Four top-producing teams and brokers share techniques for building a high-level business. All of these big hitters have a system for getting exposure and attracting clients. Read their ideas on how to pare accounts, service clients and deal with tough markets.
Firm: A.G. Edwards
Office: Carbondale, Ill.
Years in business: 21
Production: $1.2 million
Assets: $205 million
Staff: One full-time assistant, one part-time assistant
Public speaking, hosting a radio market report and teaching college investment courses paid off in Barbara Blacklock's rise to the million-dollar production level.
By Michelle Gabriel
When Barbara Blacklock became a stockbroker 21 years ago with A. G. Edwards in Carbondale, Ill., she was convinced she'd found her niche in the business world.
“Within two years, I knew this profession was going to work for me,” she says. “I like to communicate, and I like to be measured by my own energy and output. That, and the long hours, all seemed to fit perfectly for me in this business.”
Long hours were indeed a significant part of the equation for Blacklock during the first few years. “In the beginning, I did everything possible to build my book,” she says. “With money markets in the early 1980s showing a yield of 18.9% interest, I cold called. I got leads from advertising in the local papers and opened up money market accounts or whatever was needed to establish business relationships.”
To accomplish this, Blacklock worked Saturdays and evenings to accommodate schedules, made herself available as a speaker to local organizations and hosted a daily market report for a local radio station. She also taught investment courses at a local college for six years.
Her early diligence took time, but eventually paid off. In 1999, she reached the million-dollar mark in production, and it's been climbing steadily ever since. Today, Blacklock has a broad mix of 1,650 clients, production of $1.2 million and assets of $205 million. About a third of those assets are in managed accounts, a third in stocks, and the rest split between bonds, insurance and syndicate.
The majority of her business is now through referrals from CPAs and attorneys. “We've seen each other's work through our mutual clients,” Blacklock says. “The result is a level of communication where we can speak openly with each other. They know that if they ask me for information or assistance, I'm going to help them.”
For Blacklock that means being available to CPAs during the tax-crunch even though that's a busy time for her as well. “I find it pays dividends down the road because the CPA or attorney I help will remember what I did.”
To keep her name prominent in the community, Blacklock sends out quarterly newsletters to 600 households and approximately 60 financial quarterlies to CPAs, attorneys and other local business professionals.
Helping her accomplish all this is a full-time assistant, Marjorie O'Keefe, who has been with her since 1991, and a part-time assistant, Laura Mann, who has been there one year.
“We work well together complementing each other's strengths and weaknesses,” Blacklock says. “While I'm focused on the big picture and developing the business, Marjorie and Laura focus on the details and paperwork.”
The downturn in the market reinforced the importance of staying in touch with clients, many of whom have been with her for the 21 years she's been in business.
“I elevated the level and frequency of communication with my clients,” she says. “There was so much information circulating out there, via the media. My clients needed reassurance, and they needed their questions answered.”
In her conversations with clients, Blacklock draws on the principles of asset allocation and diversification to reinforce the reasons they initially did what they did, and why that plan is still valid today.
“I speak to them about realistic expectations, and remind them that we have been blessed with a strong market for a very long time,” she says.
Blacklock, who is pregnant with twins due in October, plans to continue working full time after she gives birth. To deal with the juggling act of being a new mom and broker, she plans to become more automated and communicate more by e-mail.
Even after all these years, Blacklock still likes to be measured by her own energy and output. “I have a strong work ethic,” she says. “I want my clients to feel they are getting their full money's worth of value in working with me.”
Business Building Tips:
Serving Customers: “The key is to establish trust by talking to people at a level they understand and feel comfortable with. You establish trust through credibility, communication and delivering what you say you will deliver,” Blacklock says.
Paring Accounts: Blacklock does not set minimums, but occasionally refers smaller accounts to other brokers. “I concentrate on larger clients who have more complicated needs [using] the total financial planning concept.”
Attracting Wealth: “You attract wealth through a proven track record and reputation of being a full-service broker who is trustworthy and reliable. Once you establish that, the referrals for high-net-worth individuals will follow,” she says.
Dealing With a Downturn: Increase communications with clients. “Whether a client's performance record has been good, mediocre or poor, you have to be upfront, make that call and re-emphasize their long-term goals and objectives.”
Critical Mission: “I want to bring several of my high-net-worth clients to St. Louis to meet with our private client services department [which provides expert help] as well as other leaders within the firm. This reinforces the client's sense of comfort, security and trust,” Blacklock says.
Firm: Merrill Lynch
Years in Business: Seven
Production: $3.4 million (team)
Assets: $270 million (team)
Staff: Two partners, three SAs, a marketing aide and a computer person
John Desenberg's obsession with work nearly cost him his family. Now he takes six weeks of vacation, yet his business keeps on growing.
By Michael Hayes
Don't call John Desenberg a roman candle.
This 34-year-old broker with Merrill Lynch's Greenway Plaza branch office in Houston may be burning bright and furious, but he's nowhere near burning out thanks to a life-changing experience in 1998.
That winter, Desenberg was approaching his fourth year in the business and anticipating production of about $1.9 million for the year. One problem: He was so consumed by his professional passion, building a business and gathering assets, he was teetering on the brink of losing everything for which he had worked so hard. “I was going to change my ways, or lose my wife and children,” he remembers.
So Desenberg started taking time off, weaning himself from weekends in the office. He stopped his Saturday morning business reading and got a business coach to free some time. By 2000, he was comfortable enough with himself to take six weeks of vacation with his family. In fact, the more time Desenberg takes off, the higher his production number climbs.
“You're just so much more focused when you're actually working,” he says.
His team, the Desenberg Group, posted gross production of about $3.4 million in 2000, with 300 clients and $270 million in assets under management.
How did Desenberg build his practice? One word: Exposure.
In 1995, he started tagging along with other Merrill rookies who were exhibiting at local consumer shows, at places like the Houston Astrodome and the convention center.
“The biggest account I ever opened through a trade show was $550,000, and I still have that client,” he says. “It was a great way to cut my teeth.”
Desenberg quickly moved on to seminars, with some guidance from a more senior Merrill broker in his area. “One of the most important turning points for me was the decision to do seminars,” he says. “Not just try seminars, I mean really become a seminar conductor.”
Desenberg's team spent more than $100,000 last year on the 45 retirement planning seminars they conducted in local hotels and country clubs. Desenberg picks up a good portion of that expense personally.
“I made the decision early on, as tempting as it was to run out and spend those $50,000 bonus checks, to put everything back into my business,” he says.
Developing a managed money business was another great decision. About 70% of his team's assets are in managed accounts. Most clients are between 55 and 67 years old and come to him with a rollover.
“My business is not trading stocks or putting all my clients in B shares,” he says.
All of Desenberg's accomplishments during the last six years are impressive. But none compares to the crowning achievement that came in January 2001, when Desenberg's father (who goes by the name J. Desey) — a 41-year veteran broker with Merrill in the same Houston branch office — joined his son's team.
“We had grown to a point where our team impressed him enough for him to join my group,” says the younger Desenberg. “I'm pretty proud of that.”
He had already done $2.4 million in personal production and gathered $180 million in assets when his father joined the team. He never inherited a single account, so nobody can accuse him of riding anyone's coattails, he says.
“I built this machine,” he says with conviction.
The machine now includes Desenberg, his father, broker Matt West, three sales assistants, a full-time marketing person and a computer person. And despite tough market conditions, this machine is functioning at high speed, bringing in $21 million in net new assets during the first half of 2001 alone.
“All I hear, everywhere I go from Boston to Chicago to Houston, is about how bad business is,” Desenberg says. “If you tell yourself enough that things stink, things will stink. If you tell yourself things are great, they will be great.”
Desenberg's parting advice to struggling brokers: Take your head out of the sand. And after you take your head out of the sand, take a vacation, he says.
Business Building Tips:
Serving Customers: “Not all clients are created equal; not all service should be delivered equally,” Desenberg says.
Paring Accounts: “You have to take that leap of faith and believe that releasing smaller accounts will actually increase your business, not decrease your business. But you don't know that until you do it.” he says. “People have it backward. They think their business will go down.”
Attracting Wealth: “First, you must have a process, a system to get yourself, your face, your name and your message out there. And when you're out there, you have to project extreme confidence. Believe that you are the very best and project that,” Desenberg says.
Dealing With a Downturn: “Manage expectations. Explain what could happen, [then] face up to your responsibility. Call your clients and tell them what's going on,” he says.
Critical Mission: Continue migrating assets over to professional money managers and increase the average size of new accounts from $830,000 to more than $1 million. Beyond that, leave a legacy. “I know that sounds real touchy-feely,” Desenberg says. “But I have expanded my coaching and speaking roles. … When I'm gone, I want producers to say, ‘This guy had an impact on my career.’”
Firm: Prudential Securities
Office: Albany, N.Y.
Years in business: 19
Production: $1.1 million
Assets: $103 million
Staff: Two associates, one sales assistant
Prudential Securities' Dick Miller busted the $1 million production barrier through radio and seminars.
By Rick Weinberg
After nearly a half century in the financial business, and at the age of 70, Dick Miller cracked the $1 million production plateau. So, the natural question is, “Dick, what took you so long?”
After a good, long laugh, Miller responds with typical candor: “I remember asking myself after the big '87 crash: ‘What can I do to get more assets? I can't be out gathering assets and still do a good job on transactional business. What should I do to reach more people?’”
Miller recognized the impact of radio — he'd heard a colleague on the air. He decided to do his own financial show. He bought time on a station that played big band music — tunes that “attracted the older set,” Miller says.
“Those are the types of clients you want,” he says. “Those are the people with money.”
He didn't start his financial services career with that focus. Miller launched his career in 1957 with Prudential Insurance, then became an Albany, N.Y.-based Prudential Securities broker in 1982. “I no longer believed in the insurance product, and I felt the biggest and best opportunity in growth was becoming a broker,” he says.
Fourteen years later, with the help of his one-hour Saturday morning show called “Your Money and You,” Miller finally hit the big digit — $1 million.
“My business turned around when I got on radio,” he says. “It took at least two years to get the show going. Many brokers expect instantaneous success, but it doesn't happen that way. Little by little, people began trickling into the office saying, ‘Yeah, I've been listening to you on the radio for a couple years now, and I decided to come down.’”
Miller helps defray part or all of the $2,000 monthly cost of the show through advertisements from mutual fund companies.
“The credibility of a radio show is immense,” says Miller, who also does a daily market wrap-up for the station. “People hear you, get to know you, and eventually they become comfortable. Then they come in to meet you.”
After being with Prudential for nearly a half century, you'd figure Miller would have sprinted around the office after hitting the $1 million mark. Not quite. “It was very low key,” he says with a laugh. “It was like, ‘Great, we did it. Now let's keep on working.’”
Miller has 833 households and $103 million in assets under management. He did $1.1 million in production in 2000 and is “on target” to do $1.2 million this year, says associate Gary Appleby. Louise Frances is Miller's second associate, and one sales assistant supports them.
The average age of Miller's clients is 65, “but what we've noticed the last two years is that we're attracting the next group in the demographic area — 55 and up,” Appleby says. “That's where we believe the next evolution of our client base will come from.”
Miller's business began a transformation in 1998, when he started converting to fees through Prudential's fund wrap program.
“In December 1999, we started exploring individually managed accounts,” Appleby says. “Since then, we've gone from zero dollars in that program to $7 million.” Out of the total book of $103 million in assets, about $90 million is in mutual funds, ($12.5 million under a wrap) and $7 million is individually managed. The balance is in miscellaneous assets.
For Miller and his team, the radio show is also a platform to promote seminars. This is a trick Miller learned early in his career. He does one seminar a month and does not try to attract clients with extravagant dinners or entertainment.
“It's a straightforward estate and retirement seminar,” he says. “I've found over the years that providing meals is not helpful — only an added expense. We're there to sell us and our program.”
When Miller began doing seminars, he'd attract 75 to 100 people, he says. “Then, when every Tom, Dick and Harry began doing seminars and the market became saturated, attendance dwindled, but mine stayed up there,” he says. “And I believe it's because of the radio exposure.”
Business Building Tips:
Serving Customers: “You have to hand-hold, you have to make calls and you have to do mailings, but it has to be balanced so you can keep old clients happy while bringing in new people,” Miller says. Three things are key: Staying in touch, letting them know you're thinking about them and keeping in mind the performance of their accounts.
Paring Accounts: Miller's philosophy is to maintain as many relationships as possible. He does not have an “active culling process.” He is of the school of thought that states, “Any asset you gain is an asset you didn't have.”
Attracting Wealth: “You need to spread your message, and we've found that radio and seminars are the best way for us to accomplish that,” Miller says. “About two-thirds of our client base has come from the radio.” Future clients will come from that referral base.
Dealing With a Downturn: Keep telling people to stay the course. “You have to always remind them of ‘the long-term plan,’” he says. “We're constantly saying we want to see clients twice a year to tweak their portfolios and to let them see how things are coming along. I find it very effective.”
Critical Mission: “The wave of the future is fees, which is why we've transitioned our business,” Miller says. “Our future is to continue what we've been doing — estate and retirement planning — and being fee-based.”
Firm: Merrill Lynch
Office: San Diego
Years in Business: Stirling 14 years, Folsom 24 years
Production: $3.7 million (team)
Assets: $450 million (team)
Staff: Two associates, three assistants
Teaming up turned out to be a highly successful business decision for both Linda Stirling and John Folsom.
By Rosalyn Retkwa
Linda Stirling says the best sales job she ever did was when she sold John Folsom on the concept of forming a partnership with her in 1994.
“I was a reluctant party coming into this,” says Folsom, who was Stirling's senior in business by 10 years and already a million-dollar producer.
“I loved my autonomy,” Folsom says, “but Linda convinced me that the future was in teaming up, and bringing a high level of service and expertise to high-net-worth clients.”
At the time, Stirling, a former teacher who entered the training class at Merrill in July 1987 at the age of 42, had a gross of $600,000 and six years in production. For the previous two years, she had been the producing manager of a 16-broker satellite office in Escondido, Calif.
But she decided not to continue in management because it would have meant relinquishing her book. “I loved working with clients more than managing an office,” she says.
Her stint in management taught her an important lesson: Wealthy individuals were reluctant to consolidate assets with a single broker, but were receptive to a team with a greater range of talents.
In forming the San Diego-based Folsom-Stirling Group in late 1994, the two reps agreed once they hit a collective $1.6 million, anything beyond that would be split 50/50. “It was all new business in our minds; it was a very equal feeling about what we were doing,” Stirling says.
In three years, their business doubled and now stands at around $450 million in assets, 225 households and production of $3.7 million.
The duo had to “very gently” transfer about $100 million in smaller accounts to other brokers, Folsom says. Their minimum is now $1 million.
That minimum account size is there “not because we think we're so important,” Stirling says, “but because we have such important clients, it would be a disservice if we took our eye off our existing client base. So we have to set a minimum.”
Stirling's strengths are business development and client education. Folsom focuses on asset management.
“It's important to have those differences in a team,” says Folsom. “If two individuals do the same things, it doesn't fill in the gaps.”
They decided early on not to try to be everything to everyone, Stirling says. “We decided that our niche would be the very busy entrepreneur” who wanted someone to take control. “We don't talk about being planners; we talk about being asset managers.”
While they use professional money managers, Folsom is also hands-on. “We're very much in the trench. We do not take this casually, and prospective clients instantly sense that,” Folsom says.
“You have to have an opinion, which is what so many people lack,” Stirling adds. “We are willing to put our necks on the line. Clients will forgive you for being wrong, but you have to have a focus, a vision, on how to manage in this difficult time.”
Their team includes three sales assistants and two registered investment associates (one is a CFP, the other focuses on fixed-income). The senior SA, Ginna Olsen, calls five clients every day to see how they're doing and whether they need to talk to the brokers.
“The interesting aspect is that the client may have spoken to me or John a few days earlier, but when Ginna calls, they feel more comfortable venting a bit,” Stirling says. “It's like she's a neutral person.”
Clients can call into a market update conference call every two weeks, using an 800 number. The calls are accessible via an archive, until the next call takes place. (The service is from Premiere Conferencing, Kansas City, Mo.)
Stirling also coaches trainees. One of her basic tenets is that “every office has its naysayers — what the company isn't doing right; what the market isn't doing right. But this is a business about positives. If you don't get one client, there's another one right around the corner,” she says.
Especially in tough times like we've seen lately, a positive attitude is a necessary element in attracting clients, Stirling says.
Business Building Tips:
Serving Customers: Have a sales assistant make service calls. Clients see SAs as neutral third parties, to whom they may reveal more.
Paring Accounts: Folsom and Stirling send letters to clients with smaller accounts stating that to give the best service to every one of their clients, they need to match the client to someone who can spend more time with them. The letter gives the name of the new broker and his/her assistant, and notes the broker will call. They share the account for a year, positioning the new rep as an additional service provider. After that, the account fully transfers.
Attracting Wealth: Set a high account minimum. People want to be part of an exclusive group, Stirling and Folsom say, and will work to meet or beat the quota. And a high bar helps brokers achieve more. “You have a different sense of accomplishment and approach than someone who is just shot-gunning it,” Stirling says.
Dealing With a Downturn: Keep 5% to 10% of every portfolio in a hedge fund, and also have some bonds and cash. Each day their team evaluates every household to make sure no one has exceeded risk tolerance levels.
Critical Mission: “To constantly raise the bar [minimum account size] and focus on that exceptional client,” Stirling says.