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September 01, 2008 at 04:00 AM
When Tony Purpero decided to sell his book of business after close to 30 years in the wirehouse world and move from Medford, Oregon, back to southern California, where he’d grown up and his nonagenarian parents still live, he thought he was heading into semi-retirement. Life however, threw him a curveball and today he’s a senior financial advisor and one of five primary owners of Partnervest Financial Group, LLC, a seven-year-old, privately owned firm based in Santa Barbara, with broker/dealer, SEC-registered RIA, and corporate insurance subsidiaries.
Purpero finds it somewhat ironic that after moving into what he thought would be semi-retirement, he now spends much of his time not only working, but working on other people’s retirements–both for individual clients and participants in 401(k) plans.
“We’ve developed a 401(k) format where we can do it in-house for smaller accounts,” he says. “I ended up learning about 401(k)s and now I work with several small corporations.”
Back to the Future
Purpero became a broker in 1978 with a firm that eventually was subsumed into Smith Barney, but in 2002 he started selling his book, a process that took three years, moving his offices in 2003 to the brokerage firm’s Santa Barbara office. That same year he also married Sharon Clenet, a widow with four children.
Prior to meeting him, Purpero says his wife was smart enough and lucky enough to have found some good people to help her with her finances, but as is the case with many affluent individuals, she had numerous advisors but no coordinated plan.
“In reviewing my wife’s accounts we discovered there was duplication in her portfolios and some mistakes had been made in her overall estate planning, potentially costing her additional estate taxes,” Purpero notes. “Just one example of this was the purchase of a life insurance policy recommended by an attorney for the benefit of her children. She paid the premiums out of her personal account; no irrevocable insurance trusts were recommended. It appeared the advisors were unsure or unaware of the direction the other advisors were taking. Everyone assumed Sharon was getting the proper advice and that she knew the right questions to ask. There was a need to have someone become the team captain to bring all of these different specialists together.”
Purpero, the new husband, became that team captain who made sure all the players knew their assignments. “Going forward, our objective was to coordinate all aspects of the estate. We needed to make certain all advisors knew the goals and objectives, what the tax consequences would be, what insurance was needed, and the appropriate trust documents.”
The problems faced by his wife, Purpero says, are not that uncommon. “When a financial plan is put together the advisor should always assume that the client does not know all the right questions to ask,” he points out. “If you call yourself a financial advisor I believe you should have contact with all the pertinent professionals–accountants, tax specialists, insurance specialists, attorney specialists–that would fulfill the needs and the objectives of the client.”
Even though he no longer had a full roster of clients, Purpero still had assets of his own to manage, as well as those of his wife, and a group of doctors, some of whom he had known since he attended medical school with them and were among his original clients, not to mention family members. Since he still had a hand in the financial world through those connections, Purpero was willing to listen when he was approached by a local headhunter on behalf of Marcy Burton, Partnervest’s chief marketing officer.
Purpero says he had no desire to get back into the wirehouse environment from which he had just escaped but was very impressed with the way Partnervest was structured as well as with its business platform and the fact that he could continue to use the same money managers he had been working with for years.
“We have an in-house program we call STAR with six different styles of management of no-load mutual funds and institutional funds, and an advisory team of money managers that manage the portfolios for our clients. I hadn’t seen that anywhere else,” he says. “I didn’t know that such a corporation existed and I didn’t know that they could compete at an even more sophisticated level than the wirehouses.”
When Purpero came on board he decided to put both his personal assets and those of the doctors whose accounts he managed into the STAR program. To smooth the transition, Partnervest’s CIO flew with him to several different states to meet with those clients and explain the program. “I have fiduciary responsibility for my clients, but the STAR team here is actively managing the asset classes, more so than I could ever do myself,” he explains.
Taking On a New Role
Purpero’s background for most of his more than three decades in the industry was in asset management. He was involved early on in the wrap business and came to manage the portfolios of a number of different clients, which began his transition from commissions to fees. During this time, he says, he was one of only about 3% of portfolio managers in Smith Barney who qualified as senior portfolio managers, which required meeting certain educational, asset management, and track record benchmarks. “When I say ‘managed,’” he clarifies, “I hired the managers, but I also was one. I never [actively managed] more than 25% of an account because my style was growth.”
At Partnervest, however, due to the success of the STAR program, he’s taken on a different role. While all of the firm’s 60 or so other advisors are independent reps, Purpero works out of the corporate office with most of his time devoted to working on corporate 401(k) plans and with wealthy people who are at or near retirement age and want to preserve their capital. Purpero also spends time working with Partnervest’s reps in areas where his 30 years of asset management expertise can come into play. “Because I’m the corporate advisor, I’m the advisor’s advisor,” he says.
