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.”