With the first of his 11 bestselling books, David Bach hipped folks on how “Smart Women Finish Rich: 9 Steps to Achieving Financial Security and Funding Your Dreams.”
Smart advisors finish rich, too. Take Bach, for example.
A former senior vice president at Morgan Stanley with $750 million in assets under management, by age 30 he was a millionaire — only two years after joining predecessor firm Dean Witter as a trainee. Then he set another goal: to become one of North America’s top financial experts by educating consumers — women, in particular — on how to manage their money.
Indeed, he met that goal, seguing from wirehouse advisor in Orinda, California, to sallying forth on his own as a full-time financial educator, giving seminars nationwide, writing bestseller after bestseller and in the process, becoming something of a media darling.
Now, at 47, the popular Moraga, California-born Bach has achieved yet another big goal: having an RIA. This past June, he joined Edelman Financial Services as partner and vice chairman. CEO-chairman Ric Edelman’s vast practice has 24,000 clients and $12.75 billion in AUM. Barron’s has three times ranked him the No. 1 independent financial advisor in the U.S.
To be sure, the Bach brand is widely known to consumers: his series of “FinishRich” books — including “Smart Couples Finish Rich” and “Start Late, Finish Rich” — have been published in 18 languages, with more than 7 million copies in print globally. He has scored more than 100 “Today” show appearances and became a familiar face on “The Oprah Winfrey Show,” “The View” and Fox News, among numerous others.
As a motivational and financial speaker, Bach has conducted seminars and given keynote addresses to leading financial services firms and Fortune 500 companies. Further, under a licensing program, for seven years his “FinishRich” seminars were taught by thousands of FAs.
At Edelman, Bach is serving in a management role, not as an FA. This summer he’s been busily updating the seminars and “Smart Women Finish Rich” book, an anniversary edition of which Random House will publish in April 2015. EFS trainers are scheduled to start teaching the public seminars next month.
All that heightened marketing is expected to generate big bundles of leads for EFS; consequently, the firm is in active recruiting mode.
Bach has had a passion for educating women ever since his 1993 trainee days, when he joined the practice of his father, Martin, near San Francisco. At client meetings, he says, he saw “terror in the eyes” of wives who “didn’t understand money.” Sixty days on the job, he held his first seminar for female clients. Soon the expanding father-son team was named The Bach Group. When David left, his sister, Emily Bach, took over the practice, now managing more than $900 million in assets.
Edelman is eight years Bach’s senior, which makes the duo appealing to a range of age demographics. That should prove helpful when they kick off a financial television series, now in the works.
ThinkAdvisor recently interviewed the candid New York City-based Bach about goals, dreams and aspirations — his clients’ and his own.
ThinkAdvisor: How do you and Ric Edelman complement each other personality-wise?
David Bach: We each appeal to different sides of the brain. I come at things more from the heart. I’m more the touchy-feely guy. I talk about values, dreams and aspirations. Ric is more the numbers guy. What’s your role at Edelman?
I’m a partner with equity in the company, and I’ve come on board to help grow the firm. We’re looking at everything from strategic acquisitions to growing structurally. My job is to be the face of the firm along with Ric and focus on education, media and also a lot of advisor training. I’ll be working closely with our advisors to teach them how to build their book of business. In the beginning, the biggest thing I’ll be doing is rolling out — once again — my education crusade for women and money.
Where do you and Ric align when it comes to EFS’ mission?
We believe that everyone across America deserves honest, unbiased, fiduciary fee-based advice and goals-based financial planning. We have 100 advisors that have been trained to do business the same way. Ric’s focus has been retirement planning; my focus has been women.
Will you and Ric be giving the “Smart Women Finish Rich” seminars personally?
No. We have a team of 10 professional trainers and educators on staff that will go around the country teaching them. We’re training these trainers, and then our financial advisors will be available to meet with prospective clients.
So with all that expanded marketing, you’re actively recruiting FAs. How is it going?
This year we’ve already hired 14 advisors that have gone through training. By the end of the year, we’ll have 25. The firm has more than doubled in 36 months. It went from fewer than about 50 advisors to almost 110 now. Our goal for next year is to hire 100 more — if we can find the right type of advisor.
What are your specs?
We’re looking for a special type. That’s really important. First, you need to have been in the business for at least five years. We want you to have worked somewhere else first so you know what the rest of the industry looks like. When you come to Edelman, you find it to be a completely different culture.
It’s “Fantasy Island” for financial advisors! You never have to prospect. The leads are generated by Ric and, now, by me too. They all come as a result of [Edelman’s] radio show, print advertising, direct mail and seminars. Qualified leads come in, and all the advisors have to do is meet with them.
How does that translate into assets under management?
Our advisors raise an average of $20 million to $30 million a year in AUM. Within five years, a brand-new advisor will have raised, on average, $100 million.
Forbes Magazine quoted you as saying, “The B.S. meter today is higher than it has ever been. If you’re not giving people the real deal, and you are not authentic, people will know.” What does that mean to FAs?
It’s worse for advisors than probably any industry. When I was a kid, people held the financial advisory industry in high esteem. Being a stockbroker was prestigious. Unfortunately, over the last 25 years, the financial services industry did everything humanly possible to destroy all that trust and respect. Today, the level of trust that consumers have for the industry is extremely low. That’s a big hurdle because so many people need help. Is the financial crisis mainly responsible for eroded consumer trust?
The level of trust is very low because many people are doing business unethically. All you have to do is look at the billions of dollars that are going to products that should never be sold that don’t necessarily serve consumers. The B.S. factor is huge, and that requires advisors to be honest and extremely transparent. They need to put the client first.
What specific qualities do you look for in an FA?
You have to be nice. If you know you’re not a nice person, you shouldn’t even bother trying to come here because you won’t get through the screening process. Secondly, you have to really want to put your clients first. If you’re a salesperson, you’re the wrong person for us. And then, you have to be a financial planner at heart: you like sitting down with clients and going through their goals, dreams and aspirations.
Is there any another requirement?
You have to follow our system. We have a very specific training program and absolute methodology in how to do the business, and you can’t deviate from it. If you’re somebody that can’t follow a recipe and isn’t willing to work within a system, you won’t work [out].
What about advisors who figure, “Wow, all the leads come to me. Sounds like an easy job”?
You still have to close those clients. You have to be able to meet with the clients and get business from them. You have to want to do at least two meetings a day with prospects or clients. When I was an advisor, I did seven to 10 appointments a day. So two seems like a cakewalk.
Who is EFS’ target client?
We’re reaching the mass affluent: people with less than $1 million. That’s the largest segment of investors. It’s where the bulk of wealth in America is today. Most of that’s in 401(k) plans, and [these investors] have IRA rollover needs. The average client at Edelman is around $400,000 [in investable assets], but the range is from $5,000 to millions.