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Financial Planning > College Planning

Horse Sense

By Corey Dahl, From the November 2011 issue of Life Insurance Selling

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When it comes to thoroughbred racing, there’s a lot more on the line than those horseshoe-shaped victory wreaths. At this month’s Breeders’ Cup (Nov. 4–5), for example, prize-winning horses will trot home with purses and awards worth a combined $26 million.

Who manages all that money after race day has come and gone? In many cases, the job belongs to Jonathan Green and Alan Rubin, CLU, co-founders of Woodbridge, N.J.-based Targeted Financial Services. Their firm specializes in serving thoroughbred owners, trainers and jockeys — a market segment that makes up about 25% of the company’s 400-plus full-service clients.

It isn’t an easy clientele to serve. Insurers aren’t especially keen to add policyholders who work around horses averaging about 1,000 pounds. The community is close-knit, so if a financial advisor makes a mistake, chances are, everyone’s going to know about it. And home visits can be time consuming, since most farms aren’t exactly a subway stop away from the office.

But Green, Rubin and James Payne — a third partner who lives in Texas — have persisted, developing workarounds to the challenges and building a thriving business that now relies almost exclusively on referrals.

“There’s an inherent trust factor involved with what we do,” Green says. “Our clients know us through the racing industry, and now, through word of mouth. They trust us.”

Finding a winning strategy

That trust, of course, wasn’t forged overnight. It took a lot of elbow grease — and a few family connections.

As a kid, Green helped his parents run DJ Stable, a horse-racing operation on the East Coast that won multiple titles. His parents later switched gears and took over the Green Group, an accounting firm Green’s grandfather had run for years, and a few of their horse-racing colleagues signed on as clients. After graduating college, Green, with his parents’ blessing, spun some of those horse clients off for himself.

Not long after that, Green and Rubin met through mutual clients — Rubin was working on the clients’ financial planning and Green on their taxes and estate planning. Neither was looking for a business partner at the time, but as they worked with each other, something clicked.

“It was a great meeting of the minds,” Green says. “After four or five months of working together, we realized there was a real synergy between us. And we’re still kind of in that honeymoon phase.”

It helped that Rubin brought a solid background in insurance and financial planning to the partnership. Growing up, Rubin had been inspired by a family friend who had his own insurance firm in New York. “Seeing how he enjoyed the business, how successful he was, how flexible his time was — it really influenced me,” Rubin says. He earned his CLU while completing his finance degree in college and went into business as soon as he graduated.

Armed with Rubin’s expertise and Green’s contacts, the pair founded Targeted Financial Services and began the process of building a client base the old-fashioned way: door to door. For several summers, Rubin and Green would travel to the horse-racing hotbeds of Lexington, Ky., and Ocala, Calif., and drive, house to house, ringing doorbells.

“Literally, we would go farm to farm and ask them to give us a shot with their financial planning,” Green says. “It would just be the two of us in the car, in the middle of July, in Ocala, eating potato chips, just going from farm to farm. You have to pay your dues.”

Serving a rare breed

During these visits, Green and Rubin noticed a lot of common financial challenges among their thoroughbred clients.

Most are self-employed and own stables or farms with many employees — yet few had succession plans in place. “There was a unique opportunity for succession planning that nobody was addressing,” Rubin says. “We could help, whether with insurance programs, key-person or buyout coverage, and they were very open to it.”

Retirement and risk planning were other big needs for most of Green’s and Rubin’s clients. The majority of assets on a farm go right back into the farm, for equipment, maintenance and stock — all those horses — with little leftover for retirement or insurance premiums. And the uneven cash flows characteristic of horse farms — which spend all their money in the fall, buying horses, and then see a windfall in the spring, when they sell the animals — weren’t helping, either.

“There’s a real ebb and flow when it comes to cash flow,” Green says. “We get around it by working with them to set up single-pay insurance policies or work out other payment plans.”

Green and Rubin also recommend waiver of premium riders and DI coverage for most of their clients. “Horses are a variable,” Green says. “You don’t know what’s going to happen, day to day. You could have a sweet, gentle horse, but one day, they could wake up on the wrong side of the stall, kick you in the leg and you’re incapacitated.”

Coverage for clients working around temperamental horses isn’t always a breeze to get. But after years in the business, Green and Rubin now know the companies to call first. “Most carriers will not even consider a jockey because of their occupation,” Green says. “We know which insurance companies are willing to.”

Outpacing the competition

That specialized expertise has paid off. Today, Green, Rubin and Payne manage about $125 million in investments and do little marketing.

Most of the company’s business comes from referrals — either through word-of-mouth from current clients or passed on via the Green Group and other reciprocal relationships with accountants and attorneys. Green and Rubin also host annual financial seminars in Kentucky and California for their existing clients, who are asked to bring along interested friends.

Rubin and Green say client satisfaction stems from their approach to customer service. “Our commitment to service is critical,” Rubin says. “This is a 24/7 occupation. There is no real 9 to 5. We make sure we’re accessible at all times.”

That means no later than a 24-hour response to a client call is allowed. It also means Green and Rubin are on the road a lot, traveling to visit clients in the Carolinas, Florida, Kentucky and California. “It’s harder for them to come to us, so we go to them,” Rubin says.

If that sounds demanding, Green and Rubin say they easily make it work. In the age of smart phones and iPads, they’re able to get work done whether they’re in the office or on the road.

They’ve also structured their agency so that, although clients work with one agent, everyone meets each client and is familiar with every account. “The clients know that, if one of us isn’t here, they’re dealing with the owners, and that owner knows their situation,” Green says.

That leaves plenty of time for Green, 41, and Rubin, 43, to spend time with their wives and children — and watch the occasional horse race. The two, who use a database to keep track of all of their clients’ horse races and wins, are frequent guests at Churchill Downs and Belmont Park.

“Our clients have been very successful in racing,” Green says. “And we’ve been fortunate enough to ride their coattails.”

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