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Profile in Growth: Bogart Wealth

A plan, a little forethought and a lot of free education have helped James Bogart build an RIA with an organic growth rate 10 times the industry average.

At the beginning of his career in the first years of the century, James Bogart decided he needed to find himself a niche. He was working as an investment executive at Ferris, Baker Watts in his early 20s and thought it would be a good plan to focus on an area where he “couldn’t mess it up too badly.”

So, he began targeting pensioned ExxonMobil employees.

Twenty years later, McLean, Va.-based Bogart Wealth is fielding between 25 and 75 new leads a day and boasts an organic growth rate of 39.7%, nearly 10 times the industry at large.

The logic in those early years was to find employees with 401(k)s and pension plans, said Bogart, “because even if they don’t do a very good job saving, they still have the pension and it’s going to be a good prospect.”

He started with the newly merged ExxonMobil corporation, learning all the intricacies of the company’s plan offerings, but it wasn’t until around the time Ferris was acquired by the Royal Canadian Bank in 2008 that he began putting his expertise to work attracting clients with a series of informative “rubber chicken lunches.” Initially designed to be a general overview on retirement planning basics, Bogart said he found prospects wanted more detail and began tailoring the events to their specific questions and concerns.

Around the same time, Exxon was relocating employees to Houston and Bogart started holding events in two markets. Courting prospects in Texas cost nearly four times as much, he said, “because they wanted dinner,” but business was so good he bought a house there in 2013, opened a second office and hired his first advisor.

Bogart left RBC the following year and launched The Bogart Group at Morgan Stanley, bringing his Exxon clients with him. Shortly after, he opened a third office in The Woodlands, Texas, following Exxon employees re-relocated to the nearby city of Spring. In 2016, he broke ranks with Morgan Stanley and launched Bogart Wealth on the Schwab Advisor Services platform with a little more than $526 million in managed assets.

By this time, firm had already begun courting employees of other Fortune 500 companies, all of which make their retirement plans public, landing clients from Shell, Lockheed Martin, Northrop Grumman and SAS, among others. The live events often drew as many as 80 prospects and roughly 16 of those would ultimately become new clients, Bogart said, estimating that he was spending between $300 and $400 per client acquisition.  

“It was pretty capital intensive, but I was OK making the investment because we were seeing the return,” he said. “Then the pandemic happened.”

When COVID-19 lockdowns relegated social interactions to the internet, Bogart decided it was time to move his growing archive of educational content to the web and learned how to Zoom.

On March 23, 2020, eight days after the first lockdowns were announced in the U.S., Bogart Wealth held its first Zoominar, entitled: Can I Still Afford to Retire? That event garnered 370 live attendees and the recorded version quickly received another 750 views.

Bogart followed up with more content and soon found the videos were being shared well beyond his previous spheres of influence and reaching new international markets in places like Singapore, where Exxon has about 3,500 employees. Acquisition costs dropped to around $20 per client and the same percentage of prospects was converting—around 200 for every 1,120 viewers.

“We did have a very captive audience at that particular point in time, but it was also very valuable, substantive, time-driven content,” he said, adding that his firm works hard to acquire a deeper understanding of corporate plans than its own in-house consultants generally offer.

So, when the health crisis hit global job markets in late 2020 (Exxon announced it would lay off up to 14,000 employees in October), employees who were suddenly collecting pensions or worried about their retirement plans knew exactly who to call.

“It wasn’t an overnight thing by any means,” said Bogart. “This was 15 years of building this out. But we were able to leverage 1,200 existing households at the firm and take it to another level where 30,000 prospects of the firm are willing to tell their friends.”

What it fundamentally comes down to is value creation, he added, and “actionable steps are the secret sauce.”

To demonstrate value in a new market, Bogart advisors identify the various ways his firm can optimize a target employer’s existing programs, such as whether their 401(k) allows for something called a “mega-backdoor Roth,” a little-known strategy suited to executives earning too much to be eligible for regular Roth IRA contributions.

Many topics are easily applied across all or most corporate retirement plans, he noted, pointing out that a webinar on net unrealized appreciation is YouTube’s most-viewed video on the subject and has opened the door to other Fortune 500 companies. To complement the courses, Bogart Wealth has also built several digital tools that demonstrate the utility of financial strategies commonly applicable to target clients.

Once content has gotten prospective clients in the proverbial door, the firm offers complimentary consultation and retirement planning to anyone interested. Bogart knows that’s a big ask of a 31-person team with nine financial advisors but said more than 80% of prospects who accept end up becoming clients—and the fact that it's free means more will accept and, more importantly, will feel comfortable telling their friends.

Staff has more than doubled over the past two years, up from 12 people in 2020, and Bogart hopes to fill 26 positions in 2023. Aware that the industry faces a shortage of talent and in need of advisors who can take on a full load of new clients, he’s betting on fresh faces. The firm has implemented an in-house career acceleration program and is actively recruiting advisors out of school who don’t come preloaded with large books of business—or bad habits.

Ideally, said Bogart, each client will have three assigned advisors in tiered roles and two primary points of contact. To that end, he’s willing to consider any qualified applicants—provided they have the right mindset.

“We’re a very aggressive, growth-oriented firm,” Bogart said. “And, because of that, there are certain personality types that don’t align with what we do. I mean it. Period. The end.”

For now, that growth is exclusively organic. Bogart said it’s been so prolific that he hasn’t had room to consider doing any mergers or acquisitions. He would consider opportunities that add key talent, "if it was a one plus one equals six kind of opportunity," but his business development plan for the next 10 years is primarily predicated on maintaining a pipeline equal to managed assets. He's currently behind target at around $1.6 billion, due to the firm's rapid growth and difficulties hiring.

“If I’m at $2.4 billion, I want $2.4 billion or more in our pipeline,” he said, explaining that he keeps track of all his clients’ current and future assets, including when they will become manageable, as well as all assets owned by targets at various stages in the acquisition funnel.

“We’ve done the work for all these people; we have the data. I know where they have money and when the assets are set to come in,” Bogart explained. “Everyone is categorized based on certainty and probability of when, so we know how to apply resources within the firm, whether it be follow-up initiatives, targeted educational pieces, things like that.”

In a dynamic industry experiencing a talent drought and, according to Bogart, a related efficiency crisis, he said the most important thing for other firms seeking growth is to have a clear plan.

“It amazes me how few businesses actually have business plans,” he said. “We preach to our clients about having a financial plan but don’t set goals for ourselves.”

“You have to have a plan,” he said. “You need to drill into those goals, and you need to hold yourself accountable. I have three different coaches at any point in time in my life because I want the accountability and it keeps me on track.”

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