Matt West thought he had it made when he became a Houston financial advisor three years ago. He quickly landed in Merrill Lynch's top quintile — and stayed there. He built up a book of $40 million and generated $500,000 in annual production thanks to the inflated market, his aggressive marketing strategy and energetic personality. His goal was to become a $1 million producer in five years. Then came September 11, the steep fall in equity prices and the sharp rise in investor cynicism.
The bear market was terra incognita for West, who was a mortgage broker before becoming a rep. He had to figure out ways to keep assets rolling in when experienced reps couldn't even get their clients on the phone. The 32-year-old rep started cold calling again. Only this time, he was cold calling small businesses to try and snag employee benefits packages.
He convinced one of Houston's biggest communications firms, which was laying off 10,000 employees, to let him provide free seminars about 401(k) and IRA rollover plans and severance package options for exiting employees. The seminars led to business — a quick $10 million in new assets. And West says he will conduct 30 to 40 seminars for the company this year, up from 15 last year, and he expects that to translate into even more new business.
West has another prospecting tool that he says gets results. He runs lunches at Tony's, a popular Houston restaurant, preceded by a half hour of financial advice and a half-hour discussion on a more entertaining subject: food, wine, gardening and sports, for example.
He invites between 12 to 16 existing clients, who are encouraged to bring family members or friends. Costs vary. Sometimes wine companies contribute to meals; other times, a fund company may help subsidize the costs.
“What I'm doing is marrying finances with needs, and creating an environment where clients can learn about different issues at one time,” he says. “These are the types of things you have to do to separate yourself from others and generate more interest.”
Sometimes Tony's chef, Bruce McMillan, talks to the group while preparing the food they'll be eating, or an oenophile discusses wines. A golf pro has addressed the forums and at a future event, West plans to feature former New York Giants running back Rodney Hampton, whom he met while helping at a football camp for underprivileged kids.
West is also lavishing more attention on current clients.
“A client got a master gardener's certificate, so I went out and got him a Better Homes and Gardens book,” West says. “Another client got promoted, so I sent him a book on leadership. Another client's child got accepted to Vanderbilt University, so I sent them a school cap.
“These bad times forced me to realize how I should have been handling things all along during the good times,” says West. “My first year, I was simply gathering assets. Now, I'm running a book of business — and this is going to be the way I run my business from now on.”
So what's West recommending? “I'm telling clients about a strategic allocation fund that's like a hedge fund, which you can unwind and get out of. No stocks, no bonds,” he says. “It's got a little hair and some warts on it, but it's making money.”
West's promotional strategy doesn't come cheap. West says he spent more than $10,000 on client gifts and lunch workshops this year, but adds that the investment has more than paid for itself. The seminars resulted in 12 to 15 referrals. “I've had more referrals in the last six months than I've ever had before,” he says.
Oh, and now he expects to be a $1 million producer by 2006.