In August 1991, David Sack reinvented himself. At the time, Sack, a sales manager for the Shearson Lehman Bros. office at 625 Madison Ave., was enjoying the pinnacle of success. "Lehman was the greatest sales machine in the history of the industry," he says. "It has been emulated by everybody."
But success had its headaches. The company was struggling through constant mergers and acquisitions that resulted in a nonstop management shuffle. Every four months, Sack found himself working under a new corporate captain, each with his own priorities and personal style.
So, after four years of climbing the management ladder and four years before that as a rep, Sack told himself, "I have to take control of my own destiny." That summer, he informed his supervisors that he wanted to go back to production. He spent six months putting together a business plan to reach §2 million in fee income within five years.
Plan priorities included hiring a crackerjack sales assistant (Sueanne Schulman, who still works with him), computerizing his operations and finding prospects. But because he had given up his book when he went into management, Sack started from scratch.
First, he identified the ideal prospect. He was specific--"the owner of a privately held business, particularly a manufacturer, with more than one family member in the business, within a 100-mile radius of Rockefeller Center, with a minimum of §500,000 in a retirement plan."
Business owners are trained decision makers and risk takers, Sack says, "so they have the right head for the markets." And manufacturing is capital-intensive. Plus, family participation is important. "I'm a believer that it takes more than one generation to build true wealth," he explains. Proximity is essential for face-to-face meetings and the §500,000 mark is necessary to his goal.
Sack prospected from Dun & Bradstreet's ERISA Red Books containing local businesses with sizable retirement plans. "I built a drip campaign which consisted of 10 letters," he says. "They were all educational and informative, but they never showed a product or a rate of return, so there was never any hype to them."
Prospects received one letter every week for four weeks. "On week five, they would get a call from me asking for an appointment," Sack says. If unsuccessful, Sack sent another round of letters each week for four weeks and made another call. If he couldn't get an appointment within 18 months, he deleted the name from his database. "The key was making sure I got one appointment a day with a fresh face."
The plan worked. From Salomon Smith Barney's flagship office on Fifth Avenue, Sack now generates almost §4 million in fee income annually and his business is growing at 15% a year.
The personal portfolios of these business owners turned out to be similarly disorganized, Sack says."Every time they had an extra §25,000 or §50,000 in the checking account, they looked across the horizon and picked what they thought was the best investment at the time."
Because his clients' needs are so diverse, Sack says he acts as a generalist, uncovering his clients' most pressing financial needs and using those openings as the "the path of least resistance" to build long-term relationships.
Sack says the foundation of his business is simply his focus on the specific prospect defined in his business plan--something he did not do the first time around. "I spent the first years of my career as a producer building my business like a typical trainee--cold-calling, contacting 60 prospects per day, sending stuff out--just very typical and without any product focus," he says. "I was young, I was green and I was doing all the things they told me to do in training." Once he tightened his focus, he found success.
Years in Business: Almost 17
Product Mix: 70% wrap accounts, 10% equities, 10% bonds and 10% mutual funds.
Staff: One sales assistant and one "right-hand assistant" with a host of licenses.
How He Started Building Business: After leaving sales management, Sack went back into production and developed a profile of "the perfect client"--business owners with §500,000 in assets.
How He Builds Business Now: All prospects come from referrals. He meets five "fresh faces" every week.
Key Lesson Learned: "Focus on your business goals. Don't try to be all things to all people."
What Clients Want Most: "They want trusted financial advice that either keeps them financially independent or keeps them on track to becoming financially independent."
Biggest Competitive Challenge: "Differentiating myself from all the noise of discounters, the Internet, do-it-yourselfers."