Don DeWaay has a vision that he’s certain will bring swarms of visitors to a field in West Des Moines, Iowa. Unlike Kevin Costner’s character in “Field of Dreams,” DeWaay doesn’t admit to hearing voices, he isn’t building a ballfield, and the visitors he’s expecting aren’t the 1919 Chicago White Sox. What the 46-year-old Iowa native envisions instead is a financial services office park that will provide his clients with comprehensive one-stop shopping for all their financial needs.
He likes to call it the Mayo Clinic of Money. While that indeed sounds ambitious, so does everything else he’s done so far. DeWaay has more than 1,000 clients and $500 million under management, but until a year ago was the sole advisor in his firm. With the addition of three more advisors he expects to add between $175 and $200 million of new business this year. “And we’re just hitting stride,” he says with his typical energetic enthusiasm.
DeWaay says that from childhood he had an entrepreneurial bent and was interested in making money, although pursuing an undergraduate degree in history isn’t often considered the first step on the road toward fame and fortune. After college, like many other advisors, he went to work for a large financial services firm, in his case American Express, that was primarily interested in selling its products and services. He says he got some good training and met a lot of people, “but ultimately I knew that you can’t really do what’s right for the client in a captive company.” That led him, in 1987, to start his own firm, DeWaay Capital Management.
One of the reasons DeWaay feels he was able to operate as a sole practitioner for so long is that he’s identified a specific client base and geared all of his efforts toward best serving them. “We’ve found a very comfortable niche in this business,” he says. “There are a lot of advisors out there who chase the people who are worth north of $50 million. We have clients like that, but our niche, truly, is that single-digit, low double-digit millionaire. We bring to them a level of coordination and a level of sophistication that they are not going to get anywhere else, in particular, here in the Midwest.”
What DeWaay tries to provide for his client base of retired executives, professionals, and business owners is a coordinated approach to their financial lives that includes a stable of professionals from other fields such as attorneys specializing in estate planning or asset protection, or CPAs, who are available as needed. “The common themes among our clients are that they have complicated lives financially and they haven’t received the kind of service that they would expect, or hope to get, from other providers. They like the coordinated approach. They’re basically affluent people that want their lives to be simple. They want somebody to take care of them.”
Education is the foundation of DeWaay’s approach as evidenced in his weekly radio show, “The Profit Zone,” which ClearChannel carries on stations in about 40 states, in educational sessions for clients and the public, as well as in regular one-on-one meetings and conference calls with current clients.
“We go to exhaustive lengths to make sure they understand why we do the things that we do,” says DeWaay of new clients, most of who come by way of referral from satisfied existing clients. “We want to make sure they’re on board with us from soup to nuts. We don’t want anyone to come in and be confused about what we do and why we do it. We want to build really strong, long-term, and hopefully multigenerational relationships.”
First the clients educate DeWaay about who they are, what’s important to them, and what they hope to achieve. Then DeWaay educates the client about what his firm can provide to help them realize their goals. “When it’s necessary, and it often is, we bring in some of our strategic partners–attorneys and CPAs. We’re trying to bring recognized experts to the table so there’s total coordination across the spectrum of the client’s financial concerns.”
Although DeWaay has 40 support people on staff, many of whom interface with clients at various stages of the relationship, at some point the firm founder still meets with every client. “I’m probably going to sit down with a new client from four to eight times in that first year,” he says. “People often ask, ‘How do you manage 1,000 clients like that?’ The way it works is that after a year or so, they have fully embraced why we do things philosophically and what we’re doing and they know we’re not going to do anything that’s going to compromise them. Every decision that I make reflects back, not on a brokerage firm, but on Don DeWaay, because it’s DeWaay Capital Management. So the frequency of the face-to-face meetings starts to decline rather rapidly. These people will still come in and if there’s a need to sit down with me face to face they will. They’ll still see me typically once or twice a year, more for some people. They’ll also see me at all sorts of events. They also get acclimated to the idea that these other staff people are very intelligent people with a great deal of experience. They have a lot of comfort that these people are getting their marching orders from me. And they understand the philosophy, so they don’t have to sit down in front me all the time.”
In addition to seminars and regular conference calls, DeWaay Capital Management sends out regular communications, such as “Spare Change from the Profit Zone,” which DeWaay describes as “stuff that comes out of the day-to-day practice. It’s short, powerful points that they need to contemplate and that often bounces them back either to the radio broadcast or to the Knowledge Zone [at www.theprofitzone.net] so that they can get more information.”
Those are the among the standard practices that can make clients feel secure, but DeWaay wants to make sure that they all feel special as well. “We sit down every quarter and for days on end we go through every client file and every client statement. You can imagine what it takes to go through 1,000 client files,” he says, “but it’s probably the best thing that we do.”
A review team is put together, consisting of everyone in the firm who has client contact. As each client’s file is reviewed, the individual team members can share what they know about the client’s current personal and financial situation. “Then we send out a personalized note, a portion of which is hand-written, believe it or not, to each one of those clients saying, ‘We need to get together because?? 1/2 ‘”
DeWaay concedes that such personalization can be labor intensive but insists it’s worth the effort.
An Investment Double Play