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July 01, 2007 at 04:00 AM
There are almost as many different types of financial planning firms as there are individual financial planners. There are firms consisting of multiple generations of the same family–fathers, sons, uncles, and cousins–and there are firms made up of individuals who’ve come to financial planning as a second career. There probably aren’t too many however, that fit both of those descriptions, other than Topkis Financial Advisors in Wilmington, Delaware, where William M. Topkis and his daughter, Nicole Topkis Pickles, ply their trade.
The elder Topkis spent more than 30 years in the insurance business, with Provident Mutual, before retiring in 1994 at age 55, when he decided to embark on a second career as a comprehensive financial planner.
Always An Entrepreneur
A man true to his roots, Bill Topkis was born and raised in Wilmington, where he became an Eagle Scout at age 13, part of a family with a long history in the state. When he graduated from the University of Delaware, he really had no idea what he was going to do, but he knew he didn’t want to take one of the offers he had gotten from either of the state’s largest employers, the DuPont Company or Bethlehem Steel. Topkis always had an entrepreneurial bent and met someone who convinced him the life insurance business could be the avenue he had been seeking.
“So I went into the life insurance business,” he recalls. “My wife and I moved to Philadelphia and lived there for five years and very early on I became a member of the Million Dollar Roundtable.”
At age 28 he moved his wife and baby daughters back to Wilmington and took over an agency that had been started by Provident Mutual. Within a few years, Topkis was able to reverse that agency’s fortunes and it soared from 69th in the company rankings to fourth, he recalls.
Then, in the early 1970s, he was approached by some young doctor clients from Jefferson Medical College in Philadelphia who wanted him to help them set up Keogh plans. Topkis found a small brokerage firm in Pennsylvania that would sponsor his license and brought the idea to the Provident Mutual. The insurer’s response was to threaten him with termination.
“Well, they didn’t fire me and I passed the test and I became one of the first agents in Provident Mutual to sell mutual funds,” he recalls. “Eventually the Provident Mutual had their own series of funds because they formed their own broker/dealership.”
A decade later he went back to Provident Mutual with another request–that it share the legal startup expenses for forming an RIA. They agreed this time and he became the first of the company’s agents that was also a registered investment advisor.
“I started an RIA as a result of a study group I was in,” he recalls. “There were eight of us in this group, and we had a consultant from McKinsey who told us that at the turn of the century, because of the way we trained people, we would probably be involved in the financial planning industry, whatever that was at that time.”
After Topkis retired from the insurance business in ’94, he decided to make that consultant’s prediction come true by becoming a comprehensive financial planner, using his existing RIA. In 1995, after talking to a number of leading fee-only planners who told him one of their biggest stumbling blocks was finding insurance people they could trust. Topkis says they advised him–since he had such a strong insurance background and the requisite licenses–to adopt a fee-based model for his practice.
In his early years as a planner, Topkis had one or more partners but last year he felt it was time to fly solo. He felt that he and his partner at the time, Dan McDermott, were moving in different directions and had an amicable parting of the ways.
No Client Profile
Unlike most financial planners, Topkis doesn’t have a particular type of client in mind, nor is there a stated client minimum. “I decided a long time ago that I’m not going to have a client profile,” he says, adding that what attracted him to his second career is that “financial planning is all about people; it’s not about products, it’s about helping people. It’s about life planning.”
To show what he means by life planning, Topkis relates the story of a client referred to him by a local negligence attorney (who also happens to be a client). The woman in question is 79 years old and recently received just over $4 million as her share of a settlement from a bus accident six years ago that cost her both legs. Topkis estimates that he’s spent 50 hours so far this year on life planning for this client, which included having a special van built to her specific needs, doing the due diligence to find her an independent living facility with the ability to transition to assisted living, if her physical condition should deteriorate, not to mention putting together an investment plan to manage her now substantial assets. They decided to keep close to $1 million in CDs and Treasuries and put the remaining $3 million into a diversified portfolio. For managing this client’s assets, Topkis is charging between 75 and 80 basis points. “I hold [the asset management] separate from the financial planning and life planning,” he explains. “Asset management is only one leg of the stool of what we really accomplish with the client.
“My hourly rate today for financial planning is $200 an hour, but clients don’t want to know that, they don’t care about that. What they want to know is what’s going to be the minimum fee if we do planning with you?” Topkis says. “And we talk about that early, in the second interview, after we discuss the process they’re going to have to go through, and I’ve given them what I call their homework, which is gathering all the information they’ll have to give us, and I say the fee is really a process of time.”
