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Retirement Planning > Retirement Investing

New Year's Resolutions

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Well, it’s that time again: out with the old year, in with the new.

Not so fast! Before we send ’06 to the been-there, done-that archive, let’s see whether four veteran financial advisors met the 2006 goals they set for themselves, which Research published a year ago.

Did they grow their businesses as intended? Did they deepen client relationships as planned? Did they induce junior partners to contribute more? What about expanding their transition to fee-based accounts?

We spoke with the two wirehouse group heads and two independents to check up — and also to check out targets for the fresh year ahead.



Managing Director of Investments

Carchia Financial Management Group

Wachovia Securities, Short Hills, N.J.;

AUM: $275 million year-to-date

Richard Carchia kicked off 2006 determined to score more frequent face-time with clients. Indeed, with monthly phone calls to set in-person account reviews, he succeeded.

It wasn’t easy: The advisor’s clients see little need for such get-togethers. How did he change their minds? Carchia told them: “‘Financial security should be at the top of your list of concerns. We want to make sure everything is being attended to.’ That,” he says, “gets their interest.”

Last year, the FA targeted 15 percent growth by raising some $30 million in new assets. Turned out he boosted revenue 20 percent, on a 12-month basis, and increased assets about $25 million. “We’re constantly out there marketing to generate more personal contact,” notes Carchia, 57. Approaches include wine tasting and car shows, the latter letting clients scope out $100,000 Ferraris and Porsches.

The advisor’s annual art show — a charity fundraiser with a local artists’ exhibition, food and entertainment — has also proven to be “a great way to develop client relationships,” he says.

Internally, Carchia has heightened his junior partners’ technical expertise, with one advisor poised — at the close of ’06 — to take the CFP exam. And by changing compensation to a profit-sharing system, he’s encouraged the partners to generate new business.

This year, he’ll be fine-tuning the profit-sharing formula to rev up motivation. “The biggest challenge is getting people to challenge themselves. That’s one area that’s come up a little short.” Along these lines, Carchia plans to introduce some new projects — such as conducting two educational seminars monthly — for the partners.

Investment-wise, he expects good performance from large-cap value companies. “For the next six to 12 months, the market will be focusing on large-cap. We’ve made some additional commitments there; large-cap value has always been the cornerstone of our portfolios.” However, his bet on Japan last year turned out to be “a disappointment.”

As for strengthening the client bond, Carchia notes: “We constantly try to improve on the process to make sure clients come in more regularly.” The payoff? “More disclosures than you get on the phone — not only about their finances but their desires and what’s going on in their lives.”



Principal, Donald M. Graham & Associates, Willard, Ohio;

Affiliated with Commonwealth Financial Network;

AUM: about $240 million (including advisors under his O.S.J.)

Donald Graham has a robust appetite for work. And though it might seem even too healthy, he has never, to date, bitten off more than he could chew. The FA’s prime goal for ’06 was to be known as the retirement expert in his area of Ohio. By all indications, he is — and then some.

“We have people from all four corners of the state recognizing our expertise,” notes Graham, 59.

In 2006, he was to conduct 12 retirement-education seminars in three months in his brand-new high-tech facility. Also on his agenda was to hold 18 three-hour presentations to retired teachers for The State of Ohio’s Teachers Retirement System.

Not only did the independent fulfill those commitments but last August began an additional dozen speaking sessions, this time for pre-retired teachers. As if that weren’t a heaping plateful, in ’07 Graham is set to open a branch in Columbus, Ohio, geared to pre-retirees. The new office, close to state school systems’ headquarters and universities, is to serve members of public retirement systems. It will be staffed with two advisors; and, initially, Graham plans to spend considerable time there, too.

“I didn’t approach the pre-retirement seminars with the idea of [prospecting]. But afterward, people often called: ‘We liked what you had to say and want to do business with your firm,” he notes. “Pre-retirees are up against [big] retirement decisions: They have issues about roll-overs and so on.”

Graham, who has one other producer working with him in Willard, books five in-person client meetings daily. “I’m feeling a little wrung out,” he admits. “But I’m very satisfied with the way the business is going. It’s giving us a nice warm feeling.” Last year, the advisor met goals of adding about $50 million in new assets under management and increasing revenue 15 percent.

Graham has had impressive success with his seminar facility. He puts it to work for client education programs and clients’ personal special events, as well as for wholesaler presentations to staff and the two advisors who are under his Office of Supervisory Jurisdiction.

The independent’s newest twist is charging local companies to use the space for off-site training. “We want to get the managers used to coming here. When they see how professional our operation is,” he says, “they’ll certainly think of us when they want to invest more money.”

This year, Graham wants to boost assets by as much as 30 percent to 35 percent. He’d also like to convert more clients from commission- to fee-based. “We’ve identified about $60 million in existing assets to convert. Last year we didn’t do as well as I would have liked… We probably converted only half the $30 million we wanted to.”

Graham’s chief objective is to pull off a tricky balancing act: “I need to make sure I can integrate the new office without giving less to my other reps and what else is happening,” he says.

For the time being, at least, he’s shelved competing in pro drag races — a hobby since high school. “I have so many exciting things happening in business that it’s ‘out-of-sight, out-of-mind.’ The new office has my juices flowing. I want to do a good job managing,” he says; “I just have to get my arms around all that.”



Principal, JanHobbs Financial Group, Orange, Calif.;

Affiliated with LPL Financial Services;

AUM: about $130 million

It’s not as frisky as “The Price Is Right” (“Come on down!”) TV game show. But Jan Hobbs’ “Secret Shopper” gambit is for this advisor just as exhilarating and, ultimately, more rewarding.

The project is a facet of Hobbs’ ongoing goal to serve clients with a net worth of $1 million exclusively. Last year in a marketing test, a client couple volunteered to phone her office posing as prospects, and then rate the treatment they received.

“Without offending them, we’re trying to find out if [a prospect] is a possible candidate. To see if they fit our criteria, we need them to disclose a lot of personal information. If they don’t, we [still] want them to go away feeling really glad they called,” explains Hobbs, 49.

So far, feedback from the impostors has been largely favorable. One area in need of polishing: the firm’s opening chat before Hobbs takes the call. “My partner should tell them that she’s both a CFP and a partner so people respect her probing — as opposed to thinking she’s just a gatekeeper.”

In 2006, the advisor vowed to whittle her book from 220 clients to fewer than 200. By November, she was down to 207. “One client wanted to put half her money in CDs,” she recalls. “I told her, ‘If you want to do that, fine — but you should take the other half with you’.”

In toto, it was a fine year: Assets rose about 15 percent, in line with Hobbs’ target and reaching an all-time peak.

One hindrance was several clients’ interest in CDs. “It was surprising that [because of] the eight-month flat stock market, people lost interest and were attracted to 5 percent CDs. We’re quite sure,” says Hobbs, “that with inflation and taxes, over time CDs have an almost zero rate of return.”

Her theme for this year is “The Client Experience.” Hobbs’ aim: “to make sure we provide more value, and have clients feel more comfortable about sharing information and recognize the value of a closer relationship.”

The advisor would also like every client to sign an Authorization to Share Information. That allows Hobbs and CPAs to exchange input and tax facts — a helpful service included in her asset-management fee.

Uppermost for ’07, though, is aligning client expectations with the bear market Hobbs foresees. “The biggest determinant of our growth, or lack of it, this year,” she says, “will be market performance.”

As for that looming correction, she’ll urge clients to “sit back and relax” and “not even think about trying to sidestep it. ‘It’ll be a bumpy ride,’” she’ll tell them. “‘So just buckle up, and you’ll come out of it OK.’”



Wealth management advisor, Merrill Lynch;

senior partner, The Sullivan Group, Garden City, N.Y.;

AUM: $1.5 billion-plus

“We’ve had an exceptional year. I’m happy with the way everything is going,” says Thomas Sullivan, heading a 7-person team, whose top 15 accounts is each more than $15 million in size.

One achievement that excites him: His two junior partners have become more adept at working with prospects, a 2006 goal. “The more they do it,” says Sullivan, 56, “the better they get. If someone is in another state, I think nothing of sending these guys [traveling]. Doing it by phone, it’s never going to happen. You have to sit down with someone to really get an understanding of what people are trying to accomplish.”

In fact, Sullivan’s addition of 10 to 15 new clients — another goal for last year — is partly attributable to the above. The team’s net new households total 11, with assets amounting to about $150 million. The latter represents a 10 percent gain over last year.

But Sullivan’s business grew only about 8 percent. “I’m not really concerned with the amount of business we do,” says the FA. “I’m concerned with the health of the business: We’re not losing accounts, the money is growing, performance is good, clients are happy. All that adds up to a healthy book.”

Meeting with clients to discuss major issues has hiked their respect for the Group. “We remind them about funding credit shelter trusts, wills, gifting. We check with them about [changes in] beneficiaries. We ask questions that make clients [realize], ‘Hey, this is why I deal with these people,’” notes the advisor.

The start of ’07 finds Sullivan hoping to transition more clients to his two partners. “You never want to lose a $25 million account because you’re spending too much time with a half-a-million-dollar one,” he says.

The group head’s biggest hurdle-to-be this year? A difficult market. He aims to pick up 10 to 12 new households. But when the Dow Jones reached 12,000, “people [got] excited about the stock market. That set off an [alarm]. Merrill’s research [told] us [last fall] to be a little cautious and prune back. Of course, that can change in a month or two. [But] we’ve lightened up on equities.” So if the market were to rise 15 percent, “we’re not positioned to do that. But if I’m right and we don’t get the growth that many are expecting, we’re positioned pretty well.”

Sullivan’s key ’07 resolution is “to keep doing what we’re doing. [For instance], we’ll continue to touch base with clients every five to six weeks. If an advisor doesn’t [contact] clients for nine months or so, they sense the neglect.”


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