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Iron Man

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It was always James D. Nagengast’s plan — after eighty-sixing a teenage notion to be a doctor, lawyer or computer scientist — to turn a small business into a big company. And for the past 14 years, he’s been doing just that, at Securities America Financial Corp. in the nation’s heartland, where he grew up.

Promoted to president of the Omaha, Neb.-based firm’s broker-dealer division — its main operating unit — Securities America, Inc., last August, Nagengast is a brainy strategist committed to innovation and focused as much on organization and details as the big picture.

He takes over from Steve McWhorter, chairman and CEO of the Securities America companies. The former president is grooming Nagengast to be his eventual successor.

Creating a big firm from a small one was enticing to Nagengast, 43. “It’s the idea of building something with fast growth and the tremendous opportunity to make a difference in people’s day-to-day lives,” he says.

At the same time, Nagengast, a CPA who retains the posts of chief financial officer and chief operations officer, is out to “make sure things beyond our control don’t disrupt the firm. We’ve managed to avoid auction-rate securities and collateralized mortgage obligations problems. Risk management,” he says, “is partly avoiding problems with product and making sure our advisors…are in compliance so their livelihood isn’t put at risk.”

Since joining the company in 1994, the entrepreneurial Nagengast has managed S.A.’s growth from $52 million in revenue and 90 employees to $506 million and 450 employees, as of ’07.

It was Nagengast who negotiated the 1998 sale of Securities America to American Express — at, he says, the highest price ever for an independent BD — and without the help of an investment banker.

Further, this past summer he orchestrated S.A.’s acquisition of California-based Brecek & Young Advisors, a deal that was to close in late October and which expands S.A.’s West Coast presence, a major goal now about to be realized.

A strong advocate of building S.A.’s technology initiatives, Nagengast is swift on the road to the “paperless office, having overseen growth of the firm’s annual tech budget from $500,000 in 2000 to more than $10 million today. By year’s end, S.A. will roll out an imaging system that synchronizes advisors’ desktops with all client documents in back-office files.

“Jim has been critical to the overall strategy we’ve developed. He understands how to bring everything together to make a smoothly run operation,” says McWhorter, whose plan is to mentor the new president for six months to a year. “I wanted to see the complete Jim Nagengast in action — to put him in a position where he could make more decisions in all areas [so I could] see if he’d be the right person to take my place some day.”

Nagengast has set his sights firmly on growth. “We have aggressive growth plans and are committed to doing more acquisitions,” he says.

Branch office development along with helping advisors develop their practices figure prominently on his agenda too.

“This is a great time to be an independent advisor,” Nagengast says. “The baby boom generation needs trusted advice. Independent advisors bring advice free of conflicts about proprietary product. The recent problems of some of the wirehouses are making the road to independence look even sweeter.”

S.A.’s BD, which American Express spun off in 2005 as an Ameriprise Financial subsidiary, has more than 1,600 representatives with assets of $44 billion under control. With the Brecek & Young merger, the total number of advisors will rise to 1,900-plus.

Born and reared a doctor’s son in the tiny farming community of Bloomfield, Neb. — population 1,200 — Nagengast, youngest of six, entered college as a Harvard Scholar, the highest award (earned for all-around high school achievement) Harvard gives to incoming freshmen.

It was a culture shock, however, going from “the conservative Midwest to the liberal East Coast and the liberal environment at Harvard,” says Nagengast, who graduated magna cum laude.

Following two years as an analyst at Merrill Lynch Capital Markets, he gravitated to a more entrepreneurial job and signed on as a consultant with Marakon Associates, in Connecticut, to help Fortune 500 firms formulate strategies.

He then returned to formal studies, receiving an MBA in finance and accounting from Columbia University Business School. Next, it was back to the Midwest, where, for two years, Nagengast ran Robalt Corp., maker of pharmaceuticals from animal by-products; and it manufactured sausage casings as well. By now he was ready to take that final entrepreneurial shot, and the perfect firm was Securities America.

Highly competitive in both business and athletics, Nagengast enjoys 17-hour endurance races and, ever seeking a new personal best, 10K road races.

In 2006, he ran another race — this time for public office. It was his first try. Though he lost the University of Nebraska regent election, he gained a great deal else. For starters, he says, “I learned how to be a much better public speaker and a better listener.”

Beyond that, the contest was a real confidence booster. “When you put yourself out there, you’re exposed to potentially tremendous criticism — you know that 100 percent of the people aren’t going to agree with you. By running for public office,” Nagengast says, “you develop a gut of iron.”


Freelance writer Jane Wollman Rusoff is a Los Angeles-based contributing editor of Research and is the founder of Family Star Productions.