job to make the client happy. I think the baby boomers are going to be a huge windfall for this firm. With the amount of money that is transferring to this generation, there is going to be a lot of new issues that the economy has never faced, a lot of new issues that advisors aren’t ready to really dig their teeth into. I think it is going to be a great opportunity for Regal Financial Group.