Jane Beule does things differently.
One example: Although Beule’s a Fulbright Fellow who studied in Germany, has a master’s from Stanford and an MBA from Harvard, more often than not she’s the one who conducts a one-hour complimentary meeting with prospects for the Redwood City, Calif.-based RIA firm she founded in 2001. The reasons are principled and pragmatic.
“It’s a blessing to talk to people; it’s part of the work we do,” says the president of Griffin Black, but because she “can’t spend $100,000” to order up market research, “even if they’re not the right clients for us, I get wonderful insights” from those prospects.
Second, Beule began her career as a financial analyst on Wall Street for JP Morgan, but after spending 20 years in Silicon Valley as part of the IPO machine, she realized that while investors need to make a return, “it’s not as important as the people.” Therefore, the three top priorities at her firm are: clients, the people she works with in the firm, and capital, or building an enduring business that she could “love working in every day.”
Third, Beule’s work in Silicon Valley helps her see how and why “tech is a big boon” to the personal financial advice industry in general, to clients in particular and to the advisory firm itself. Tech reduces the busy work at the firm, provides direct client benefits and helps the firm’s advisors better perform their analytical and service delivery tasks, she says.
From the beginning, Beule deviated from standard advisory firm practices, like sending quarterly reports to clients. “I’ve never seen a client who reads those reports,” she says, and her compliance attorney advised her that if sending those reports wasn’t included in her form ADV, she didn’t have to do it. So she didn’t, and it never was. Those hefty reports just weren’t a benefit to clients.
Another difference: “We’ve always been planning centric,” she says, and in the beginning, she did what everybody else did for clients — created big financial plans — but then “nothing would happen.” That practice flowed out of the genesis of “financial planning,” which was to help people plan for retirement by analyzing cash flow and the client’s investment holdings.
The planner would recommend that instead of the client’s current holdings, “some non-crappy mutual funds.” That approach may work for clients who are 60 or 65, she argues, and it also worked for the “planner” whose true goal was to sell those new mutual funds. That approach doesn’t work at Griffin Black, where half of the clients are under 45 and not wealthy.
Instead, all of the firm’s clients, she says, want to do a better job with making the most of the money in their lives now, she says. Her clients are involved in the planning relationship, which can take six to nine months to get started. Why so long? One reason is that most clients don’t know what their goals are. They enter the relationship because of some trigger — “it hurts some place”— but while the process will address that present issue, that’s often not the same as formulating long-term goals and building a strategy to achieve them.
Griffin Black’s fee schedule reflects its planning-centrism. The firm doesn’t have an investment minimum, and those younger clients pay a $745/quarter or $3,000/annum fee, which means, says Beule, that the firm is less expensive than hourly financial planners. As those younger, less wealthy clients build up assets, their fees are increased.
That’s an interesting solution to the industry’s overall pricing problem, which Beule compares to the medical industry’s. “As you get older, you need more services,” she says, but for younger people, she wants fees to be as low as possible so Griffin Black can “reach more clients.”
Whether younger or older, for Beule and her team, client financial planning is a “process, not a product.”
James J. Green, a former editor of this magazine, is editor of Jamie Green Reports, an advisor-focused writing, editing and shepherding service. He can be reached at email@example.com.