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The Envelopes, Please

The Envelopes, Please

The 2004 Registered Rep. Outstanding Broker Awards

Sponsored By Pioneer Investments

Michael Hull: Charitably Inclined

As a financial consultant devoted to keeping the programs of charitable institutions fully funded, Michael Hull's clients might very well consider him an angel.

Hull's consulting work directly affects the continuing operations of programs in mission work, health care, education and others. Lending a hand is a family tradition — his father Grafton is a living legend in the development of several national social work initiatives.

Building houses and landscaping as a volunteer for one of his father's projects in hometown White River, Wis., got Hull hooked on charitable organizations. It was also where Hull learned to appreciate building things from the ground up. Now he helps his clients create their yearly operating budgets by developing mission statements, building portfolios and selecting asset managers.

“We were concerned about our whole situation,” says satisfied client Paula John, the director of the supporting fund for the Archdiocese of Milwaukee. “Michael did an incredible review of everything. I'm always amazed at his wisdom — and he's only 36!” She says her understanding of investments is much clearer after knowing Michael. Hull may be young, but in his nine years of financial planning, he's learned what's most important to his business — building relationships.

One key to success: Hull clearly communicates his work to his clients, making sure they understand his decisions. Maureen O'Toole, the director of Citigroup Alternative Investments, says Michael's knowledge of alternative investments is particularly strong. “He has done a great job explaining to clients the reasons for diversification [in the alternative asset class],” says O'Toole.

Hull only uses third-party managers — and not Citigroup or Smith Barney managers, a choice he said is no reflection on his firm (and a decision which Smith Barney has never challenged). And long before Spitzer began ranting about fees and costs, says John, “Michael was tailoring all of our investments to decrease expenses.” With these kinds of client relationships and more than $260 million in assets under management, he's not worried about his own money — just his clients'.

John Churchill

Mary Ellen Garrett: A Mother of an Advisor

Baby cookies forced Mary Ellen Garrett to become a financial advisor. The Merrill Lynch vet, who traveled frequently as an internal wholesaler, saw the writing on the wall 13 years ago, when all three of her children were younger than two. Her husband, who owns an advertising agency, arrived at a pitch late and asked an attendee giving him quizzical looks, “What are you staring at?”

“‘You have a cookie stuck to the back of your jacket’,” the man responded.

“That day, my husband said, ‘We have to do something different’,” Garrett recalls. “I went into my managers' office the next day and said, ‘Can I have a booth?’ And I started as an advisor right then.”

After spending the first few days in a panic — having no clients will do that to a person — Garrett said she “put her head down” and started to lean on personal contacts in her home community of Atlanta.

Eschewing cold-calling, she sent announcements to just about everyone she knew, announcing that she was a financial advisor — and she wouldn't be traveling anymore. It's been 13 years, and Garrett now works with a team of five women in a $300 million business, while still finding time to chair the Women's Legacy of the United Way of Greater Atlanta. She chairs events and fundraisers for women's shelters, child-care and various other endeavors.

Garrett's experience in philanthropy has enhanced her ability as a mentor for the client associates she's worked with for many years. Leslie Haefeli, who has worked for Garrett as an assistant for 18 years, says she's helped her professional growth, to the point where Haefeli is now the chief troubleshooter for client problems. “She's helped me learn to take over a lot of daily business,” Haefeli says.

David A. Gaffen

Bob Burke: Keeping It Simple

Bob Burke freely admits that three-quarters of his job is preventing his clients from doing, well, something really silly. Burke, who manages more than $400 million for Morgan Stanley's Walnut Creek, Calif., office, recognizes the capital markets as a treacherous graveyard for the arrogant.

“It's the classic salesman's goal of ‘win-win’,” Burke says. “I get to grow my business and still have time to live my life.”

Like many successful advisors, Burke, who started with Dean Witter in 1977, focuses on a particular niche — in his case, retirees from the Chevron Products Co., based in nearby San Ramon. Of his 900 clients, 600 are either former or current Chevron employees. (He built the Chevron franchise, not from some official Chevron blessing, but because he won a few employees' accounts and word spread.)

His business is three-quarters fee-based, and he is militantly against stock-picking. “It is rare to find a broker who can outperform a good money manager in the long run,” he says. “I have never had a call saying ‘my mutual fund is up 25 percent, let's sell.’ I have moderate investors, and being conservative works.”

Despite the size of his practice, Burke — who has no team members and only two sales assistants — has found the time to indulge in his charity and family work. He holds a yearly Morgan Stanley golf tournament to benefit the Cystic Fibrosis Foundation and gleefully attended the Oakland A's home opener with his son, whom he also coaches in Little League.

“If I'm out there actively trading stocks, I don't have time to coach my kid's basketball and baseball teams and do my charity work,” Burke says. “You have to remain involved, and keep your perspective. There are things out there that are bigger than you.”

Will Leitch

Bob Fragasso: Walking the Walk

When the firm Bob Fragasso was working for was bought by another in 1995, he felt the new, combined entity was not good for him or his clients, so he did what many brokers only talk about — he left.

Now in charge of his own firm, the Fragasso Group, affiliated with Linsco/Private Ledger, Fragasso refers to himself as “chief cultural officer”; that is, he gets to call the shots as he feels best serves the interest of his clients, himself and his employees — no matter how unconventional. For example, Fragasso pays his employees with salaries instead of commissions (to quell internal competition) and holds weekly roundtable discussions among the group around a stack of pepperoni pizzas.

Fragasso doesn't stray from his long-term ideology, even if it means losing big money. “I had clients in the late 90s complaining that they were getting only 29 percent when their friends were getting 60 percent somewhere else.” Needless to say, they soon understood why many of their friends lost their shirts — imprudent asset allocation.

“We don't take hot-dot seekers. My clients get a businesslike approach with businesslike returns,” says Fragasso. By businesslike he doesn't mean minuscule returns, as one happy customer relates. “Bob and his group helped me diversify my whole portfolio — my children graduated from college debt-free and I'm going to retire when and how I want,” says Bob King, a client for 20 years.

Fragasso clients understand that prudence beats sex appeal in the long run, because he teaches clients to understand market history and the simple, but oft overlooked, concept of mean reversion.

Fragasso migrated his book to a discretionary, fee-based operation three years ago. And the proof of his talent is in the results. Nondiscretionary accounts heavily underperformed the discretionary ones. His client's know what kind of service they're getting and it shows — Fragasso and his team have a 99 percent client retention rate through bull and bear markets.

John Churchill

Bob Harris: Answering the Wakeup Call

Bob Harris never intended to go into the financial advisory business.

When his second son was born, Harris — then a math teacher and high school football and baseball coach — realized he could not provide for his family and still sock away money for retirement.

“I was holding down three or four jobs at a time [in the summer],” Harris recalls. “I was striping parking lots, tutoring and working in a men's clothing store.” During basketball season, Harris would make perhaps $20 a night reffing games.

Then one day Harris had a realization that put his financial circumstance in stark reality: His kids qualified for Virginia's free lunch program.

Soon thereafter, he noticed an ad from a financial services firm in the paper. He applied, got a Series 6 and set to work building a practice. After just a year or two, in March 1985 and with less than $1 million under management, Harris remortgaged his house and struck out on his own.

Today, Harris' practice revolves around retiring phone company employees, whose nest eggs typically sit in the $300,000 to $500,000 range. He's helped approximately 2,500 Communications Workers of America retire since 1992 — clients gained by referrals.

“For most of these people, this is the first major financial decision they've ever made,” says Jack Dotson, a Harris client and a retired regional director for the Communications Workers of America. “You've got to trust somebody to turn over something you've been saving your whole life.”

David Geracioti

Kevin Queally: Steady Hand

Merrill Lynch rep Kevin Queally wants to make “raving fans” out of his clients, but he landed at least one by annoying him first.

The client, Jim Patrick, worked as a wholesaler in the Northeast area several years ago, and found his sales calls to Queally arduous ordeals.

“He wasn't swayed easily — he wanted to hear an investment thesis, and wanted it to bear out,” Patrick says. “I was impressed, because he wasn't easily sold — and he was a real client advocate.”

Patrick decided the only thing for him to do was become one of Queally's clients himself. No longer wholesaling, he's been a Queally client for six years now, one of about 125 families Queally serves from his Merrill office in Wellesley Hills, Mass. Viewing his clients as families is important for him, in part because children are so much of his focus in Queally's spare time.

He has four kids himself and works with the New England chapter of Garth Brooks' Teammates for Kids Foundation, as well as with the Families First Parenting Program. “Merrill was one of the founding co-sponsors for Teammates for Kids,” Queally says. “They truly help underprivileged children; it fit what I was looking for in a charity.” Queally and his wife have raised more than $200,000 for those two charities in the last year.

In the office, Queally and his six-person team get a wide variety of opinions to improve the $300 million practice, working with a couple of client advisory boards and consulting groups to grow the business.

“You need an outside influence to educate you on what's changing,” he says. “You're reinventing yourself every day in this business.”

David A. Gaffen

Dick Gottfred & Co.: Teamwork, Teamwork, That's What Counts

Dick Gottfred's best investment in the last five years has been the three other members of his team. With a combined 59 years of industry experience, each member has earned an important role in picking and managing the team's winning portfolios. But — and let this be a lesson to those thinking of partnering with others — team cohesion didn't happen overnight. Although it may sound trite, Gottfred says that to build a successful team communication skills are of utmost importance — that and a keen understanding of personality differences. Carlette McMullan, the current manager, attests to the strength of their bond. She describes the individuals in the group as “real stars at the firm.”

David Pardun, a client for two years, “can't say enough” about the team's talent. Pardun says he left his prior broker because he made Pardun feel unimportant — like second-class. Communication? Pardun says he never heard about his portfolio unless he called his broker first. “I came to Blair because of the firm's reputation, and Dick's team immediately made me feel like a priority,” Pardun says. Another plus: The Gottfred team clearly explained their individual roles, what to expect with fees, costs and the money management process, says Pardun.

“He's a customer's man, for sure. His heart is in the business,” says McMullan of Gottfred. However, client relationships with the team have varying reasons for existing, and Gottfred is quick to heap praise on the other members. After all, while each member has his specialty, many of the duties are spread around, such as client relationship maintenance and investment research.

“Dick's team is in at 7 a.m. — they never miss a 7:30 [a.m.] research call,” says McMullan. That's because while Gottfred's team, growth-at-a-reasonable-price devotes, does trust Blair & Co.'s 30 or so analysts — ultimately, buy and sell decisions rest with the team. Thus, the team does its own number crunching as well.

Of course, no stock-picker is perfect. Harry Gains, a veteran client, says he trusts them because they inform him when things don't go as planned or when a losing stock has to be dumped. “The hardest thing to get from a broker is trust. They've got most of my money and all of my trust,” says Gains.

John Churchill

Raymond J.Lucia: Radio Friendly

Since the early 1990s, radio broadcasting has played an important role in Ray Lucia's financial practice, but nothing has been more central to his professional success than self-confidence.

Lucia, who grew up a “poor Italian kid in south Philly” before migrating west for college, was drawn to the brokerage industry by the prospect of “getting paid exactly what you're worth. I liked that because I figured I was worth quite a bit.”

He obtained a CFP designation in the early 1980s, and began working as a financial planner. Ten years later, the entertainment itch that remained dormant since his days as a rock guitarist in the 1970s acted up again. He scratched it with a financial radio program on KFMB in San Diego. Now The Ray Lucia Show is syndicated nationally, broadcasting in over 60 markets.

Lucia's “brain trust” sidekicks on the show are “unstumpable,” he says, when it comes to financial quandaries, and the confidence that breeds in his audience has helped the firm attract a nationwide client base. The firm now has 11 offices nationwide.

The show draws upon the conservative investment philosophy put forth in Lucia's Buckets of Money book and monthly newsletters. His focus lies in “bullet-proofing” client portfolios — that is, placing capital preservation as the top investment priority.

“You don't want to be the richest guy in the cemetery,” goes one Lucia mantra, and with the memory of the bear market still fresh, it's not surprising that many retiring clients — 3,000 and counting, he says — are eager to embrace his close-to-the vest style.

Matt Barthel

Paul Sheldon: Ladies Man

Paul Sheldon does well with women.

Early in his career, while at the Wachovia predecessor Bache & Co., a struggling Sheldon was handed an opportunity to teach a class on investing specifically geared to the fairer sex. The engagement netted him checks worth over $1 million combined from three attendees. More importantly, it handed him the niche that would come to define his successful practice. Now, over three-quarters of Sheldon's 500 clients are female, and his lectures and seminars to women's groups form the foundation of his prospecting efforts.

His investment philosophy — applicable even to “prideful and spiteful” male investors — is straightforward: Protect your capital.

“It's the most important thing in investing, but it's easily and frequently forgotten,” Sheldon says. “I'm not afraid of going to cash when the situation demands it — and sometimes the situation does demand it.”

Perhaps the most interesting aspect of Sheldon's practice, though, is its focus on transactional business in an era in which fee-based business is all the rage. He estimates that 80 percent of his business is transactional, and the decision to skew his practice in this direction is a conscious one that affords him more control over client portfolios.

“Fee-based business is appropriate for some people, but it's not a cure-all,” Sheldon says.

Matt Barthel

Sheryl Stephens: Climbing the Ladder

File Sheryl Stephens under “Accidental Broker.”

As a student at the University of Michigan in 1976, Stephens took a receptionist job at Winton & Associates (a Raymond James affiliate). She was studying to be a teacher at the time and had no experience — or interest — in the financial industry.

“Fortunately, I started attending client meetings and realized that this was something I had a passion for,” Stephens says. “Under Mr. Winton [the firm's founder], I was able to learn the business the right way.”

Seventeen years after first joining the firm, Stephens had climbed the corporate ladder to the top — the presidency.

Since Stephens took over (Winton died in 1994), the firm has more than tripled its assets under management, thanks to a strict focus on fee-based accounts for high-net-worth clients. Stephens has been named to Raymond James' Chairman's Council as one of its top 10 producers nationwide.

“Most of our clients have known us, and me, for more than 30 years,” Stephens says. “Our business, being fee-based, doesn't really work unless you have long-term relationships with your clients.”

Under Stephens' direction, the firm — which has seven employees — has amassed nearly 400 clients.

“We're taking care of retirement plans, and trustees of pension plans, we make sure everyone is looking at the big picture,” Stephens says. “In the bull market, people didn't want to buy bonds. But now our clients are glad they did.”

Will Leitch

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