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Practice Management > Marketing and Communications > Social Media

SagePoint Financial’s Jeff Auld on Crisis Management, BD Recruiting and Social Media Marketing

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Jeff Auld, SagePointTalk about trial by fire; Jeff Auld left Berthel Fisher Financial Services to head what was then AIG Financial Advisors in July 2008. We all know what happened roughly two months later, and any affiliation with AIG was (rightly or wrongly) an affiliation with the ills of capitalism itself.

“Any time news of AIG broke, the local affiliates in Phoenix would all park their satellite trucks in front of our building,” Auld says. “We instituted a pretty comprehensive security system. It was a stressful time.”

Not that he really likes to talk about it, but manage through it he did, and he is now looking to the future of the rebranded and revitalized SagePoint Financial. Auld sat with Investment Advisor for a candid interview about the past, present and (in his mind, most importantly) the future.

Q:  You took over at AIG Financial Advisors and almost immediately entered crisis mode. What was the atmosphere like at the time?

A:  I became the CEO of this firm in July 2008. I spent the first eight weeks traveling extensively; visiting branch offices, meeting advisors and getting to know my customers. Suddenly, on an early Monday morning, I got an e-mail on my Blackberry alerting me to the AIG problem—completely out of the blue. I remember in June when I was preparing to meet [AIG Advisor Group CEO] Larry Roth to interview for this position. I told my wife AIG was the sixth largest company in the world. Two months later I had to tell her AIG needed only a mere $30 billion (at that time). So it was a dramatic change.

Q:  What did you learn from managing the company through that sort of crisis? What are you taking from the crisis?

A:  It seemed instinctive. I didn’t sit down one day or consult a textbook or come up with a written plan. Almost immediately I began weekly webcasts with advisors every Friday morning. I answered questions, addressed concerns and responded to rumors, because they were flying all over the place. In hindsight, the frequent and communication with my customers got us through that as well as it did

Q:  With where you find yourself now, as a company, what attributes are you looking for in an advisor?

A:  I feel like I have a huge sweet spot. On one hand, I have producer groups with multiple OSJs that do $8 million or $10 million dollars in production. Our technology and our supervisory platform allow us the scale and payouts that attract large groups of producers.  On the other hand, we’ll permit advisors with as little as $250,000 of production to have the choice to either become an OSJ or be a stand-alone satellite office supervised by our home office. Very few firms of our size give advisors that breadth of choice.

Q:  How are you separating yourself on the technology front?

A:  We’re piloting a product with our advisors to market their practices with social media. It gives the supervision department the comfort that they can capture everything they need to do the supervision that’s required. One of our enhancements in 2010 was that we rolled out a marketing library. It’s an electronic library that’s available on our website. There are over 3,000 pre-approved marketing pieces and all are filed with FINRA. They are all customizable so when our advisor logs into our website we know who it is.  And we’re interfacing the library with this social media product so our advisors can have Facebook pages that can pull in these marketing pieces.  

Q:  Is that a competitive advantage? Are you the first out of the gate with this?

A:  To the best of my knowledge it is.

Q:  Do you typically do things on the leading edge?

A:  I don’t know if we have historically, but I think we have in the last year or two. We’ve made some dramatic leaps in our technology.

Q:  Does Larry leave you alone to run your own business? Are you autonomous?

A:  Larry lets me run this business. Just to give you an example; back in the midst of the AIG thing, we had already initiated the consolidation of American General Securities Inc. into my broker-dealer, AIG Financial Advisors. We were doing the merger. They’d spent months working on that. All of a sudden, just because of the confluence of events, AIG blows up in September 2008, just about the time that we start mailing letters to the customers of American General Securities telling them that their accounts will be transferred to AIG Financial Advisors.  I arrived at the conclusion that we should stop the merger. We don’t want the advisors to have to tell their customers, “Now you’re doing business with this AIG,” even though it was one company anyway. I discussed that issue with Larry and he said, “I don’t agree with you, but I’ll support your decision.”  That was the first time in 30 years I had had a boss say, “I don’t agree with you but I’m going to support your decision.” Now ultimately he was right. I had a conference call with approximately 15 of the biggest producers with American General and they agreed with Larry. “We’ve already told our clients we’re doing this. We don’t want to confuse them further by stopping it.”

Q:  How is your recruiting this year?

A:  We’ve just finished a profitable year and we’re already ahead of our budget for 2011. We’ve had a huge rebound in our recruiting. To give you a sense of that, we recruited almost $10 million in new production in 2010. And almost all of that came in the later half of the year. I’ve already had $3.5 million worth of new producers affiliate with us in the last 4 to 6 weeks.

Q:  What do you attribute that to?

A:  I think an awful lot of it is coming from referrals. I would say at least half of our new advisors are being referred to us by existing happy, satisfied customers. We’ve already had the letters of intent and advisors that have committed to joining us. They’re already scheduling the transition in the next 90 days, and we’ll cross out 2010 total at that time as a result.

Q:  How do you feel about moving forward with FINRA as the industry’s sole SRO?

A:  I still believe given the choices that FINRA is probably the best and most likely SRO. But from what we’re hearing it seems like we may still be waiting at this time next year to know ultimately who it’s going be.

Q:  Does it concern you from an operational standpoint about the disclosure ideas FINRA is suggesting; a Web-based platform that drills down deeper into compliance if the client so chooses to click on it?

A:  FINRA’s Richard Ketchum had an interesting term—“layered.” Layered disclosures, which to be more pointed meant “repeated.” I’m not convinced that repetitive disclosure is better, but I do know it makes it more expensive.


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