When a fellow escapes New Jersey to spend February in the sunny Arizona desert just as the Northeast gets hit with not one but several nor’easters that pile up snow and ice and topple power lines, you know you’re talking about a lucky guy. Don Schreiber may be fortunate, but he’s also a thoughtful, hard-working guy who’s built WBI Investments, his Little Silver, New Jersey-based practice, into a powerhouse firm that is budgeted to hit $4.5 million in revenue this year, has 20 employees, and derives a good chunk of its business not from the bread and butter of providing family-office-type services directly to high-net-worth clients, but from the distribution through other independent advisors of its “risk-managed, dividend-focused” separate account product. Schreiber is a reformed passive investor who turned away from that “conventional wisdom, that dogma we have in our industry,” not so much because he doubted the statistical evidence, but because it didn’t help individual clients. Schreiber spoke in his measured way to Editor Jamie Green by telephone in early March.
This year we’ll do $4.5 to $5 million revenue, and we have about 150 client relationships. We also have our WBI Investments wholesale distribution business, where over the last four or five years we’ve taken our investment management products to the independent advisory community, to help them better serve their clients. We have a risk-managed, dividend-focused investment management process that we’ve been doing for 15 years, that has been really successful.
The big problem with any advisory firm is that you can only manage so many client relationships. So one of the things we hope to do is broaden the number of people we impact by using the independent advisor as our distribution channel.
What percent of your revenues come from that business?
The independent advisor is a fickle person to try and get to change what he’s doing. I’ve been in the business 25 years, and I grew up with the same conventional wisdom and investing mantras that everyone else did. But my observation was that it wasn’t working for my clients, especially my older clients who were more risk averse. Buy-and-hold doesn’t work for individual investors. It works from a statistical standpoint, but people fail trying to buy-and-hold the markets, because the markets will hand them more risk and volatility than they’re willing to tolerate.
I don’t have any problem with the statistical research behind it, but what works for your clients? When I look at my statement, and I had a million dollars, and now I have $700,000, I know, logically, I should do something about that. It’s not emotional, it’s not fear and greed, it’s a logical step I should take to guard my own assets.
How did you get started?