Statistics say most small businesses fail, and John Kailunas II’s first foray into the entrepreneurial ranks fell short of his expectations, turning him into a statistic. He wasn’t the restauranteur he wanted to be, and his father served him up a nice warm bowl of now-you-have-to-get-a-real-job soup. So he decided the insurance industry was the place to get that real job.
After spending time as a captive agent, he joined forces with two other producers and rejoined the ranks of the entrepreneur, starting Regal Financial Group in Kentwood, Mich., serving up financial advice from a menu that includes annuities, insurance, securities, managed money accounts and more.
Nightmare is the word Kailunas used to describe the transition from captive to independent, but six years later he and his business are running smoothly. Kailunas and his partner – the man who hired him at Sun Life of Canada – are two-time finalists for Ernst & Young’s Entrepreneur of the Year award.
“We feel like Susan Lucci. We missed it both times, but we’re coming back this year strong.”
He acknowledged he has about 18 years to go before joining Lucci in the highest echelon of award-winning futility, but he says he’ll be patient. And patience must be a virtue, because Kailunas’ second business attempt is succeeding. Regal Financial has been nominated more than once as one of the 101 best places to work in the state of Michigan for new company startups. Quite possibly, he has found his niche.
Senior Market Advisor: How did you get started in the industry?
John Kailunas II: After college, I purchased a restaurant and didn’t fare too well in the restaurant business and had to get a real job, as my dad put it. So I got into the property and casualty business arena and I sold a lot of life insurance at that time and decided that what they were paying me, commission wise, wasn’t as good as what I could get from a traditional life insurance carrier. So, I joined Sun Life of Canada. My sales manager was Larry Taunt. He is now my business partner.
He hired me and I worked my way up into sales manager and into an executive position. We left and went to John Hancock. We were second-line managers with Sun Life of Canada. We went to be general agents at John Hancock and started a distribution channel and some other great things and decided that it was time to go independent in the year 2000, and we took off and ran with it. We have about $700 million under management.
SMA: What keeps you occupied outside of work?
JK: I have a daughter, Courtney, and I have a little boy, Jonathan Anthony III. We nicknamed him Tres, for the three, and he’s a little tiger. Those are my kids. I’m very traditional. I’m very fortunate that my wife stays home, and she helps with the business. I’m a big-game hunter. I’ve been to Africa. I just came back from out west antelope hunting. I’ve been bear hunting. I’ve been pretty much all around. I am making my way out to Argentina this year. We’re going to go hunting for black buck in Argentina, my wife and I.
So we’re very fond of the outdoors. I just bought a cottage up north that is on the Pere Marquette River, which is one of the top 25 catch-and-release, fly-fish-only rivers in the United States.
SMA: Tell me more about Regal Financial.
JK: We started this at the worst possible time, January 2000. Let me go back a little bit. When the banks were allowed in the financial services industry, obviously the financial services industry fought that tooth and nail. We saw that they were going to lose eventually, so we lined ourselves up with savings and loan associations. Basically, we were an endorsed carrier for them. So when they were allowed Social Security and fixed annuities and all that good stuff in the bank, we were one of the venues. We trained people and had a consulting business that did all of that. Plus, we received overrides on that. That sort of grew into us handling the securities for many different banks. John Hancock thought that was such a great idea that they wanted to come in and sort of run the show and say goodbye to us.
So we went out on our own, me and Larry Taunt, he’s a CLU, ChFC, CFP. Larry and I started a one-room office. We had a young broker that came over with us. His name was Brian Yarch, and Brian is now an equity partner in Regal of 4 percent. Larry and I own 48 percent. We wanted a group that is integrity based and hard working and we founded Regal, and I think our revenue the first year was something like $500,000 in 2000. This year, we’ll finish at $6.7 million in revenue between the securities and the fixed insurance venue. So, we’ve had phenomenal growth.
SMA: What is your business model?
JK: It’s referral only. I only work referrals. We do a multitude of planning. I’ve got an attorney, actually two attorneys downstairs who work for us and two CPAs. Our clients come in and bring everything from a disagreement regarding a cemetery plot to reserving their farmland to ESOP plans from Ford Motor Co. So we sit down and do a fact-finder with them and find out exactly what their goals and objectives are and put them in front of the right professional.
There are people in my office who I trained six or seven years ago in long term care insurance – and to be quite honest, they are a lot better than I am now. So I sit down and I explain the process to my clients and then I bring in one of these gentlemen who is quite talented. We don’t have any closing talks or anything. Being independent, we don’t have any proprietary products or any initiatives or anything. We’re just helping our clients and it is amazing how our business has flourished with that attitude.
SMA: How do you put prospects and clients at ease in your office?
JK: In our office, we have theme rooms. There is a sports memorabilia room and the other one is a memories room. It’s collected stuff like you see at Friday’s restaurants and our clients love it. We have a big fireplace and they come by and it’s truly a boutique. We bought our own building and did it the way we want. There’s 10,000 square feet here that is dedicated to customer service.