1. Building a Team-based Enterprise
Stuart: Good afternoon, and thank you all for attending.
ACR#88571

2. Opportunity People Growth
Enterprise Momentum
Opportunity
People
Growth

3. Growing Into An Ensemble
When is the right time to hire an advisor?
Structuring client service towards a team based model
Choosing the right professional
Technicians
Service advisors
Lead advisors
Business partners
Do they have to bring clients and revenues?
Can they have equity?

4. Panelist Introduction
David Berman, CFP, CLU Principal Berman McAleer
Bernard Wolfe, CFP Chairman and CEO Bernard R. Wolfe & Associates, Inc

5. Firm Overview’s
Berman McAleer
$500 million in individual client assets under management - core business
$350 million in 401k assets
17 employees, 6 advisors, 3 owners(1 more buying in beginning of 2013)
Bernard R. Wolfe & Associates, Inc
$500 million under management
7 employees, 3 advisors, 2 partners (1 more on track)

6. History and Major Milestones Partnerships Growing Professionals
Agenda
History and Major Milestones
Partnerships
Growing Professionals

7. 1. History & Major Milestones

8. History - BM Were friends and roommates with Joe McAleer
Often talked about being partners
Careers diverged for 10 years before the time was right to merge and form Berman McAleer, Inc
Rejected the “date before you get married” model and took the leap of faith
From the beginning set it up as 50/50
Real business expenses
Same salary for both
David brought all the physical space and equipment
From that moment on, everything was equal
NO tracking of individual sales
Put the firm name on everything

9. The Business Model - BM “Painfully expensive business model”
Multiple professionals involved
Many, many hours devoted to each client
Can only work with very high wallet-share and high minimum account
Can only bring in 8-10 new clients each year as a firm – cannot accept more due to the model
The model is extremely rewarding to the owners when the firm is growing and productive due to leverage and capacity
Vulnerable to “bad times”
Got through the crisis without reducing staff salaries or laying people off
Owners experienced drastic decline in income

10. Dual Advisor Model - BM
Early on were frustrated with the capacity limitation of doing everything
Original idea was to have a lead advisor and support advisor
Joe and David were the lead advisors
The model created capacity and leverage but still over-emphasized the lead advisor. Still dependent on Joe and David
Patrick, Drew and Melanie were called “relationship managers”
The dual advisor model involves two advisors in every relationship
Patrick, Drew and Melanie started being called “Advisors”
Emphasized the role of the second person
Defined specific responsibilities
Relationships will vary by client
Keep reinforcing the team
Ask clients to send s to both of the advisors

11. Professional hockey player
History - BWA
Professional hockey player
Needed plan for after hockey career
Opened firm in 1981
Acquired by NFP in 2001
Security for family
Recognition of value after 20 years
Made Brad a Principal
Switched from commission-based to fee-based in 2005

12. 2. Partnerships

13. Firm Criteria Individual Criteria Buy-in
Who Should Be A Partner
Firm Criteria
Are we ready to have another partner?
Will income be diluted?
Will control change?
What other partnership events are pending?
Individual Criteria
Contribution
Character
Management skills
Buy-in
Valuation
Funding
Compensation changes

14. Structure of the Partnership - BM
We spent considerable time and money on a detailed partnership agreement that has never been referred to since
Belief and faith have a big role in a partnership
We have had routine disagreements but never to the point where we were not sure if we will continue to be partners
We changed roles in how view spending
Every time we try to make a decision we look at honoring the three values of the firm which apply to all constituents of the firm – clients, owners and staff:
Trust
Respect
Fulfillment

15. Structure of the Partnership - BWA
Always responsive to business needs – truly have “owner” mentality
Brad and Bernie set employee bonuses together based on employee’s contribution
No formal business plan – Bernie and Brad drive revenue
Goal is to make Samantha a Principal

16. 3. Growing Professionals

17. Large Firms Make People a Priority
Source: 2012 AdvisorOne Top WealthManager Survey

18. The People - BM Highly qualified and credentialed people
Hired Patrick from Merrill Lynch with no business development expectations
Now co-manages $220 million of client relationships
Looks for people who can’t or don’t want to reach critical mass building their own book or already have experience managing relationships
The team model makes it practically impossible to leave the firm and takes clients with you
“Our approach seemed like the logical thing to do. We always wanted to be the professional’s professional”
We wanted to model ourselves after the best law, accounting and trust firms

19. Professional Development - BM
Very individualized professional careers
With Drew it was purely a matter of time for him to get some experience
Our model is not inherently scalable
Process and systemization not always realistic in this model

20. The People - BWA
“Team Culture” – share in the good times and the bad. “Take care of our people”
Low turnover – high level Operations and Compliance staff member since 1988
Company pays 100% of health care, parking and other perks
Hire people with potential, not for instant gratification
Entire team on salary supplemented with bonuses
Associates starting to become vital piece of future
Every employee, including staff, has same opportunity to advance

21. Professional Development - BWA
Looks for “personality”, can teach everything else
Up to individual – Brad developed and gained respect on his own
Be patient, no business development expectations. Took 8-10 years for Brad

22. Thank you!