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November 24, 2014 at 07:00 PM
Welcome to Research magazine’s Advisor Hall of Fame, now in its 24th year. This eagerly anticipated annual feature has become a benchmark of excellence in our industry and an example to all of the rewards that result from effort and integrity.
Candidates who pass our rigorous screens have served a minimum of 20 years in the industry, have acquired substantial assets under management, have demonstrated superior client service and have earned recognition from their peers and the broader community for the honor they reflect on their profession.
The contest’s final judging was performed by a distinguished panel of Research experts and contributors: Ronald L. DeLegge, founder/chief portfolio strategist, ETFguide; Bill Good, chairman, Bill Good Marketing; Jay Nagdeman, president, Suasion Resources; and Bob Seawright, chief investment/information officer, Madison Avenue Securities.
See the full list of past and present winners at thinkadvisor.com/halloffamewinners.
Lewis Altfest
Dreamer. Pioneer. Game changer. Lew Altfest, widely credited with changing financial planning for the better, is all those things. He is also a fulfilled man who says: “It’s easy to say there are stocks I could have made more money on. I could have done this. I could have done that. But things have apparently come together, haven’t they? I’m very content with the way things have turned out.”
Altfest, 74, was one of the industry’s first fee-only advisors—forming Altfest Personal Wealth Management in 1983 and co-founding the National Association of Personal Financial Advisors a year later. Last year, as the firm celebrated its 30th anniversary, Financial Planning magazine honored Altfest and his wife Karen with the Lifetime Achievement Influencer Award as advisors who have pushed the profession to new heights.
The last year has been one of reflection for Altfest—looking back but also forward.
“I would love to say that when I started out it was simple—that I would just announce who I was and they would come,” says Altfest, who had a successful career on Wall Street before launching his own firm. “It was a number of years before I took any money out. I had been used to high salaries and this was like being on a starvation diet. But I could see that even though I wasn’t making any money that the number of clients I had was growing and they were recommending clients. I had a trajectory.”
Today, Altfest leads a firm that manages over $1 billion in assets for 550 client households. What inspired him early on inspires him now: helping clients manage their entire financial lives. Altfest describes himself as the “thinker,” the “analyst” and the “doer” in a firm that prizes teamwork, character and accountability.
As Karen Altfest, who heads client relations, notes: “Lew is value-driven—not just in choosing investments but in his life. We have certain expectations of this business, certain values. There’s a lot of mentorship that happens here. One man in the office said something the other day and I thought, ‘Gee, that sounded just like Lew.’ Lew’s brought along a lot of people. We’ve all learned a lot from having Lew as our leader.”
Altfest remains a fierce advocate of conflict-free advice—a fact that is not lost on his clients or his staff. “We view ourselves as true fiduciaries. That means you step into the shoes of the person. You put their interests ahead of our own. We practice that. The number one feedback we get from clients is that they really perceive us as being what we say we are: fiduciaries. They trust us.”
Is Altfest surprised that the fee-only model hasn’t gone totally mainstream?
“That’s sort of like saying are you surprised HBO and Showtime haven’t taken over from CBS, ABC and NBC. I personally prefer watching more mature, sophisticated stuff when I watch television,” he says. “We have our niche. And we get a lot of clients coming in because of our objectivity. There obviously remains some appeal for others to continue in the old framework. To me, that’s not a pure situation.”
A self-described workaholic, Altfest rises at 5:30 every morning and scans The New York Times, The Wall Street Journal and Financial Times. Weekdays, he walks the two miles to the firm’s Park Avenue headquarters. Weekends, he works at the couple’s country home. Altfest also teaches financial planning at Pace University and he is currently working on a second edition of a financial planning textbook that is used at leading universities around the country.
And he continues to pioneer new systems to push financial planning forward.
His Total Portfolio Management, as an example, blends analytical and personalized assessment to create customized client portfolios. “It allows us to look at things in a more sophisticated way than just saying how much do you want in stocks and bonds and that’s how I’ll judge you,” Altfest says. “Our role is to discover what makes clients unique so we can help them imagine—and ultimately live—the life they desire.”
Altfest’s system, for example, considers financial assets like real estate and the client’s “human asset value,” which is the salary a person would make over a lifetime. Liabilities are also on the table. “From that, we can tell you how much risk you ought to sustain,” he adds. “It helps you assign a risk profile in a new way.”
Not surprisingly, Altfest has no plan to retire.
“I feel good. I really do. I’ve done things that are worthwhile. I’m having an impact on what’s going on,” he says. “All I wanted early on was for the phones to ring. That is certainly the case now. It’s a responsibility, but I don’t mind having it. I like helping people. At a wedding the other day, three guys thanked me. One called me a magician. He said I’d changed his life. Those are the things that are gratifying to hear.”
Sally Law
Sally Law describes her introduction to financial services as an Alice in Wonderland moment. “Like everything else in life, you tumble through the floor,” she says. “You kind of fall into the rabbit hole.”
Law had already had a string of jobs—working on Capitol Hill, doing research for a Harvard think tank and writing grant proposals for Gallaudet University—when a friend suggested that she would make a terrific financial advisor.
The friend was right.
Law, 71, now heads a firm that manages $417 million in assets for 350 households—including the first couple to sign up with her when she became an advisor in 1973. When she sat for the securities exam at George Washington University in Washington, D.C., Law was the only woman in a sea of men. Likewise, in the early 1980s she was the first woman to be appointed to the prestigious Chairman’s Council of Raymond James Financial Services. And, since she fell into that rabbit hole, Law’s firm has been listed as a top advisor by numerous industry publications.
“I think if you really like your work you never really go to work. I don’t worry. I sleep well at night. I love the fact that my clients come back year after year and they thank me. One client who just retired told me how much this firm has meant to him,” says Law. “I live for that.”
And to think it all started with a jar gripper—yes, a jar gripper. When she got her start, Law’s jar gripper was included in a Welcome Wagon package that was delivered to new homeowners in her neighborhood. It came with a tagline—“Keep a firm grip on your money”—and the offer of a free consultation. Some of her earliest clients made the call.
“I’m just fortunate somehow. I have a decent personality and I was trying to do my best. I went to people’s houses and I always talked to the wife as well as the husband. After a while, they understand that you’re not threatening, you’re trying to be helpful. You’re not trying to sell anything,” says Law. “Early on, the wives became a big part of the process. In my opinion the decision-maker is usually the wife.”
In some ways, Law is decidedly unconventional. She has never asked for a referral. “I don’t believe in it,” she says. “I think it’s low class.” Law doesn’t believe in client segmentation either. “A, B, C clients. I hate it. I have no use for it,” she adds. “If someone has trusted me and given me their money, no matter how small, I’m going to be good to them. I’ll take a kid that has $300 from a bar mitzvah. I’ll take anybody. That’s my job. We make enough money. We don’t need to be greedy.”
Law also isn’t a formal goal-setter. “I stood in front of a room once, all my staff was there, and I was asked: ‘Sally, what are your goals?’ So I answered: ‘I don’t have any.’ That didn’t go over well. But the truth is my goal is to get in, do a good job, the business continues, and it’s not too crazy.”
Law and her five-person staff work out of a two-story cottage that she calls “a living, breathing thing.” It’s not so much office as habitat for a practice that has been built from the heart.
As Linette Dobbins, president of Portland, Oregon-based McGee Wealth Management, frames it: “What comes through with Sally is she is all heart. She’s very smart. She cares deeply about people. This industry is all about numbers and investments and all that but when you meet Sally you know she really cares about you. She has walked through life with her clients. She has since day one.”
Dobbins calls Law a “Type Triple-A.” Law herself admits: “I’ve managed my life around my office.” And, if she has one overarching goal, it is to be a good steward.
“I eat my own cooking. Whatever we tell clients to do, we do ourselves. If we tell you to get an estate plan, then we better have one. If we tell you to pay down your mortgage, we need to understand that absolutely. If we’re looking at your balance sheet, we need to be looking at our own,” she says. “To me, it’s all about the balance sheet and cash flow. Investment to me is an incidental part of the financial planning process. We don’t even think about investments until we are done with the plan.”
Sometime, in the next year or so, Sally Law is going to retire. A transition plan has been in the works for the last five years and Law has been “giving things up, little by little.” Advisor Janice Henderson, who has sat in on every client meeting for the last 20 years, will take over the reins.
“It’s time for my staff to make their bone and for me to leave mine. I have a lot of younger people and it’s their time now. My job is to guide them so they understand the right perspective, which is,” Law laughs, “my perspective.” Law’s successor has decided to keep the firm name. “It does make me feel good. Law & Associates, this is what it’s known as,” says Law. “It’s a good name.”
Eugene Lerner
Gene Lerner has always been driven by a very simple question: How do you make a little? In the 1960s, while teaching finance at Northwestern University, he ran simulations on thousands of companies looking for winners that would do just that. Today, Lerner says, “I still keep the simulations going. Same goals, nothing’s changed. How do you make a little?”
At 86, Lerner is still very much a work in progress—just like the markets he watches so closely.
“Once you understand there is no rule for all seasons, the question becomes: How do you find the new rule? Change in this business comes in two ways—first from the client, secondly from the market. You must forever be flexible, recognizing the needs of the client change and, equally important is that the world changes,” he observes. “John Maynard Keynes was a pretty good economist who said: ‘The markets will remain irrational longer than you can remain solvent.’ I believe that deeply.”
Don Jacobs, dean emeritus at Northwestern University’s Kellogg Graduate School of Management, recruited Lerner nearly 50 years ago and he says only one thing about his friend has remained constant: “He thinks of nothing else but the markets. He has such a fantastic mind. He’s one of a kind. There are no two Gene Lerners walking the street, that’s for sure.”
