Firm: Merrill Lynch
Location: Century City, Calif.
Years in the biz: 19
Years with firm: 11
Business specialty: Asset allocation, values-based financial planning, and portfolio construction for ultra-HNW clients.
Eric Gray is a second-career financial advisor, but getting a late start in the business didn't slow him down any. He now manages $3.3 billion in assets for very wealthy entrepreneurs in Merrill Lynch's private client group, making him one of the firm's biggest advisors. First, he pursued music: After attending New England Conservatory, he worked at a tech firm launched by Dartmouth professors in the early 1980s that sold some of the first synthesizers and other digital audio workstations to musicians and film producers like Michael Jackson, Sting and George Lucas.
“I thought that if I could explain these complicated music production systems to musicians, I could explain the complexities of the financial markets to investors,” he says. Turns out he was right.
In the early 1990s, he got an MBA from UCLA, and joined the private client training program at Goldman Sachs, where a friend from New England Conservatory already worked. Pretty soon Gray had his first client, an entrepreneur who was selling his company: “I had made it my business to understand single stock issues — it's a fairly technical subject, so a lot of people don't come up the curve on it,” says Gray about how he won the client's interest. “The other thing was good personality fit.”
Eight years later, Gray moved to Merrill. Today, the majority of his clients are entrepreneurs with $25 million to $100 million to invest. He and his team primarily use managed accounts, but also occasionally create specialized portfolios around an isolated investing theme. A recent theme: Titans of Technology, which focuses on tech companies that are dominant in their field, trade at low multiples historically, and have great balance sheets and huge cash positions.
The business was easier to break into when he started, he says. He had a great mentor in his first manager at Goldman, Darell Krasnoff, and he says having a mentor is even more crucial today. “If you're starting out, you definitely need to have more experienced people helping you, and even more so today because it's more complicated. You can't be a specialist in global bonds or emerging markets and all the different investment strategies we employ today. So the learning curve to understand that private client business is a minimum of three years, probably more like five.”
Gray says success in the business requires intellectual horsepower, investing acumen and empathy for clients. And yet, the biggest secret to his success has been to focus on client profitability first: Happy clients bring you more assets and refer you to their friends. “Personal success will follow client success,” he says.