The Winner’s Circle has proved its mettle as an enduring institution in the financial industry. A program for ranking the best financial advisors, it is widely respected as a means for recognizing and transmitting best practices in the advisory field. This year, as in previous years, Research joins in congratulating all the winners and takes a closer look at a few who made the cut. In what follows, we focus on four impressive teams.
Click here for a complete list of Horizontal, Vertical and Family Teams.
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Eckerline, Bencini and Boyd GroupMerrill Lynch, Wayzata, Minn.$1.8 billion in assets under management
The Eckerline, Bencini and Boyd Group’s management structure is so flat that even the client associates can almost squeeze onto the top line. Of the six associates, one has an MBA, one has the CFP certification, one has the CRPC designation and five of them have their Series 7 registration.
This level of knowledge among the assistants is just one of the elements that sets the Minneapolis-area Merrill Lynch team apart from the competition, says Peter Eckerline, the senior partner. For many years Peter has been recognized as one of Barron’s Top 100 advisors by The Winner’s Circle, and his two primary partners, Christina Boyd and Barbara Bencini. Boyd and Bencini were both named to Barron’s Top 100 Women Financial Advisors list in 2008. The average tenure of the three senior partners is over 20 years.
“We have a very deep bench,” Eckerline says. He has an MBA and a chartered retirement planning consultant designation. Bencini has a CFP certification and a certified investment management analysts designation. Whatever resources they don’t have on staff they have readily available within Merrill Lynch.
“This business has become so much more complex, and high-net-worth clients are demanding the best of the best, and we want to provide that,” Eckerline says. Having a strong team in place that can advise clients throughout their financial lives, from college savings and home financing to estate planning services and retirement income strategies, is critical to meeting the increasingly sophisticated needs of the high-net-worth client base.
“We utilize a lot of Merrill Lynch tools, such as Wealth Outlook and Retirement Income Service,” he says. “We deal with a lot of boomers who are either retired or heading in that direction and need help with the transition from asset accumulation to distribution.”
A broad cross-section of in-house experience also allows the team to work with a wide variety of corporate and private wealth clients, mixing and matching team members based on each client’s needs. For example, Eckerline and Bencini both work with the group’s largest client, a major corporation in the Twin Cities area. Bencini advises on its 401(k) plan, while Eckerline works with senior executives on their corporate cash flow.
“When Barbara meets quarterly with plan participants, I’ll go with her and meet with the treasurer and CEO,” he says. “That has helped us deepen our relationship with the client, and now we are discussing doing some corporate-based lending with them.”
From the business management perspective, all the team partners, including Joe Gibbons, are engaged with client relationships. Bencini does most of the financial strategy work for clients, while Boyd and Eckerline spend more of their time building the practice.
All clients have a lead advisor, and the client associates divide the book by the clients’ names. Each is the primary service contact for a section of the alphabet, and every client associate has a designated backup.
“Whenever a client calls in, they always get someone who has a relationship with them,” Eckerline says. “We each have an important role in the success of the team. Everyone is on the same track and focused on team growth,” he says.
The Novelli GroupCitigroup, Houston$1.7 billion in assets under management
When one of The Novelli Group’s clients was ready to retire from his CEO position at a major oil field service company, he had to decide what to do with the significant amount of restricted stock and options that he had accumulated over the years. Leveraging the expertise of his two senior partners, David Novelli put together a trading plan to sell the company stock the client owned outright while John Vander Voort managed the options. Vander Voort and his staff determined the optimal timing for each option to be exercised, settled every transaction with the company and filed all of the necessary paperwork with the SEC. As the options were exercised, Novelli included the shares in the systematic trading strategy.
After the shares were sold, the client, who was working with his estate planning attorney, established a grantor retained annuity trust (GRAT) for himself and his wife to facilitate the tax-free transfer to their children. Diane Gonzales worked with Novelli to develop an investment strategy that would maximize the client’s ability to make annual gifts to his children.
The client service group set up all the accounts necessary to fund the GRAT and implement the strategy. Now into the second year of his plan, the client has established a new set of GRATs that the team is managing as well.
“For our clients, how to deal with the equity compensation that they’ve earned in their careers may be the single most important decision they have related to the accumulation and protection of their wealth,” says Novelli, who has been designated as a Barron’s Top 100 advisor by The Winner’s Circle for many years.
“Because we have two businesses that are tightly woven for our clients, having the expertise in both their corporate wealth creation world and their private wealth preservation world under one arc ensures that we are just a moment away from expertise,” says Novelli.
With two separate business divisions, the Houston-based Novelli Group looks more like a boutique firm operating inside the Citigroup infrastructure. Novelli is managing partner, while Vander Voort and Gonzales head up the team’s two major businesses — corporate services and private wealth management. There are eight financial advisors on board, and the team totals 15 employees.
Each financial advisor, including both John and Diane, are compensated directly based on the revenue generated by their client relationships, plus staff members receive incentive-based compensation based on overall team performance.
As the team has grown over the years, and as the advisors and group directors assume more responsibility, it has slowly transitioned from a vertical team, with Novelli at the top holding on to 100 percent of decision-making and 100 percent of the equity, to more of a horizontal structure.
Since 2002, he has been letting go of both, passing management authority and a share of the business to his primary partners, Gonzales and Vander Voort, along with the rest of the team. Novelli’s ownership has dropped to around 65 percent, with a goal of eventually getting that below 50 percent.
“Our mission is to provide exceptional service, and it’s been my experience in working in this industry and running this practice that the greatest motivator for behavior is a sense of ownership,” he says.
RMD Wealth Management GroupMorgan Stanley, New York$850 million in assets under management
Ultra-high-net-worth clients aren’t looking for great stock pickers or the inside track on the latest hot deal. They want to know that their wealth will be able to sustain future generations while supporting the charitable endeavors that they are passionate about. And they want — no, they demand — best-in-class service at every touch point.
That’s why all of the client service assistants working with New York-based RMD Wealth Management Group go through Ritz-Carlton customer service training.
“We are ladies and gentlemen serving ladies and gentlemen,” quotes Jose Rivera, a Morgan Stanley senior vice president and the “R” in RMD. To that end, Rivera and his partners, David Maldonado and Armand J. Del Medico, have built a team infrastructure designed to meet the complicated needs and discriminating standards of this sought-after client base.
Rivera and Del Medico are the self-described “rainmakers,” tapping into their extensive of network institutional money managers, hedge fund managers and high-net-worth clients to bring in prospects. Maldonado is the team’s analyst. He goes through prospects’ current portfolios and financial statements to look for any weak spots.
“He’s the one who makes us look good,” Rivera says.
Then the three will work together to shore up those areas and present the potential client with a comprehensive plan built around personal and family goals.
“What makes us so unique is the discovery process that we go through with each prospect,” Del Medico says. The first meeting focuses exclusively on understanding the client from a deeply personal perspective. They want to know what is important to them outside of their financial concerns. Who are the most important people in their lives? What are they passionate about?
“We connect with them on a personal level before taking on any financial issues,” Del Medico says.
For example, two years ago Rivera and Del Medico met with a young couple who were both working on Wall Street and bringing home healthy paychecks and bonuses. Despite their wealth, though, they had no overarching plan. Investments were scattered, and they had no estate plan and no structures in place to take care of their children should anything happen to them.
After spending a Saturday with them in their home going through the discovery process, they worked with Maldonado to review what the couple had and what they were missing. They designed a comprehensive plan covering all of the family’s core issues, and the couple signed on immediately.
The couple were so motivated by the process that they referred the team to his father, who had an $8 million portfolio with no cohesive structure supporting his goals. Then the couple introduced the team to her father, who was also financially successful but had assets spread across a variety of holdings and a very limited estate plan.
“One touch, explaining what we do with our team and our network, leveraged us into a good family relationship,” Del Medico explains.
A critical part of the team includes the clients themselves. RMD has pulled some of their top clients into a Client Advisory Panel to advise the group on business issues and provide recommendations and feedback on their service. For example, one member of the panel is a public relations professional, so he reviewed the team’s latest brochure.
Another person on the panel is a college placement consultant, and she will work with other clients who are trying to get their kids into college. The team works with an outside appraisal expert who will evaluate clients’ non-financial assets, such as artwork or boats.
“That is where we add value to the client relationship,” Del Medico says. “These aren’t revenue generators for us, but it makes the client think long and hard about who they are working with.”
Fragasso Financial AdvisorsLPL Financial, Pittsburgh$700 million in assets under management
Robert Fragasso, president and a managing director of Fragasso Financial Advisors in Pittsburgh, bristles a little at the word “team.” For him, it conjures up visions of one broker hiring a bunch of assistants to leverage his or her time, or a handful of brokers going in together to share administrative personnel while running their own books of business.
“That’s not a team,” Fragasso, who has been designated as a Barron’s Top 100 independent advisor by The Winner’s Circle, insists. “That’s a real estate office. We’re a firm.”
For Fragasso and his partners, the distinction is clear. His name is still on the company logo, but he is just one of four managing directors and two senior managers overseeing day-to-day operations. And all 25 advisors and client service associates work on only one book of business — the firm’s book, with $700 million in assets under management representing 1,500 families, endowments and retirement plans.
Managing that many clients in a cohesive, consistent manner requires military-like precision, which is why Fragasso likens his team to a “special ops” unit. Everyone has a defined task based on a specific skill and every movement is coordinated to reach a common goal.
“Our financial advisors don’t go out and try to find business,” Fragasso says. There is a separate marketing and seminar department dedicated to public relations, advertising and arranging educational seminars held at universities and corporations. And because the firm is a fee-only registered investment advisor, no one is pushing specific investment products to earn a commission. There is a centralized investment department that manages each client portfolio based on that client’s individual financial plan, but works within the consistent investment parameters set by the firm’s directors.
Jobs within the firm are clearly defined. Each managing director oversees specific teams, which are made up of two financial advisors, one portfolio manager and one administrative assistant. There is one person handling all of the firm’s corporate retirement plans, and one financial planning specialist who gathers and assembles the financial data necessary for the creation of financial plans. There is even a “Director of First Impressions.”
A comprehensive financial plan is at the core of every client relationship, and the firm’s sole focus is implementing and monitoring each plan. There are four CFPs on staff, and every client gets the benefit of all of their combined expertise. Every Friday morning, all of the financial advisors and portfolio managers meet to go over any new financial plans that were drawn up over the week, offering their perspectives and ideas.
Then a “board of directors” is assembled for each client, including the lead advisor on the account, the client’s own outside advisors, such as an accountant or an attorney, and any other professionals that may be needed based on the client situation, such as a real estate professional or a business management consultant.
“Most investment people shy away from interaction with those other professionals as they see them as deal killers,” Fragasso says. “We see them as trusted fellow advisors.”
To ensure that compensation reflects the team culture, everyone at the firm is on salary, and everyone shares in profitability. The entire staff, including Fragasso, also goes through a personal evaluation program — PEP — twice a year. These evaluations focus on personal development, which means one person might be working on his CFP, while someone else might be focused on improving her public speaking skills.
Fragasso’s next goal is to ensure perpetuity of the firm by expanding equity ownership. In early 2008 he began making stock available to all of the employees at a discount.
“You don’t lose by sharing. You gain.”
R.J. Shook is founder and President of the Winner’s Circle, LLC. The firm’s research appears in three annual Barron’s cover stories, and is featured in dozens of regional publications including San Francisco Business Times, Los Angeles Business Journal, Crain’s Detroit Business, and Connecticut Magazine. The annual Barron’s /Winner’s Circle Top Advisor Summit is scheduled for Sept. 24-26 and the Women’s summit for Dec. 3-5. For more information visit www.WCorg.com. The Winner’s Circle is a registered trademark of The Winner’s Circle, LLC.