Twenty-five years of Shotokan karate training has given Tom Hine an understanding that strength is best harvested through humility, that discipline is more than just patience, and that integrity encompasses a person's entire spirit. He believes it's also what has allowed him to double his assets under management in three years.
"Kaizen" is a Japanese concept that has been passed down to Hine by his karate masters. It calls for constant self-improvement through the elimination of waste–more specifically, the elimination of activities the add cost but do not add value.
It's probable that many successful financial advisors are unknowingly practicing this ideal every day. Hine, a planner from Glastonbury, Connecticut, however, has brought the concept to the forefront of his financial planning philosophy and built a practice around its ideals.
"You need a team approach to your business with the discipline to work harder and do better, every day," says Hine of the lessons he's learned. "You need the integrity to do the right thing. You have to know your clients and the economy, and you need to be dedicated to improving yourself. With the idea of kaizen you're always looking to improve. It's a yearning to make life better for your clients. You want them to sit back and say, 'Wow, I'm so glad I picked the right firm.' This is a concept that I've trusted my entire net worth with. Part of it is a drive to make myself and my team better and the other part is to let our clients know that we're constantly improving and are doing everything possible for them."
Hine made his first financial sale via a cold call in January 1990 while working for a large insurance company, and shortly thereafter had built a base of clients. In 1995, he made the move to independence and formed a partnership with two other people. Five years later the firm had accumulated a book of business worth around $200 million but there was dissent among the partners on how the practice should be run.
By August 2001, amidst disagreements with his partners, Hine decided it was time for the group to part ways and for him to fly solo with his own practice–Capital Wealth Management.
In many ways, Hine says, he was ready for the change–the market was right and he was ready to put his own business philosophy into practice. Like many other advisors in similar situations, he took the leap of faith toward independence with just one other employee, but soon realized that the gap was much wider than he expected.
Hine felt he was off to a good start and had close to $60 million in assets when the unimaginable happened–the 9/11 attacks. "Talk about a first month in business and a baptism by fire," he recalls. "Shortly after 9/11 I rebalanced clients' portfolios, those who gave me discretion–to be more defensive. So right from the start, I was showing clients that the firm was proactive–not market timers–but active, [as in] 'We're not going to sit there and watch your portfolio go down when something big like this happens.' It was a rough time to go through [opening a firm], but in part, being able to manage my clients' money effectively during that time is what solidified why they chose my firm. They had to make a pretty big decision about who was going to manage their money after 9/11."
Everyone dealt with the tragedy in their own way, but Hine says the hardest part for him personally in the days after 9/11 was the conflict of emotions he experienced.
"On one hand, I'm supposed to feel bad for the national environment," Hine says. "On the other, I'm worried about getting my firm up and running. So I felt almost selfish because I had to block out the tragedy from my mind for several days because I thought, 'no matter how serious 9/11 is, if I don't get this firm up and running, I could lose what I'm been working 15 years for.' It was a very tough time for me."
A defensive stance
Hine cites the perseverance and mental discipline he learned from his martial arts training for getting him through those difficult weeks in the fall of 2001. While many other planners were liquidating their clients' position in the market, thereby unsheathing an array of tax issues, Hine remained steadfast in his approach and kept clients invested with defensive positions. When the economic climate began to turn for the better in the following months, Hine says, his clients were glad he kept them in the market in a position to take advantage of the turnaround.
"I got a lot of referrals the next year because of what I had done in 2001," he said. "How many businesses fail in their first year? Now you want to add 9/11 on that? I wonder what the odds were at that point."