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Practice Management > Building Your Business

A New Leaf

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When it comes to advisors who have high Q ratings, Deena Katz is a winner. Through her business and personal partnership with Harold Evensky at the planning firm Evensky & Katz in Coral Gables, Florida, her high visibility at association gatherings, her books and magazine articles and speeches and consulting work, just about everyone knows Deena (the fact that she’s known by one name, like many Indonesians, Cher, and not coincidentally, her husband, seems sufficient confirmation of her standing). With such ubiquity, why is it that she’s still a pleasure to talk to and that what she says always sounds so fresh? It’s the long knowledge, the many contacts, and the sharp intellect, topped off by what many teachers discovered long ago: hanging out with students keeps you young. That’s why Deena Katz is on the Investment Advisor Leaders’ Council, and why editor Jamie Green spoke with her by telephone from her office on the Texas Tech campus in Lubbock in mid-January.

What are you doing these days?

I’m spending a lot more time here in Lubbock [at Texas Tech University] which has been really hard on my husband. I had already moved to the kiss and bless phase of my practice. I have a lot of really great staff people who took over a lot of relationships and I just came in and kissed and blessed the clients and did the small talk with them. At a certain point we let clients know that the practice can happen without me and I need to go and do this. Most of them know where I am and are pretty excited about that since a lot of them are baby boomers like me. My idea is that baby boomers are going to find a new phase of life in some kind of related field to the one they are in, and a lot of my clients are doing the same thing, so they understand it. It’s been a big change from my health problems. I had breast cancer and it gave me an opportunity to say, wait a minute, is this really what I want to do? I sat back and I said, I love this industry and it’s been the most exciting 27 years of my life. I met my husband through this industry; I got my practice, and all of my friends today. And I said, it’s important for me to work in this industry. Maybe not in the same way I’ve been working, but using my years of experience and ideas and intelligence in a place where I can make a difference. So I called up my buddies at Texas Tech who I’ve known forever (see sidebar). That’s why I’m here. I love teaching and part of what I’m doing is building a big financial wing that will have a clinic and lab and lots of people involved to help educate the next generation.

Are you actually teaching classes?

I’m an associate professor, and I’m on the tenure track. I teach a professional practice class, which is an undergraduate class, getting students prepared for internships. I teach practice management, business plans, marketing. I run the internship program, which means I put out about 60 students every summer to work in financial planning firms. Starting next year we will be doing year-round financial planning internships, and we’ll have some online courses by then.

There are 300 students in our program, 28 of them are Ph.Ds–we are the only Ph.D program in the country. We have 60 master’s students, the rest are undergrads.

Are the students different than you were starting out?

The students here expect to have some place to have a mentor or an apprenticeship or to be an employee. We didn’t have any formalized education when we started, and most of us came from some kind of a sales situation. These kids are getting an education in areas that we never had. I teach intro classes both at the graduate level and undergraduate level where we cover concepts that most of us 30 years ago would have said, “What do you mean by that?” So they don’t have the same orientation, and that’s some of what we can correct here. It’s not about being an employee; its about taking responsibility for other people’s lives.

What is it that you think these students want to do with their degrees?

These kids are really idealistic– “We’re going to change lives, we going to educate people.” They tell you these stories about families who weren’t able to make it because they didn’t know what to do with their finances, and all sorts of great stuff. So we need to reorient them–it’s still a business, that’s what makes financial planning so different. We need to know investment concepts, we need to know retirement plans and all those kinds of things. We also need to know how to communicate with people and get them to talk to us, to discuss things that are more personal. This program has a lot of both of that. It’s the touchy feely and the hardcore knowledge.

How did you get into the business?

I was working for a real estate management firm and investment shop and we were managing residential properties all over Chicago, and we converted a lot of them to condos, and when that stopped making economic sense, I guess it was in the late ’70s, I went looking for something to do, I was just doing property management, and I had a private investment club. Our company started a private investment club with convertible bonds because the owner was just a brilliant guy and this is what he knew. I wrote a software program to help analyze [the holdings], and of course I knew absolutely nothing about what I was doing, but it sounded pretty good. We had a group of clients that invested in that, and many of them said, ‘What else do you have?’ Then I heard about financial planning. I went to the College of Financial Planning and I learned what the essence of planning is, and I started my own company that was all women, and that only worked with women. I did that because my father died when I was five, and while my mother was a very smart lady, she had absolutely no idea what to do with money.

It occurred to me that every marriage ends in divorce or death, and the average age of a widow is 56. All of those things point that if women are not handling their own money today, they will, and nobody has ever prepared them for it. I had been a teacher even before I started with real estate. I can teach all 12 grades, but I taught 3rd grade and 1st grade, and in fact I tell my students now when they come in the last time I taught I was making everyone get up and go to the bathroom.

I had met Harold and we were just communicating as advisors, and we had a great relationship. My mom had moved to Florida, she wasn’t well, and I started thinking maybe I should get out of Chicago. So I called Harold, said I was thinking of moving to Florida, and he said, “Why don’t you come and join us?” And I said that would be great but I would have to be an owner/partner, because I’ve always owned my own business and I would have to be president, too. He called me back in two days and said okay. So that’s how we got together.

You give advice to many people. Where do you get your own advice?

I go everywhere. I’m a synthesizer of information–we planners do that. I really am a listener. Most people who know me think I talk a lot, and have a great opinion on everything, but the truth is I listen. I listen to people in lots of different businesses about what is challenging to them, and what kinds of things that they’re doing. And I can always find some kind of application to my life.

If I listen to other people in my industry, I tend to get too focused on my industry.

For example, in the 1980s, I became the first women member of Rotary in the United States. I went to a Rotary meeting and I was sitting next to the regional director of Delta Airlines–this was in Chicago. I said to him, ‘Who’s your competition?’ I was a smart ass; I thought he was going to say United Airlines because we were in Chicago. He looked me straight in the face and said, ‘AT&T.’ We began to talk about how phone lines will be able to bring people together without getting on an airplane. This was so important to understand how your competition comes at you in different ways. I look at my practice, and I realize that I’m not in competition with the planner down the street. I’m in competition with a lot of places like Fidelity and Schwab. Not competition in a sense that they can replicate the kinds of things I do with my clients, but I think I can use that to my advantage: we are in coopetition rather than competition. That freed me up to do a lot of things with a lot of people and with a lot of arrangements. For example, I hand my clients a software package like Quicken and saying, “You need to do this because I’m not going to put you on a budget. You can accomplish this without me.”

Any advice for a new advisor?

Actively seek a mentor who can put a framwork around what you want to do. You can’t be successful just relying on your own capabilities and wits.


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