High-End Service

The big financial meltdown has served to strengthen and validate the Grant-daRoza model, which concentrates first on determining cash flow needs, then on establishing portfolios based on them.

“We call it bottom-up asset allocation; it’s not traditional top-down risk-reward selling,” Lee says. “It’s using your brain to figure out how somebody wants to live, helping them realize what it costs, budgeting … then protecting that with a portfolio they’re comfortable with.”

Opus has about 450 clients, but 25 percent of its business comes from joint relationships with other FAs in the branch for whom it helps manage ultra-high-net-worth situations.

In the wreck of last year, 99 percent of Opus clients found it unnecessary to alter their lifestyle. Lee credits that good news to having planned accordingly for each client’s required cash flow.

For instance, does the investor need to maintain a second home? A business? Private aircraft? Ranch property? “The only thing that hurts clients with a lot of wealth,” notes daRoza, “is getting in a position where they’re a distressed seller.”

The two senior advisors, both of whom are certified investment management analysts (CIMAs), handle strategy for the group. Each of the other four FAs — two having joined at the start of this year — concentrate on prospecting specific market segments: private companies (most of them nearing an M&A or IPO transaction), public companies, endowments and foundations.

Eighty percent of ultra-high-net-worth accounts are referrals, Lee says; and that is partly why the team maintains a network of more than 100 other professionals, including investment bankers, venture capitalists, attorneys, CPAs, real estate types and Hollywood and sports agents.

Lee began as a Shearson Lehman trainee a few months before the October 1987 crash. Bad timing? Just the opposite. “I was in the right place because when there is no crisis, there is little opportunity,” he says. “In 1987 I learned that [in a crisis] many brokers leave and there’s a lot of client turnover. All that creates a whirlwind of activity. If you work hard and smart, you can capture that opportunity. [Today] there are damaged people out there because they were sold product based on expected return.”

San Francisco-born Lee, whose father emigrated from China, earned a BS in managerial economics from the University of California at Davis in 1984 and was hired immediately for the management training program at Franklin Resources (now Franklin Templeton Funds). Two years after moving into sales and marketing there, his mentor, the chairman of the firm, thought his interpersonal talents were underused and persuaded him to leave to become a financial advisor. (“I’m forever grateful to him.”)

That’s when Lee joined Shearson Lehman (an MSSB predecessor). In 1989, he began working with wealthy offshore clients and in four years grew the business from $10 million in assets to about $200 million.

By 1997, daRoza had teamed up with Lee. From Pacifica, Calif., he has a BA in finance and banking, and earning his way through San Francisco State University, had launched a number of entrepreneurial ventures from advertising to carpet cleaning. By the time he came on board with Lee, he’d established, at Shearson, a successful practice in retirement planning with a book of Fortune 100 clients.

That’s Lee and daRoza’s story. They, however, are more interested in learning their clients’ stories. Says Lee: “You must first establish how they want to live their life. Then you must convert that story to left-brain numbers and set up a portfolio that protects their cash flow.”